A Shifting Global Economy - Who’s Gaining and Who’s Losing?

You need look no further than the large corporate merger and acquisition scorecard to see that economic power is shifting around the globe. Ken Smith’s article in the June issue of the Harvard Business Review makes the case nicely and points to both risks and responses. But first, who are the gainers and the losers?

Gainers		Losers
France	$234B	U.S.	-$220B
Spain	$101B	U.K.	-$187B
Belgium	$79B	Canada	-$158B
Switzerland	$67B	Netherlands	-$111B
Germany	$53B	Turkey	-$24B
UAE	$37B	Chile	-$13B
Japan	$33B	Czech Republic	-$11B
Luxembourg	$30B	Hong Kong	-$9B
Australia	$20B	Indonesia	-$8B
China	$15B	Ukraine	-$8B

As with any shift scenario this one presents opportunity and risk. Organizations involved will need to work out operational details, resolve cross-border governance and decide how deep the shift will go. Will executive management location for the acquired unit remain or move to the gaining country? That is a key decision since moving the executives means that other key support functions such as Finance and Corporate Real Estate are likely to follow in order to maintain strategic and operational alignment.

Competitors will feel pressure to match an acquisition if they percieve a need to match either growth or offering expansion. Doing so smartly can help maintain competitive balance, executing poorly can create competitive separation.

As these M&A’s occur CRE and FM groups are challenged to keep pace. Operations must be aligned; and reporting and management systems must be integrated or shifted. Portfolio strategy and key alliance relationships will inevitably be affected, and CRE’s/FM’s must be proactive in doing so.