|
Article Directory
|
+ Authors
+ Articles
|
|
|
|
Can Acquisitions Work?
Copyright (c) 2010-2012 Martin Harshberger
With annual merger and acquisition activity in the United States averaging about 1.5 trillion dollars that may seem to be uninformed strange question. Yet according to a number of recent academic studies, between 55 percent and 83 percent of mergers and acquisitions fail to add value to the acquirers.
Companies look to mergers and acquisitions for a number of sound business reasons. Among them are:
To gain market share.
To realize economies of scale especially in declining or stagnant markets.
To gain access to products or services.
To expand geographically.
To facilitate a faster growth rate than through pure organic growth.
If the reasoning behind the acquisition is sound why is the success rate so low?
A KPMG survey found that "83 percent of mergers were unsuccessful in producing any business benefits regarding shareholder value" (KPMG 1999).
A study of 150 major deals led Business Week to conclude that "out of 150 deals valued at $500 million or more about half actually destroyed shareholder value" (Feldman and Pratt 1999).
A major McKinsey and Company study found that 61 percent of all acquisition programs were failures because the acquisition strategies did not earn a sufficient return on the funds invested.
In the first four to eight months following a deal, productivity may be reduced by up to 50 percent (Huang and Kleiner, 2004).
It is not just large companies that fail at the acquisition game, small companies often witness similar results. Despite the reported failures, business combinations often do make sound business sense. It isn't the deal itself that causes the failure rate to be so high; it is the outdated implementation strategies that companies continue to use.
Vast amounts of time and money are spent on an acquisition, nearly all of it in financial and legal due diligence efforts. Typically far less time and effort is invested in pre-deal implementation planning and strategy. Key people issues such as communications, strategic planning review and functional organization are treated as afterthoughts. Most feel "those things will fall into place when we close the deal."
A merger of two companies is very much like any other partnership, just larger and more complex. There are cultures, values, work habits and attitudes that may be long standing and important to both parties. Failure to consider dealing with personnel issues effectively and early in the deal almost guarantees problems with retention of key people, productivity issues and, in worst cases, gridlock in the organization.
Companies that don't have a clearly articulated strategic plan and clearly defined goals, communicated to all levels of the organization, with understanding and accountability at all levels, have severely reduced their chance of success.
These integration issues are compounded exponentially if everyone in the acquiring company is not "singing from the same song sheet." They may well find over time that the acquired company's team isn't even in the same book.
In this situation, employees spend their time with rumors and fear of "waiting for the other shoe to fall." Management then is forced into a reactive "firefighting" mode, rather than a planned and proactive goal oriented mode of implementation.
Frequently, management's goals for the acquisition and its integration strategy (assuming that they exist) are not communicated below the top executive level, for reasons of secrecy. After the deal closes, the strategic direction and integration plans still are treated as closely guarded secrets with little if any communications directed at the department levels for a period of weeks or even months. No news is not seen as "good news," and productivity and employee satisfaction is reduced.
The corollary to reduced employee satisfaction is, of course, reduced customer satisfaction. If you fail to clearly describe the reasons for the acquisition and its expected impacts to your customers, your competitors will certainly do so for you. And the picture painted by your competitors will not be pretty.
In-depth planning and communications throughout involving both the acquirer and the acquire is key. If communications must be restricted prior to the deal closing--as may be the case with a public company transaction--a planned communications strategy must be put in place prior to closing the deal, and must be implemented immediate following closure.
Pre-deal due diligence must include cultural and value studies as well as financial and legal. A strategy must be in place before closing to insure that a strategic partnership of cultures and values is formed and that everyone understands the reasons for the transaction, the impact of their contributions and their roles going forward.
In many business combinations, some employees will be laid off or given new assignments. Bad news delivered quickly and effectively can be more beneficial than good news delivered late and ineffectively. It's all about establishing trust and credibility.
Thus the answer to the question posed at the beginning is: "Yes, if." Yes acquisitions can be beneficial. But they will be only if:
The acquirer has a clear strategic vision for the combined firm and a well considered integration plan;
Both the vision and the plan are shared broadly in the acquiring as well as the acquired company; and
Management rolls up its sleeves to actively lead the transition.
|
Martin Harshberger is Managing Partner of Measurable Results LLC. Marty specializes in strategic planning, pre- and post-merger integration, as well as business process improvement. He can be reached at 662-844-9088 or by email at: mailto:info@bottomlinecoach.com His new book Bottom Line Focus is available on Amazon and his website: http://www.bottomlinecoach.com/
|
Follow "The Phantom Writers" on Twitter
(@phantomwriters)
to be notified when new articles are made available.
