Question

What are the two largest difficulties in managing a consolidated organization? What are solutions to these two difficulties?

Answer 1

The two largest difficulties in consolidated organization are:

· Merging of Financial information = The details on asset, liabilities, equity etc. if managed using different accounting standard has difficulty in clubbing and presenting together

· Cultural conflicts = Each company has its own way of working and is highly challenging to consolidate and bring synergy

Solutions to these difficulties are:

· To manage financial information, it is important to use common tool in order to make the consolidation easy. The consolidated organization must use same accounting standard so that it becomes easier to merge and show the details whenever required

· To overcome cultural conflicts, it is important to understand the cultural differences in the consolidated organization. Various steps can be taken for synergy like:

o Team building exercises

o Joint projects involving cross functional team

o Informal interactions over team outings etc.

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