Various altering demands, value preposition, economic uplift and competition surge could not be survived by this collaboration for a longer time as it wanted to be more responsive in capitalisation and seeking opportunities than expected.
Having faced such practical organisational challenges the Alcatel-Lucent merger had a great downfall.
Concerns even before the merger
Back in the year 2001 only the negotiations among these merged units had not ascertained on a positive note because of the susceptible non observance in management of these two organisations which aimed with the takeover of lucent by Alcatel. Though Alcatel-Lucent as the leader of global level and had also worked to generate revenues of about 16 billion euro with its efficient operational activities in almost 130 countries.
Lucent’s merger with France’s Alcatel is a case in point.
The entirely different ways to carry the business with varied perspectives was certainly the biggest insight over which the merger could not work at all. Alcatel was a French maker of telecom equipment’s and when this giant decided to merge with lucent the reaction were both unexpected and had a sense of scepticism on to it respective aim with defined merger and acquisition.
In 2006 Alcatel was seen to be trading somewhat near to 16 US$ per share in the same time when it paid about 13 US$ to buy Lucent. Observing the downfall ever since then the share of the two unified organisation was found to tumble back down to almost 1$. With this intense years of cross culture distress, lack of innovativeness and rigid officials even tens of thousands of jobs were also pulled back.
Cross cultural incompatibility
A dramatic cross working culture was seen to be witnessed in the descriptive collaboration of Alcatel and lucent. Ever since the merger took place in 2006, it was seen that the collaborations had led to the division of organisational dimensions in terms of power, individualism, orientations towards long term and short term goals and even the perception distribution of the various subordinates being taken into consideration which has also come up to extensively serve as the reason of major cross cultural hardship for the two aimed organisation.
The cultural incompatibility distress was also evident concerning the prospects of these two organisations which across the passage of time refrains the organisations to achieve their potential goals.
When the managerial clash took place of CEO Patricia Russo and board member Serge Tchuruk the company nearly witnessed the revenue losses which were fundamental to the changes to be implemented in the executive board of the company. Finally the executive restructuring was also achieved post the resignations of Russo and Tchuruk in 2008.
With the advent of the merger of these two organisations, they made innovativeness as the major aspect to combat the overcome the competitive verge. As of which the company was also found to invest a huge amount of about 2.5 billion euros in its research and development pipeline which certainly also strengthened their patent portfolio also with about 27,900 active patents and even more in the fact sheet as of 2011 But that all could not live up to the expected outcome.
Lack of innovativeness on unification
Alcatel-Lucent would have considered to work offshore of some business development in operations to an extensive edge to meet up the operational cost of the business There inclination more in terms of research and development was ascertained to grow more so that they could match up the pace with the technological advancements going across the globe and survive through the competition especially through the Chinese marketplace.
It was also being seen that various reports in 2006 cited that the merger also faced the considerable differences across the inter relatable masculinity and femininity dimensional issues.as during that time itself these elements were valued the most in regions of USA and France.The inter country difference were clearly rolling out these implications and operations too within the organisations.
Quarterly losses in a row
All of the most drastic incident which happened to be with this collaboration was the consecutive quarterly loses for almost six times in a row which certainly depicted that in efficiencies associated with the cross cultural distress and management issues.
The alleged nominal
This acquisition was not able to justify itself in making up to be one of the strong strategic alliance which could prove to be symbiotic for the mutual growth and prove to be mutually effective to both the organisation in the long term. Identification of their inbuilt potential would have allowed them to stand out from the competitive edge which they were testifying
The entire decade followed by their acquisition suffered tremendous loses in term of financial up thrust also.
Foremost being, the concern that who was actually taking in charge of this unified business entity. As Russo became the CEO and the chairman position was taken by Tchuruk, the cultural dilemma in management was also seen to be affected severely. The compounding clash of cross culture raised even more challenge to the merge units as the entity could face together.Ever since this unification witnessed the downfall the American way to cut down the job and decreasing the bar of cost on one hand and French way to seek assistance from any government or non-governmental organisation was criticised from the very beginning.
Well though the two companies came together to tackle with the growing competition across the globe but as curtained could not happen to be true in all its sense. Had they would have worked more in their research and development domain and would have seeked focus on operators and worked more of to identify the future perspectives of the two unified companies.