PUBLIC RELATIONS AND PROPAGANDA HAVE DISTINCT DIFFERENCES IN THEIR PRINCIPLES, ETHICS AND RESULTS

 

Introduction

The dynamics of contemporary society are undergoing drastic changes; hence the business environment is expected to develop coping mechanisms.  Precisely, the forces defining the business environment are compelling businesses to create the right image in the public arena which is imperative for their relevancy and survival.  Amongst the reasons behind this paradigm shift are the changes in channels of communication, the rate of broadcasting information and technological processes. These factors create an effective channel to reach a wider audience and disseminate the latest market information such as the availability of a variety of products, products’ features and prices of different goods as well as services.  To remain competitive and retain customers, businesses need to generate positive media coverage to create a positive image in the public eye. This approach is referred to as public relations. PR activities have been employed extensively to achieve their objectives effectively.  Consequently, public relations and propaganda are viewed as approaches that aim to shape viewpoints and influence a specific market niche opinion. Thus, it is noteworthy to mention that PR uses propaganda to support their customers’ interests while employing a myriad of techniques to persuade and influence a specific customer base. However, while public relations and propaganda are akin to communication objectives, they are distinct differences in their principles, ethics and results.

Concept of Public relation and Propaganda

The biggest message between propaganda and public relations is the degree of the truth in the message.  According to Theakrer (2020), public relations can be defined as the act of having persuasive information and executing adjustments to Forster's support for an activity or an institution. A successful PR presents an image that is aligned with the reality. Also, its persuasive nature helps in convincing the masses that it is the reality. Notably, a high percentage of PR is directed towards the general public but some reasonable percentage is directed towards the human capital within an organization (Moore et al., 2023).  PR entails several steps that include but are not limited; to conducting research, promotion, information planning, implementation of ideas and evaluation of the outcomes. It achieves its goals by connecting its activities such as publicity and media consultation that are central to disseminating information to the public. On the contrary, PR activity can be executed using unorthodox means of relying on information that includes propaganda.

 Propaganda is a persuasive mechanism that aims to shape public opinion, attitudes and beliefs using unacceptable means such as deception and lies.  Its main objective is to get support from the public and acceptance; concurrently creating hatred for the opposing party (Bredikhin et al., 2020).  In other words, primarily is to serves the interests of the messenger.  The messenger relies upon one-sided information, emphasizing the strength of one side while highlighting the limits of the other (Bastian, 2006).  It employs communication media, for example, television, radio and newspaper to reach a mammoth audience.  Since such an audience is incapable of giving feedback, it simply agrees or disagrees.

 Channel to amplify salient information’s and organization’s milestones

In a situation where PR is aligned properly with other marketing activities, it is effective in amplifying what the organization is trying to communicate using alternative channels. For example, a press release launching a new product can be timely used as a channel for marketing the product, even though the product is making its debut in the market. According to Grunig et al., (1984). The four models of communication in PR are its representation in reality. Gruni’s four models have influenced scholars in the PR field, and it is considered a perfect model in modern society (Vivian, 2017).  He draws an intellectual roadmap with well-entrenched phases that make a distinction between PR and propaganda. Precisely, it makes PR intellectually respectable, more practical and also teachable. The First three models target to help an organization to be goal-oriented.  According to Gruning, persuasion is a softer word in comparison to manipulation. He further purports that persuasion has always been an integral part of the fourth model (two-way asymmetrical); hence it is not rejected since it is symmetrical.

 The press agentry/public model of PR will attempt to amplify the key information of an organization’s product or services by getting media coverage.  Although the organization is not very concerned with the truth and accuracy, PR is not like propaganda that uses excess efforts to attempt to control public opinion and discard any dissenting arguments (Seletzky et al., 2010) . For instance, a case study of the Beijing 2008 Olympics.  The Olympics is an all-round competition being held every four years and attracts millions of spectators and thousands of participants. Since it is a global event, the visitors view things differently because of the differences in cultural backgrounds (Fei et al., 2021).  China being a communist state, controls media activities and the utilization of the internet.  Therefore, due to this factor, a major challenge faced the organizations in the country, as they tried to maintain positive public relations. Also, it plays a role in resolving the issue of engagement, a bit complicated compared to most of the countries worldwide. The event was important to the Chinese government and, therefore they used media to show that the government was committed to maintaining an open environment even before the beginning of the tournament.

