Outcome 4: Assessment task 2
Supplement to the case study
The merger
David and Neil had their usual Friday meeting. This week the main area for discussion was the business’s need to re-structure. This issue had increased in priority when Neil explained that John Colbert Civil Engineering Contractors had approached him about a merger. John Colbert Senior was about to retire and the firm believed that continued success and growth could best be accomplished by creating a business that would cater fully for both the design and development of civil and structural engineering projects. One main reason behind this was that more and more clients wanted cost savings that could be derived from the synergy that would result from dealing with one organisation for design and development. Although both firms had reputations for high quality work, increasing competition and the need to make efficiency savings was making it more and more important that the two businesses looked to new possibilities for managing and developing. Over the past four years the two firms had worked together on a number of projects and they were about to start work on two major developments: the new leisure complex and the office block for the Scottish Executive, the latter of which was only secured as a result of the close working arrangement of the two firms. John and Neil were also aware that successful completion of this project could lead to more Scottish Executive projects.
Currently John, a chartered civil engineer, employed two teams. Each team comprised a team leader, digger driver and three qualified builders. When working on large developments the two teams would work on site together, but be responsible for different aspects of the site development. For instance, in road development, one team would concentrate on road production whilst the other team concentrated on bridges or pathways, depending on the design specification.
Neil agreed with John that, from a business perspective, a merger of the two companies could be beneficial in a number of ways:
The merger would primarily be beneficial because the engineers would have the formal authority to manage the construction staff. At the moment, as designers, there was an informal acceptance that the design engineer was in charge of a given project on site. A merger would help clarify this relationship.
John’s firm was based out of town and, in addition to the space for his equipment, he had a large office that would cope with the additional staff from Barbour Brown. In the past, engineering consultants had always preferred to be based in town centres. This was mainly to allow clients easy access to the engineers. As a result of new technology and computer networks, design communication tended to be done through phone calls and email. It was very rarely that clients visited the offices. When meetings were essential, these tended to take place either on site or at the client’s main office. The building that housed the offices of Barbour Brown was in a prime town location that could be
