Problems In Integrating German Companies In Group Structures

Subsequent to the strategic acquisition of a German company by a German or foreign company group, the target is usually integrated into the group organization of the acquirer. Group companies are usually organized in a vertical (meaning top-down) and functional manner. In many cases, the classic functional division is applied (purchasing, sales, finances, HR); however, particularly diversified company groups may prefer a division based on industry practice or product lines.

In order to reflect the organizational structure of the acquirer group in the newly acquired subsidiary, the parent company's management usually intends to suppress local organization structures at the level of the German company, to the extent possible. For a German company, this often means that the self-sufficiency it previously enjoyed has to give way for the benefit of vertical integration. This may lead to conflicts with