Consequently, to amplify information regarding its milestones, PR employs a public information model. The model is confined to the organization disseminating true and accurate insights to inform the public (Fawkes, 2007). For example, a company releasing information on its public health campaigns aimed at dealing with waterborne diseases due to heavy flooding. While PR may be targeting to release accurate and truthful information, Propaganda in most cases employs ‘in-house journalists’ who primarily serve the media with lies and deception that people want to hear.

  The third model aims to achieve efficient communication.  The two-way asymmetric nexus is on understanding the thinking of the public (Kelly et al., 2010).  For instance, when an organization is launching a new product, the message will be packaged better with a proper approach. In a nutshell, within this model, the organization distributes feedback tools such as questionnaires. Notably, the ultimate objective of the two-way asymmetric model is to compel the audiences aligned to the desire of the organization and not bring changes to the organization.

 Within the context of the amplification of important information, such as the launching of a new product, PR employs a two-way symmetrical model. The model realm is on engagement and relationship between the organization and the public (Milojevic, 2015). Therefore, before launching a new product, the organization will try to engage the public to understand how they think. The feedback will then be utilized to make better decisions and directives in the interest of both parties.  

 Engaging with audience

Fundamentally, PR activities can generate compelling and attractive content that can feature on various platforms of the organization such as websites and social media. Thus, such information can be amongst the approaches to changing with subscribers. It can be the source of generating interest and traffic even with the culmination of the PR undertaking. Also, the movers and shakers in the industry may visit these digital platforms to get the latest information such as product development, growth plans and also various news.  The advancement in communication technology makes digital platforms the ideal platforms to communicate two-way interactive.  According to the study that involved assessing organizations’ communication, it is only government corporations and nonprofits organization that prefers to use one-way communication in their various digital platforms (Kirkwood, 2017).  According to Waters et al., (2011) these kinds of organizations have a strong preference for a one-way communications model to pass information digitally and the press agentry model was more utilized than the three other models. The systems theory emphasizes that the organization are part of the business environment that facilitates the interconnection and interaction of systems.  For example, the media, federal state, buyers and many others may be the systems within a company’s environment. While the organization is focusing on establishing an efficient external system, it is also important to have an internal system. The internal systems should have interacting subsystems, where they’re a myriad of units affecting the operation of each other. They include but are not limited to the production units marketing and accounting units. Notably, the main objective of the theory is that the survival of the organization should be pinned on monitoring and adaptation to the ever-evolving and changing environments between the systems.  The interaction between the organization and its customer base is only to provide the organization with useful insights and retain the customer base (Idris, 2020).  Although dialogue communication seems to be an effective PR activity, it is facing challenges. They are mainly triggered by organizations not willing to use social media and websites as a mechanism for reaching out to their customers. Briones et al., (2011) on research on the cross social media revealed that the challenges of building relationships and meaningful conversations on digital platforms are directly proportional to the staff’s resources and the average time spent online.  The other delimits are on assuring the organizational management of the importance of digital platforms on two-way communication and fostering a relationship.  Soon et al., (2014), study in Singapore federal state indicates that challenges in two-way communication are the investment in terms of time and resources to pursue a successful communication and the identification of the best evaluation method of evaluating public engagement on various sticky issues.

Sense of entitlement and employee pride

 An organization using PR to organize corporate social responsibility activities can help boost employees’ pride and morale.  Such activities provide an ideal opportunity for employees to work and collaborate to ensure the success of the undertaking. According to Tech and Yeomans (2017), they infer CSR is a responsibility of any organization to its society. Therefore, the employees who execute the four dominant PR roles will have a sense of entitlement and pride. During the CSR-PR undertaking the expert prescriber is responsible for identification communication breakdowns and problems.  They are also expected to develop solutions. The communication breakdown between the organization and the public will be solved in an efficient and effective approach to avoid creating more problems that may need another public relation (Broom and Smith, 1979).  The communication faciliatory employees are expected to be the bridge between the public and the organization. Their job is to facilitate interaction and play an important role in enabling and developing two-way communication. The purpose of two-way communication is for the organization to gather more information on customers’ viewpoints and act accordingly according to both parties’ interests (Broom and Smith, 1979). Another type of employee involved in CSR-PR activity is the problem-solving process facilitator.  Their job is to identify and develop mechanisms to solve problems. However, unlike the expert prescribers who work individually, they are expected to work together with the organization’s management. The collaboration ensures that they offer tailored solutions to the identified problems.  Finally, the communication technician employees are responsible for writing and distributing communication content such as press releases.  Notably, in any PR activity, there must be a press release to relay information to the public on the latest developments. However, the communication technician is not in problem-solving or strategic planning processes. In other words, their job-specification is not a task-oriented role.

