Discuss the likely impact on a food manufacturing business’ stakeholders of a

decision to merge with a food manufacturer in another country. [20]

Stakeholders are a group of individuals which have an

interest in the well being of a company and are affected by the goals, operations,
activites of the company.They basically have a stake in what the organization
does.when there is a takeover or merger between two organizations all the
stakeholders are affected in some way, but the target business's stakeholders are
often affected negatively.

In this case when a food manufacturing business takes the decision to merge with a
food manufaturer in another country, the stakeholders which are immediately
affected are the workers, as the mergered companies might cut jobs to reduce costs
but this can beneficial to shareholders and banks, likewise if the companies are
financially strong they can also introduce new machinery to replace the manual
work, again customers and shareholders can benefit from this but it can lead to job
losses beacuse of cost synergies and can have little effect on local economy as
well which will affect the local community, also with the two companies now linked,
employees can have job insecurities and uncertainty due to new organization
structures. If the companies(now merged) increase selling prices by 10% to improve
profit margins, the management and shareholders will profit from this but the
customer stakeholder group will be affected as they will have to pay much more to
buy food products from this newly formed business and it may provoke customers to
turn away from this business, also if they ever think of transferring the
production to overseas location again the management, customers and the suppliers
will benefit from this but the local community will be affected as it will
affect the local economy and because there is loss of GDP. Similarly transferring
of capacity to international locations can cause closure in one location to enter
emerging markets. Finally there can be change in taxation status of the firm, if
the profits were to be transferred overseas with a loss of corporation tax for the
previous location's government.

As a result of merging there can be adverse reactions from stakeholders for

eg:protests, strikes,hostile and negative reactions, criticism,etc. There can even
be positive reactions due to various reasons like opportunities for promotion for
company, Investment in the company by the buyer, change in cultures, a fresh start
to the people related to the business or when the previous business manangement
didn't run the the business properly and there is hope for a better future with the
new management after merging.