Microsoft and Sendit Case

CAMILLA CENCI
Microsoft’s Acquisition of Sendit (C)
Strategy and Development Modes
CASE MEMO
24.10.2018
After the offer of SEK 325 per share in cash delivered by Microsoft has successfully been accepted
by more than 90% of Sendit’s shareholders, the integration strategy for the two companies has to
be defined.
As an external consultant for Microsoft’s Board of Directors I think that the integration process
seems to be tender and a lot of challenges have to be undertaken in order to successfully Commented [AF1]: Intendi Tender offer? Perché è un tipo
di acquisition (nella fattispecie, un’offerta di takeover)…non
un aggettivo
integrate these two realities without obscuring and eventually destroying their potential and their
valuable skills.
Sendit, as a small start-up, operates in an intimate and open environment where managers have
plenty of autonomy in their jobs; while Microsoft, as a huge company, has a non-hierarchical
decision making process and a rigid bureaucracy.
Despite these diversities, the two companies join a high degree of complementarity: on one hand
Sendit has the opportunity to leverage Microsoft’s resources to establish their products as the
standard in its industry; on the other hand Microsoft needs Sendit’s technical knowledge and skills
to introduce itself in the mobile telecom world.
The acquisition of Sendit will take Microsoft one step closer to its vision of providing software and
services that deliver information to everyone anytime, anywhere and from any device. So, in order
to accomplish that there is the need of transferring skills from one organization to another.
Because of Microsoft’s lack of familiarity of the telecommunication business, it should grant a
discrete decision-making authority to Sendit’s managers that have highest experience and
technical knowledge in the mobile internet environment. In this way, with a substantial degree of
autonomy, Sendit’s employees will be more willing to cooperate in order to successfully
implement the integration strategy.
Reaching potential benefits in this case requires organizations to coordinate, interact and combine
their knowledge: to create value exploiting their technological complementarity they should also
integrate some activities in the value chain due to the fact that resources and know-how have to
be shared.
As it’s possible to see in Exhibit 1, the post-acquisition integration strategy that fits well with this
acquisition is symbiosis: there is high need for both autonomy and strategic interdependence
because Sendit capabilities need to be preserved in an organizational context that is different from
the one of Microsoft. This process requires some degree of change to various aspects of the
Microsoft’s and Sendit’s organizational design and processes, as both companies’ leading practices
should be gradually blended together.
In addition, with their autonomy Sendit’s managers at the R&D department will be encouraged to
maintain and increase their productivity and they will be also more motivated to share their
knowledge and ideas on how to combine their competencies with those of Microsoft.
So, the two organizations need to coordinate their activities in a way that will allow the effective
combination of their critical skills.
The three most important areas to consider for this integration are: R&D department; marketing
and sales department; and employee retention.
Due to the fact that Sendit’ R&D team is critical to continue to develop and refine the company’s
original software products, I should suggest that Sendit has to maintain its own R&D team. In
order to educate about and integrate the team into the meta-architecture of Microsoft’s products
one R&D manager from Microsoft should work together with them to re-organize the department
and integrate them within the Microsoft’s R&D strategy and overall infrastructure.
Likewise, in order to pool the complementary technological knowledge between the two
organizations and establish a joint technology platform to develop new products together,
continuous communication and joint action is required through teams of employees from both
companies.
The R&D team should also collaborate closely with the marketing and sales department during all
the development process in order to not delay product rollouts and to operate concurrently
developing opportunities together as they arose.
The marketing and sales departments of the two companies were extremely different and they
need to be coordinated: I suggest that the two departments should remain autonomous but they
need a strong communication and information system in order to collaborate and to constantly
exchange information. They could nominate a key manager figure who will work as a consultant
between the two departments in order that each of them will work independently without missing
the required cooperation. The marketing and sales manager of the subsidiary should present new
mobile internet solutions to Microsoft headquarters and coordinate decisions on global scales.
Therefore, Sendit should have its own marketing and sales department which will mainly account
the operations for European countries.
Due to the fact that Sendit’s assets are embedded in the code and in people’s talent and expertise,
retaining its employees is essential for achieving their economic and strategic objectives and for
the success of the acquisition.
In fact, the removal of autonomy can lead to a wide range of negative consequences, including the
departure of key executives who can feel marginalized, misunderstandings of local operational or
marketing conditions due to intercultural differences and operational inefficiencies resulting from
interrupted routines. To avoid problems such as employees’ dismissal or principal-agent problems
a clear incentive program, adequate salaries and options have to be implemented to ensure a
maximum retention of Sendit’s talents.
Moreover, the culture of Sendit should be retained in order to ease the operations of employees
since the company has a strong European culture, very different from the one of Microsoft.
Finally, due to relatedness of resources and complementarity of their technologies , I should
suggest that the acquirer company should permit to the target company to conserve its autonomy
while at the same time they should implement strategical communication and information
systems to coordinate and collaborate on key activities.
EXHIBIT 1
TABLE 1
PMI OUTCOMES SYMBIOSIS PMI STRATEGY
Autonomy of the acquired target High and strategic
Relationship power Symmetrical and Synergic
Interfirm trust High

REFERENCES
Quinn, R. E., & Thakor, A. V. (2018). CREATING A PURPOSE-DRIVEN ORGANIZATION. HARVARD
BUSINESS REVIEW, 96(4), 78-85.
Zaheer, A., Castañer, X., & Souder, D. (2013). Synergy sources, target autonomy, and integration in
acquisitions. Journal of Management, 39(3), 604-632.

Microsoft and Sendit Case

Uploaded by

Copyright:

Available Formats

Microsoft and Sendit Case

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Microsoft and Sendit Case

Uploaded by

Copyright:

Available Formats

What integration strategy is suggested for Microsoft and Sendit?

What integration strategy is suggested for Microsoft and Sendit?

What challenges might Microsoft face in integrating Sendit?

What challenges might Microsoft face in integrating Sendit?

CAMILLA CENCI

Microsoft’s Acquisition of Sendit (C)

Strategy and Development Modes

decision making process and a rigid bureaucracy.

to introduce itself in the mobile telecom world.

Because of Microsoft’s lack of familiarity of the telecommunication business, it should grant a

autonomy, Sendit’s employees will be more willing to cooperate in order to successfully

implement the integration strategy.

should be gradually blended together.

combination of their critical skills.

and sales department; and employee retention.

developing opportunities together as they arose.

the operations for European countries.

the success of the acquisition.

interrupted routines. To avoid problems such as employees’ dismissal or principal-agent problems

maximum retention of Sendit’s talents.

systems to coordinate and collaborate on key activities.

PMI OUTCOMES SYMBIOSIS PMI STRATEGY

Autonomy of the acquired target High and strategic

Relationship power Symmetrical and Synergic

Interfirm trust High

You might also like