 

Conclusion

Similarly, while propaganda and public relations share some similarities in communication activities, there is a distinction in their operations. Based on the information presented in the essay, it is clear that PR uses persuasion and transparency. In other words, the findings have alluded that effective persuasion is capable of shaping perceptions. Furthermore, it influences the way people interpret and accept information, hence underlines its importance in the modern society.  However, it is worth noting that even though information is persuasive it does not mean it is ethical. This is the case with propaganda that uses lies and deception to persuade the public.

 

 

 

 

 

 

 

 

 

 

 

References

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Bastian, A., 2006. Public relations vs. propaganda. Transylvanian Review of Administrative Sciences, 2(18), pp.20-25.

Bredikhin, A. & Udaltsov, A., 2020. Propaganda as a means of implementing the ideological function of the state

Briones, R.L., Kuch, B., Liu, B.F. and Jin, Y., 2011. Keeping up with the digital age: How the American Red Cross uses social media to build relationships. Public relations review, 37(1), pp.37-43.

Broom, G.M. and Smith, G.D., 1979. Testing the practitioner's impact on clients. Public relations review, 5(3), pp.47-59.

Fawkes, J., 2007. Public relations models and persuasion ethics: a new approach. Journal of communication management, 11(4), pp.313-331.

Fei, W.A.N.G. and Tong, T.O.N.G., 2021. Paradigm Shift and Networking: Reconstruction of Public Relations Concept and Practice of Beijing 2022 Olympic Winter Games from the Perspective of Relationship Management. 上海体育学院学报, 45(7), pp.35-43.

Idris, I., 2020. Propaganda in Contemporary Public Relations. In Proceedings of the 1st International Conference on Anti-Corruption and Integrity (pp. 82-89).

Grunig, J.E. and Hunt, T., 1984. Managing (Bredikhin & Udaltsov, 2020)

 

 

Kelly, K.S., Laskin, A.V. and Rosenstein, G.A., 2010. Investor relations: Two-way symmetrical practice. Journal of Public Relations Research, 22(2), pp.182-208.

Kirkwood, C.A., 2017. Non-profit organisations and stakeholder relationships: assessing digital communication through public relations theory: a thesis presented in partial fulfilment of the requirements for the degree of Master of Communication in Public Relations at Massey University, Wellington, New Zealand (Doctoral dissertation, Massey University).

Milojević, A., 2015. The two way symmetrical public relations and digital communication technologies: Between theory and praxis. CM-časopis za upravljanje komuniciranjem, 10(35), pp.81-108.

Moore, S. and Hübscher, R., 2021. Strategic communication and AI: Public relations with intelligent user interfaces. Routledge.

Seletzky, M. and Lehman-Wilzig, S., 2010. Factors underlying organizations' successful press release publication in newspapers: Additional PR elements for the evolving “Press Agentry” and “Public Information” models. International Journal of Strategic Communication, 4(4), pp.244-266.

Soon, C. and Soh, Y.D., 2014. Engagement@ web 2.0 between the government and citizens in Singapore: dialogic communication on Facebook?. Asian Journal of Communication, 24(1), pp.42-59.

Tench, R. and Yeomans, L., 2017. Public Relations Theories.

Theaker, A., 2013. The public relations handbook. Routledge.

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Do M&A deals create value for acquirers in Media & entertainment industry, with a focus in gaming industry

 

Literature review

This chapter introduces theories that formulate the foundation of the thesis. It highlights core theoretical principles and assumptions that inform the empirical analysis. The first two chapters introduce literature on mergers and acquisition research and efficient market hypothesis.  The chapters form the foundation for the applied method and elaborate on assumptions and theories backing the method. The subsequent two subchapters present the characteristics of the gaming industry to analyse the result.  The last subchapter summarizes academic theories and analyses M&A growth opportunities and challenges.

