Marriot/Starwood Merger: Communication and Financial Planning Problems

MARRIOT/STARWOOD MERGER: COMMUNICATION AND FINANCIAL PLANNING PROBLEMS
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Marriot/Starwood Merger: Communication and Financial Planning Problems
Introduction
Different constraints have always accompanied acquisitions reshaping and redirecting the corporate strategy. Besides, companies, especially in the hotel industry, advocate for unique resources, financial strategies, and management talents to shape the acquisition process (Renneboog and Vansteenkiste, 2019). Despite successful acquisitions, different research shows that companies are not meeting specific thresholds due to communication and financial problems. Therefore, there is a big vacuum between engaging in acquisitions and streamlining them to achieve the goals. There is a need to look into specific project management measures that can allow the managers to make acquisitions work. Albuquerque et al. (2019) define acquisition as the process whereby a primary company buys another company's shares to enable it to gain control. Therefore, the acquisition is an example of a project which goes through specific phases of the project lifecycle. Many researchers believe that acquisitions only occur within large corporations; however, small corporations can also engage in the acquisitions as long as they meet all the threshold and financial obligations.
The paper addresses the merger between Marriot and Starwood, which faced many project management issues such as communication and financial complexities. The major issues that the two companies encountered include IT problems, problematic membership files, external and internal communication problems, and poor PR through social media and websites (Dogru et al., 2018). Therefore, all the identified aspects can be summarized as having been generated by poor project planning. The main approach to appraising the merger is project planning focusing on communication as the major threat. The project management theories will focus on project planning to limit any possible challenges that may jeopardize project development and growth. Communication is a critical aspect of project management since it determines the company's capacity to provide a reliable channel that shapes employee information delivery (Davenport and Barrow, 2017). A merger is a critical process that requires an open and valid communication channel to prevent any possible challenges such as resistance. Therefore, the appraisal of the merger is based on communication issues and project planning.
Project Management Theories
Project Planning
The theory of planning is one of the most elements in project management. Planning is accompanied by elements such as schedule development, cost budgeting, resource planning, activity definition, scope definition, and scope planning (Naeem et al., 2018). Project planning is significant since it reduces any possible challenges and financial constraints. According to Kerzner (2018), project management is based on planning which determines the failure or success of any mergers and acquisitions. The critical aspect for success in merger and acquisition is project planning. Project planning is a critical part of project management theories which involves appropriate methods established to ensure project completion (Henningsson et al., 2018). Project planning is necessary to reduce risks and workloads during the acquisition process. It provides a fundamental picture that determines the success of the project. For instance, the essential step needed by Marriot and Starwood was an elaborate project plan that defined all the required financial requirements. It is established before the project's execution, identifies any substantial risks that are likely to jeopardize the project, and establishes a reliable framework that will ensure goal achievement. Therefore, project planning is the foundational perimeter for successful mergers and acquisitions since it is used to limit future uncertainties.
The key objective of project planning is risk minimization and management. Risks in mergers and acquisitions are critical since they increase the costs and project completion time. Every project manager must ensure the risks are eliminated using specific strategies such as scheduling which they should conduct before the actual project (Welch et al., 2020). Key strategies such as quality and open communication are also necessary to reduce potential risks. Without a reliable framework for managing risks, it becomes difficult to project the constraints that are likely to impact increased project costs. The major risk that heavily impact mergers and acquisition is financial risk. A well-established plan considering financial risk is necessary to ensure that the primary company does not experience any loss. For instance, Marriot and Starwood merger is critical since it costs $ 13.6 billion. Due to such extreme value, it is necessary to focus on appropriate financial planning to ensure reliable transformation and growth. Therefore, financial planning is necessary to eradicate the common issues noted in the merger.
Communication
The last aspect of project planning that correlates to merger and acquisition is a project and team communication. Planning for effective communication is one of the elements that the management should consider before initiating any action. Mergers and acquisitions are majorly based on communication since new employees with unique interests are coming on board. According to Chbaly et al. (2021), communication involves transferring information from one source to another using a reliable channel. Proper communication should be accounted for in the planning phase to avoid common issues such as conflict of interests and misinformation. For instance, the common issues noted from the Marriot and Starwood merger are majorly based on miscommunication. It is necessary to focus on a reliable strategy to ensure successful information among the team members to avoid misinformation. Proper communication is also necessary for mergers and acquisitions since it allows the management to establish achievable and meaningful goals (Dhaliwal et al., 2016). It also allows the management to project information challenges and set reliable strategies for achieving them. Therefore, proper communication is an element of project planning that the management should not ignore for an accurate and substantial acquisition process.
Applying Project Management Theories
The Marriot and Starwood merger is based on specific issues linked to poor project planning and communication. The companies needed a reliable framework that considers a reliable risk management framework. Risk management entails risk identification, assessment, and mitigation (Cagliano et al., 2015). Regarding risk identification, the major risk in the merger is poor communication and financial issues. Poor communication led to social media PR and other call center issues. The two companies are based in the hotel industry, and qualitative calls are necessary to promote customer loyalty and satisfaction. However, since the merger did not focus on communicatio...