Best Practices of Mergers and Acquisitions
Running head: BEST PRACTICES OF MERGERS AND ACQUISITIONS
Mergers and Acquisitions: Best Practices for Success
Abstract
Mergers and acquisitions have become a growing trend for companies to inorganically grow a business within its particular industry. There are many goals that companies may be looking to achieve by doing this, but the main reason is to guarantee long-term and profitable growth for their business. Companies have to keep up with a rapidly increasing global market and increased competition. With the struggle for competitive advantage becoming stronger and stronger, it is almost essential to achieve these mergers. Through research I will attempt to dissect the best practices for achieving merger success.
Mergers and Acquisitions: Best Practices for Success
When companies are acquired or merged, people almost immediately start to focus on the differences in the companies. They also begin to pay attention to who are the winners and who are the losers. It is typical in an acquisition for the acquiring company to see itself as the winner, and the acquired company as the loser. The controlling company wants to impose changes and view those in the acquired company as highly resistant to change. It is clear that most mergers and acquisitions are primarily based on strategic, financial, or other objectives. However, ignoring a potential mismatch of people and cultures can lead to strategic and financial failure. In most mergers, serious consideration should be given to cultural and leadership style differences.
The success of a merger or acquisition can be defined as the creation of synergy. But every merger and acquisition is a unique event, occurring in a unique environment that is subject to various influences. Analyzing a merger should begin by understanding the culture and core values of the business that is being acquired. Ashkenas, DeMonaco, and Francis (1998) observed that “. . . it is increasingly important that executives learn
Mergers and Acquisitions: Best Practices for Success
Abstract
Mergers and acquisitions have become a growing trend for companies to inorganically grow a business within its particular industry. There are many goals that companies may be looking to achieve by doing this, but the main reason is to guarantee long-term and profitable growth for their business. Companies have to keep up with a rapidly increasing global market and increased competition. With the struggle for competitive advantage becoming stronger and stronger, it is almost essential to achieve these mergers. Through research I will attempt to dissect the best practices for achieving merger success.
Mergers and Acquisitions: Best Practices for Success
When companies are acquired or merged, people almost immediately start to focus on the differences in the companies. They also begin to pay attention to who are the winners and who are the losers. It is typical in an acquisition for the acquiring company to see itself as the winner, and the acquired company as the loser. The controlling company wants to impose changes and view those in the acquired company as highly resistant to change. It is clear that most mergers and acquisitions are primarily based on strategic, financial, or other objectives. However, ignoring a potential mismatch of people and cultures can lead to strategic and financial failure. In most mergers, serious consideration should be given to cultural and leadership style differences.
The success of a merger or acquisition can be defined as the creation of synergy. But every merger and acquisition is a unique event, occurring in a unique environment that is subject to various influences. Analyzing a merger should begin by understanding the culture and core values of the business that is being acquired. Ashkenas, DeMonaco, and Francis (1998) observed that “. . . it is increasingly important that executives learn
References: Ashkenas, R., DeMonaco, L., & Francis, S. (1998). Making the Deal Real: How GE Capital Integrates Acquisitions Badrtalei, J., & Bates, D. (2007). Effect of Organizational Cultures on Mergers and Acquisitions: The Case of Daimler Chrysler Brahma, S., & Srivastava, K. (2007). Communication, Executive Retention, and Employee Stress as Predictors of Acquisition Performance: An Empirical Evidence Brahy, S. (2006). Six solution pillars for successful cultural integration of international M&As DiGeorgio, R. (2002). Making mergers and acquisitions work: What we know and don 't know -- Part I DiGeorgio, R. (2003). Making mergers and acquisitions work: What we know and don 't know--Part II LaMarsh, J. (2006). What mergers miss. Journal of Corporate Accounting & Finance (Wiley), 17(2), 59-62. Messmer, M. (2006). Leadership Strategies During Mergers and Acquisitions Pekala, N. (2001). Merger They Wrote: Avoiding a Corporate Culture Collision Stopper, W. (1999, July). Mergers and Acquisitions: Fulfilling the Promise