 

 Background on Merge and Acquisition   

Fundamentally, the terms mergers and acquisition are utilized interchangeably; however, some differences are quite salient. A merger is a combination between two, in most cases smaller size, enterprises and organizations. In a narrow view, it is a friendly transaction where top-level management in each organization seeks the shareholder's organization's approval to partake in decision-making.  The deal is negotiated within an elongated duration since there is a deep consideration of different company structures and philosophies. On the other hand, acquisitions can be defined as a hostile process enforcing the absorption of another company that ceases to exist after the process.  Therefore, acquisition undertakings are referred to as mergers even though it is debatable (Majaski, 2020). According to Moeller & Brady (2014), M&A is central to the global strategic and financial business landscape.  There is a strong correlation between the transactions and the natural evolution of organizations. Furthermore, there are powerful mechanisms to foster cooperative growth when operating in a conducive environment. For many investors, the assumptions are that such deals create value for companies underscoring the value creation aspect although the outcome can be different.

 There exists a myriad of reasons for involvement in M&A activities as well as how they are grouped differs significantly between the authors.  Trichterbon et al., (2016) argue that prior M&A experience impact positively on its general performance. They hypothesize and indicate that the M&A function, a segregated dedicated company department, rapidly enhances merger and acquisition performance. The department functions as the centre of all the M&A-related information and critically makes them proactive instead of reactive in M&A deals. Furthermore, it facilitates nursing prerequisite learning mechanisms and equips the M&A process with the necessary experience and capacity.

According to Aloke Ghosh (2001) in his study, his argument points out the vast majority of value creation found in the previous merger an acquisition researcher was biased. He argues that since the companies engaging in M&A are from a period of above-average profit they are therefore incomparable to the mean of the market but to the threat of the matching organization. In his study, he did not explore how merging firms were in a position to balloon cash flow after the merger. He did however conclude that in situations when cash was utilized as payment after the merger, there was an increment of cash flows.

 

Efficient market hypothesis

The efficient market hypothesis theory (EMH) also known as Random Walk Theory was created by Eugene Fama in the 1960s.  The theory is pegged on propositions that the prevailing price of stocks reflects on every available information at the moment such as the value of the firm (Glimne et al., 2021). It deals with the fundamentals in finance on the reason for the changes in prices in security markets and the way changes are occurring. It purports that there is a high degree of complexity in dealing with the market consequently, risk is adjusted using the market available information since the information is available to all parties and they are expected to make decisions based on it immediately. Berk et al., (2017) stated that security with equal risk should reciprocate returns, however, the statement is considered incomplete since the non-existence of the definition of equal risk. And because people from different backgrounds have different opinions and beliefs, they have differing judgements on riskiness.

 The EMH argues that profiting from the act of predicting price movements tends to be complex and not likely.  Thus, the fundamentals of price changes are the introduction of new information. A market is classified as efficient if there are prompt price adjustments without inclining towards price information (Ţiţan, 2015). The outcome thus is on the prevailing prices of securities having a reflection of information in entirety at a specific juncture. Furthermore, with all consideration factors, there is no reason to believe the prices are either unprecedentedly high or low. In other words, the security price adjustment occurs before an investor trades or makes a profit using new information.

The significance of an efficient market is due to high-intensity competition among investors ready to generate profits from the availability of new information. Precisely, the ability to figure out under and overpriced stocks is imperative (Clarke et al., 2001). Consequently, many people spend a considerable amount of time and capital in the effort to detect wrong-priced stocks.  Thus, naturally, as many of the analysts compete against each other the effort to exploit each other of over or -valued securities and the likelihood of the ability to find and capitalize on such mispriced securities diminishes.  Understandably, in equilibrium, only a relatively small percentage of the analysts will be able to profit from the exploitation of mispriced securities, mostly in an expected way (Ţiţan, 2015). For many investors, the information analysis payoff has the highest chance of not outweighing the transaction costs.

