Success in mergers and acquisitions

Oct 14, 2010

Could casual Fridays and meeting times determine the success of billion dollar mergers and acquisitions in the business world?

According to research included in Mitchell Marks' recently published book that examines 30 years of mergers and acquisitions, only 25 percent of all business mergers and achieved their financial objectives. Marks found that the process through which the companies were integrated -- navigating differences and similarities in -- had the most impact on .

"It does not matter whether the combining cultures are similar or different, but how those similarities and differences are managed," said Marks, associate professor of management. "You can combine companies with strikingly different cultures, so long as you acknowledge and manage the differences rather than deny or ignore them."

Marks said that minute aspects of corporate culture can be important as companies come together. Mac vs. PC, dress shoes vs. sandals, and compensation packages can cause tension in a merger. "Little things like meeting starting times can mushroom into bigger issues," he said.

As the recession eases its grip and companies look to merge and expand, Marks said understanding those issues will become paramount. Many companies are undervalued, making them attractive targets for buyers, and tech companies such as will be looking to take over companies to acquire new innovations, rather than developing them in-house. "Who would have ever thought Oracle would have bought Sun?" Marks said. "There will be huge deals as executives become more confident the economy is improving. It's going to take on a life of its own."

Marks expects foreign companies to become players in the expanding market, with companies in China and India among the busiest buyers. That will introduce into the already difficult merger of corporate cultures.

He said companies such as Cisco that emphasize cultural learning have more success than those who try to dominate the other .

"You acknowledge the differences, you educate people on it," Marks said. "Companies that did deep cultural learning have better results."

Explore further: Study finds Illinois is most critical hub in food distribution network

More information: Marks will host a workshop on "Making Mergers and Acquisitions Work: Managing the Human, Cultural and Organizational Issues," for executives and managers on Nov. 4 and 5. The second edition of his book, Joining Forces: Making One Plus One Equal Three in Mergers, Acquisitions and Alliances, was recently published.

add to favorites email to friend print save as pdf

Related Stories

Chinese companies ready to drive global expansion

Apr 05, 2006

Research by IBM and Fudan University finds that Chinese companies are expanding globally to acquire technology and management skills, escape intense domestic competition and capture new market opportunities. The in-depth ...

Large Shareholders Impact Companies' Profitability, Policies

Sep 05, 2006

Corporations can't choose their shareholders, but some might wish they could. A new study found that some large shareholders are associated with lower-than-average returns for the companies in which they invest, while other ...

Recommended for you

Economist outlines work on managing tasks and time

Dec 17, 2014

"When a man knows he is to be hanged in a fortnight," said Samuel Johnson, "it concentrates his mind wonderfully." Most of us, spared such an imperative, carry on in a less-concentrated state, but it holds ...

Companies do not use online HRM effectively

Dec 15, 2014

Professor Tanya Bondarouk of the University of Twente thinks it's embarrassing : many companies and organizations are still not making effective use of e-HRM systems. These online systems can be used for a wide range of HRM-related ...

Happy-go-lucky CEOs score better returns

Dec 11, 2014

A CEO's natural sunny disposition can have an impact on the way the market reacts to announcements of company earnings, according to research from the University of British Columbia's Sauder School of Business.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.