 The most salient implication of the EMH can be stated in the form of a slogan: To begin with is ‘Trust market prices’ at a given time, prices of securities in a market that is working correctly reflect all the available information to investors. Consequently, there is no opportunity for double-playing investors and therefore the outcome is that all investments in a market that are working efficiently are ‘fully priced’ which is normal because the investors are getting exactly what they have spent money on (Clarke et al., 2001).  However, the fair pricing of all securities will not that the performance of all will be equal, similarly, the chance of rising or falling in price is expected to be fairly for all securities. Thus, according to the capital markets theory, the expected outcome from security is a fundamental function of its risk.  It is worth noting that the price of the security reflects the current price value of the expected cash flows shortly and it involves various factors that include but are limited to volatility, liquidity as well as the risk of going bankrupt. Nevertheless, while the prices are rated in terms of rational, the expected changes in prices are supposed to be random and out of range of predicting since it is classified as new information using its very nature and it should be unpredictable. In a nutshell, stock prices are opinions to follow a random walk. Based on these findings, the report would like to test whether the hypothesis the report would like to test so that it can determine the importance of EMH in developing theoretical on the merger and acquisition

Hypothesis (i)

 EMH is claiming that no new information is used in making M&A decisions and is reflected in the market prices. But it can be observed the time is fluctuating all the time, thus EMH is incorrect.

Gaming industry and M&A

The gaming industry is in the midst of a period of rapid growth and diversification. The worldwide games market as of 2021   has generated $ 175.8 billion, however, despite the slight decline in revenue generation the market was poised to generate more than $ 200 billion within 4 years. The growth of the market is majoring attributed to the prevalent adoption of mobile devices, the increasingly widespread female gamers and also the democratization of the accessibility of gaming via cloud-based services. In the contemporary world, while digital content and subscription-based models are gaining popularity there is still a significant percentage of the market for physical games and hardware upgrades. Consequently, as the gaming industry continues to develop, evolve and attract a diverse range of players, the investors need to have profound insights to facilitate their understanding and catering of specific preferences and needs of underserved audiences.

Thus, considering the developing nature of the gaming industry, there are few academic research work that instigate value creation, especially in the media and entertainment industry covering the gaming sub-sector. However, there are various studies available. Markus Schiefs's (2013) research work titled “Business Models in the Software Industry “defines the business model traits and their impact on the company and M&A performance. By classification, the outcome reflects the current situation in other sectors.  He argued that the value added to the acquired company is positive and, in most cases, there is considerable emphasis that organizations are ready to pay high premiums to seize technological opportunities.  The information for company acquisition however is not conclusive. Consequently, Schief in his findings came up with three characteristics of positive M&A performance for the acquirer. The market seems to have a positive reaction to what he terms software companies that are majoring in application software, the software firms that are utilizing M&A not as an initial source of innovation for the updating of their portfolio and M&A events from an organization based in the consumer software sector.

The thesis study by Tatiana Abromava “Stock price reactions on M&A, Dividends and Game Releases. Evidence from Gaming Industry (2013)” researched 55 M&A pronouncements in the gaming industry sector for five years starting from 2008. The study found that the events positively impacted the CAR of the acquirer and the organization being acquitted stock prices and that the process of buying a near stake in a company affected positively the acquirer's stock during and after the event duration.  the increasing change in dynamics of the gaming industry is driven by innovation and lucrative virtual products and convinced the investors to seek M&A-driven growth opportunities within the sector. Thus, the strategic decisions to exploit the opportunities and be profitable may be through a combination of companies, the acquisition of profitable iPs to seek loyalty; gaining a customer base, or whether the acquisition will be central in enhancing the human capital a talent pool within the organization. Based on these findings we will conduct regression analysis to ascertain the hypothesis below.

Hypothesis

Hypothesis (ii); the Acquirers in the gaming industry are exposed to more favourable conditions compared to the rest in the music and entertainment industry

 

 

 

Characteristics of gaming industry

According to Marchand et al., (2013), the gaming and software turnover are cyclically attached to the hardware that they used for their operations.  It means that a new console is needed when games are sold and thus many people will have the get a new console until it reaches the peak before starting to experience a decline while waiting for the arrival of the new generation of consoles. Furthermore, their study argues that the demand for gaming has been taking significant market share and it may impact the wellbeing of video gaming sales. Matt Gardner (2020) states that the gaming industry is expected to experience a new level of growth for the next half a decade but it is not attributed to the gross sales revenue of the next generation consoles such as PlayStation 5. Instead, the growth of the revenue in gaming sales is expected to be the result of mobile and cloud-based gaming.

 Leverage

 The impact of leverage as for the time of M&A announcement, various studies have found it has impacted negatively on the company’s leverage on the chances of success in the process of completing acquisition even when operating under favorable conditions. Harrison et al., (2014) that companies with higher leverage tend to possess fewer resources that are prerequisites in value creation including post-announcement undertakings, which are generally a high-cost activity with the ability of adverse effects that may be not correct under specific debt agreements. Their study also found that a trading strategy that shorts acquirers with unprecedented levels of leverage and purchasing rivals of those companies results in considerable positive buy-and-hold high-level returns of at least 35% over 2 years after the acquisition announcement. Also, Jankowitsch et al., (201) indicate that even though the increased risk of debt utilized in financing the acquisition in a situation where the acquirer is highly leveraged at the time of the M&A announcement, the bonds of such a company tends to surpass the performance of bonds of acquirers with lower leverage, nonetheless both of their returns are not positive.  Cardoso's (2020) study employs dummy variables to aid in expressing the levered nature of the acquirers and their targets. The outcome of the study stressed that “results that pointed a ‘negative and statistically significant at the1%and 10% level”.  Nevertheless, the study further indicates that long-term variations, become weak drastically indicating that there is more than one factor such as the ‘management quality and macroeconomic context’.  That addresses various post-merger performances.

 Stakeholder performance implications

The theoretical framework based on the stakeholder theory level is that management and organizations are not only mandated to create the best resources for their investors but need to have a panoramic view of the interests of the customer base, and suppliers inter alia to maintain success in the long run. The theory is the result of the necessity for managers to deal with the ever-evolving business environment and the quest to have a broad framework that looks beyond the interests of the stockholders (Clarke et al., 2001). In other words, it was designed to have a deep comprehension of the needs of all parties involved who in one way or another could affect the success of the company’s objectives and goals. The implementation is through actively managing the relationship and the surroundings regarding and revolving around the business.

 The extensive studies regarding the implications of M&A result in mixed outcomes on the advantages of M&A on outcomes for the acquirers. According to Rau et al., (1998), the Acquirers and the company may be disadvantaged by overpayment, while the target company shareholder may benefit from a short period, although some researchers are claiming that the question remains unanswered. Agrawal et al (1192) in their deep research teaching Jensen et al., (1983)   findings, tried to determine the EMH, which argues that M&A should be profitable for shareholders, the findings remained unsolved, the findings that the acquirers and the firm are estimated to be losing at least 10% of their market value in the 5 years after M&A announcement instead of gaining. Another research work, utilizing a control group of non-acquired organizations concluded that after an M&A announcement the performance for both non-acquired and the ragged firms is akin. the acquiring firm shareholders among the rest tend to benefit less or experience similar returns that the returns are neutral since they incur the entire cost of acquisition, the issue of interaction and the serving debt.

Growth Opportunities

 Since there are low entry barriers, there are many game publishing companies making their entry into the market but many are struggling to reach the point of break-through. According to data from Statista (2016) close to 19000 games were released in the market at the beginning of 2016. Thus, for most of these companies to have a future they must either be acquired or forced to exit the market due to a high level of competition.  Further, since game technology is rapidly developing and competition is becoming stiffer, the cost of game production has also been increasing.  For big companies, it may become more profitable through the acquisition of small potential companies rather than engaging their developers to develop a game from scratch. Consequently, the amount of media time and consumption via the video industry has gained steady momentum in recent times since large companies have created a tendency to acquire games to increase their intellectual properties and practice business diversification.  For instance, Disney organization acquired social game development firm  Playdom I in a deal worth $ 762 million whereas Warner Bros  Home Entertainment purchased “Rocksteady and Studios” and “Midway Games”.

 Challenges and risks in the gaming industry

Despite a myriad of successful cases in gaming industry M&A, the deals also faced numerous challenges and risks. They include but are not limited to integration issues, cultural issues and the overestimation of the synergies.  For example, Blizard’sacquistion of King Digital Entertainment faced the challenge of integration, and in return, it impacted negatively on the anticipated synergies and financial performance.  Consequently, the gaming industry's foundation is based on technology.  Technology is increasingly evolving at a faster pace and therefore it is upon the firms to keep up with the pace. The fast-paced nature of the gaming industry means that the technological obsolesce and frequent shifting of customer preferences can result in the eroding of the value of the acquired firms and results in losses to the acquirer shareholders.   Thus, the acquirers must mitigate the risks to realize sustainable value creation.

 Post merger transition may result to conflict-of-interest regarding the organization culture. The merger and acquisition mean that new employees from the acquirer company come with a different culture that may conflict with the already existing culture.  If the situation is not well addressed it may lead to dwindling of performance post the M&A. therefore, the acquirer company must be interested in the organizational culture and how to deal with it. The interest is pegged on how the organizational culture may evolve o change since there is adjustment in the human capital and in most cases replacing the existing employees.

Summary

 The literature on the gaming industry M&A used the EMH theoretical approach to build argument on M&A.   therefore, using the empirical findings the report nexus is capturing of new findings. The report extensively covered gaming industry and the implications of its characteristics. The employment of leverage, challenges and opportunities provide the report with strong foundation to testing its hypotheses.

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what is the disadvantages and advantages of virtual teams

 write a discursive essay? 
 Topic what is the disadvantages and advantages of virtual teams
 Introduction to disadvantages and advantages of virtual teams
Body
 Two advantages of virtual teams
 Flexibility
Cost savings
Two disadvantages of virtual teams 
 miscommunication
Conclusion 

what is the disadvantages and advantages of virtual teams

With the tremendous impact of innovation disruption, there is an increase in the number of organizations, especially those with well-entrenched research and development (R&D) undertakings incorporating virtual teams in their operation to generate a competitive advantage relative to limited resources and workforce.  Decent number of scholars concurs with the assertions that teams are central to the well-functioning of an organization. Subsequently, since the concept of virtual teams emerged in the 1990s, it has greatly evolved. This statement means that, currently, business environments’ are dynamic; collaborative and competitive hence virtual teams are a prerequisite for the survival and success of businesses (Gupta and Pathak, 2008). Companies create teams of employees from different backgrounds to address the concerns and wants of the customers. Virtual teams allow an organization to hire the best employees irrespective of their geographical location; however, its effectiveness depends on the members' capabilities within the team. Thus, the essay premises are to underpin the critical analysis of the advantages and disadvantages of virtual teams.

              Virtual teams provide an organization with an unprecedented level of flexibility. The realm enables the virtual members to work parallel in multiple teams since the regional location is inconsequential for membership (Bergiel et al., 2008). Notably, the management is allowed to formulate a highly specialized team that to append the targeted problems and deliverables.  More flexibility is confined in a way that, extra resources from the team may be rotated within a myriad of tasks and also projects using an agile approach (Mehta, 2020. Consequently, the concept allows a greater amount of flexibility and autonomy when dealing with time management. In other words, the virtual teams are always in charge of their time. In effect, it facilitates members to structure their work schedules following the workload and the project priority. The combination of structure and flexibility is salient.  While the structure is provided in terms of weekly meetings and communication norms, flexibility allows the team members to express their work styles and personalities. The structured flexibility is the avenue that provides the grounds for employees to bring their unique and best form of selves to work, hence enhancing their well-being and performance. In a nutshell, flexibility is vital to maximizing the employees’ engagement and performance since it motivates them to work and contribute positively to the team.

            The virtual team concept is confined to cost savings. Amongst the biggest advantages of virtual teams enjoyed by companies is cost savings.  There is a reduction in time and costs, and travel expenses. In the simplest words, they deal with the challenges of space, time and organizational issues that physical workplace face (Deeb, 2020).  The organization is in a position to get rid of various expenses that include but are not limited to real estate, office spaces and utility bills. The significant cost associated with these expenses may be reduced or eliminated since the virtual communication mode is via technology. The reduction in in-personal meetings is central to the lowering in the level of disruption in the daily operation of the business. In a nutshell, virtual teams are an enabler for cost savings in operational costs that further lower production costs.

                The lack of skills in technological application and knowledge among the employees impedes the seamless operation of virtual teams. Gheni et al. (2016), the virtual teams have been experiencing a generation gap since there is a lack of skills in technological application among the senior mature gaps. In most cases, the younger generation is more tech-savvy than their senior members, who in some instances may lack even the basic computer skills. Subsequently, the younger generation is utilizing modern technologies as part of their day-to-day lives.  There is also a lack of knowledge know-how on the complex technological applications concerning virtual learning. Since virtual teams are a new structure, many employees will require further training to comfortably navigate through the domain (Porter, 2021). Fundamentally, organizations create virtual teams with zero understanding of the unique consequences of the decision. Notably, even computer-oriented individuals may not possess enough required knowledge to meet the technological demands of the virtual team. In a nutshell, virtual teams are technological-oriented, and apart from the technicality, there is also the cost factor.

               Failures and misinterpretations of communication cause a vast risk to virtual teams.  Fundamentally, virtual teams’ composition is members of multi-cultural (Krawczyk-Bryłka, 2016 & Johnson et al., 2020). In particular, the team members may have different levels of language skills and therefore, have a different understanding of the language. In the narrow sense, the risk of misinterpretation is evident when there is a combination of a lack of verbal cues, facial expressions and even tones (Saarinen, 2016).  Commonly, individuals may misinterpret the message and get offended even though the message is not offensive. The interpretation of the message is a prerequisite for conflicts; hence it may be difficult to manage considering the interpretation heavily relies on the non-verbal cues, which are unavailable in virtual communications (Norwich University Online, 2020). Also, misinterpretation may cause inefficiencies, especially when the team is working with deliverables. This statement deduces that when the requirements and deliverables are misunderstood, the project or a task may be executed on an incorrect basis. Therefore, misinterpretation of communication will lead to a lack of trust, conflicts and inefficiencies.

                   In conclusion, the rationale underpins virtual teams and indicates merits on both sides. Many teams are responding to their dynamic environments through the introduction of virtual teams. In effect, the concept is growing in popularity. They represent such an organizational form that potentially can revolutionize organizations and provide enhance their flexibility and responsiveness. Nevertheless, the concept is facing a myriad of drawbacks. They utilize multiple communication technologies, which are costly to purchase, install and maintain. Therefore, the technologies are changing rapidly and provide solutions to businesses' problems, and there is a need for the organization to align itself.

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Bergiel, B.J., Bergiel, E.B. and Balsmeier, P.W., 2008. Nature of virtual teams: a summary of their advantages and disadvantages. Management research news.

Deeb, G., 2020. The pluses and minuses of virtual teams. Forbes. Available at: https://www.forbes.com/sites/georgedeeb/2020/05/04/the-pluses--minuses-of-virtual-teams/?sh=5d704b2e3aba [Accessed April 17, 2022].

Gheni, A.Y., Jusoh, Y.Y., Jabar, M.A. and Ali, N.M., 2016. FACTORS AFFECTING GLOBAL VIRTUAL TEAMS'PERFORMANCE IN SOFTWARE PROJECTS. Journal of Theoretical and Applied Information Technology, 92(1), p.90.

Gupta, S. and Pathak, G.S., 2018. Virtual team experiences in an emerging economy: a qualitative study. Journal of Organizational Change Management.

Johnson, J.L.and A., 2020. Are virtual teams good or bad for Diversity and inclusion? Forbes. Available at: https://www.forbes.com/sites/amberjohnson-jimludema/2020/09/25/are-virtual-teams-good-or-bad-for-diversity-and-inclusion/amp/ [Accessed April 17, 2022].

 

Krawczyk-Bryłka, B., 2016. Intercultural challenges in virtual teams. Journal of Intercultural Management, 8(3), pp.69-85.

Mehta, S., 2020. Covid-19: Benefits of virtual teams during Corona virus. LinkedIn. Available at: https://www.linkedin.com/pulse/covid-19-benefits-virtual-teams-during-corona-virus-sheetal-mehta--1c/ [Accessed April 17, 2022].

 

Norwich University Online, 4 challenges of virtual teams and how to address them. Norwich University Online. Available at: https://online.norwich.edu/academic-programs/resources/challenges-of-virtual-teams [Accessed April 17, 2022].

PORTER, C.H.R.I.S., 2021. Can we work in the metaverse? UC Today. Available at: https://www.uctoday.com/collaboration/can-we-work-in-the-metaverse/ [Accessed April 17, 2022].

Saarinen, J., 2016. Managing global virtual teams.