VOTE ON THIS ARTICLE
Needs Work >>
0 -
1 -
2 -
3 -
4 -
5
<< Excellent Article
Tell our authors what you think about their article.
|
Top-Level Category: Business Offline Articles || Related Categories: Business Online Articles and Finance Articles
10 Most Recent Articles Written by Martin Harshberger
Many Fail To Plan, More Fail To Execute!
Written by: Martin Harshberger |
Distributed: 2010-02-09 |
Word Count: 744 |
Page Views: 791
| Votes: 1 |
Rating: 5.00
As the owner, CEO or senior executive of a business, you
share many things in common with the coaches of professional
sports teams. Can you imagine the head coach of a team - say
in the National Football League - going into a game without
a game plan? Of course not! That coach would soon be out of
work. Coaches literally spend hundreds hours preparing for a
60-minute event.
The A Word: Accountability
Written by: Martin Harshberger |
Distributed: 2010-02-02 |
Word Count: 578 |
Page Views: 641
| Votes: 2 |
Rating: 2.50
My 35 plus years of experience has proven that the majority
of executives simply will not or cannot do the things that
are necessary to succeed...
Obama Tells the Banks to Lend!
Written by: Martin Harshberger |
Distributed: 2010-01-26 |
Word Count: 641 |
Page Views: 727
| Votes: 2 |
Rating: 2.50
Any kind of real recovery and job creation is impossible
without access to credit by small to mid-sized businesses.
New entrepreneurs, and even experienced business people,
often ask me to help them write plans to get SBA financing
for a new or troubled venture. I tell them it just doesn't
happen that way. The SBA, USDA, and most other federal loan
programs simply guarantee bank loans. You have to get the
bank to approve your loan first. But banks are not in the
venture capital business. They want secure loans.
Strategic Planning Starts With Your Vision for Your Company
Written by: Martin Harshberger |
Distributed: 2010-01-19 |
Word Count: 834 |
Page Views: 621
| Votes: 2 |
Rating: 3.00
What role does vision play in the development of your
business plan? If you listen to Jack Welch it's a big role.
Step #1 in the planning process: Clarify and document your
vision...
Can the US Furniture Industry Compete Globally?
Written by: Martin Harshberger |
Distributed: 2010-01-14 |
Word Count: 699 |
Page Views: 862
| Votes: 1 |
Rating: 2.00
I witnessed the decline of the U.S. Steel Industry first
hand. I also participated in the rapid market shifts in the
computer and high-tech manufacturing industries. There are
many parallels with the furniture industry and those
industries. So to answer the question, can the U.S.
Furniture Industry compete globally? YES and NO!
All of Author's Articles on this site: Martin Harshberger Articles
Most Recent "Business Offline" Articles
How To Build a Strong and Powerful Business During a Recession
Written by: Trey McMartin |
Distributed: 2011-11-10 |
Word Count: 987 |
Page Views: 465
During a recession, most business owners pull the reins on
advertising budgets, fearful of what tomorrow might bring...
Those who remain fearful have forgotten what made them the
success they are today... They have forgotten that they have
a God-given talent to overcome the incredible obstacles in
their paths.
SEO Lessons from Local Businesses
Written by: Trey McMartin |
Distributed: 2011-11-09 |
Word Count: 945 |
Page Views: 869
More than once in the six years that I have been providing
SEO services for websites, I have had the opportunity to
discuss with individual business owners their search engine
optimization needs. Now and again, I run across an
individual business owner who is quick to say that SEO is
absolutely worthless. When confronted with such an absolute
statement, I like to press for details. It has been my
experience that people who speak in negative absolutes will
have a horror story to share.
Where Will FDA Target Next? What IVD Manufacturers Should Know Before Their Next FDA Audit
Written by: Norm Howe |
Distributed: 2011-09-12 |
Word Count: 706 |
Page Views: 353
Medical device manufacturers are always interested in knowing
what FDA's next area of focus will be. Well, if you're an In
Vitro Diagnostic manufacturer you might review your measurement
systems.
Online Fax - 10 Reasons To Get An Online Fax Service
Written by: Titus Hoskins |
Distributed: 2011-09-12 |
Word Count: 560 |
Page Views: 366
Online faxing is the new more modern way to fax. If you or your
company is not using an online fax service, here are 10 good
reasons why you should get it.
Best Effort Essential for the Job Interview
Written by: Barbara Wulf MS, ACC, CPCC |
Distributed: 2011-07-30 |
Word Count: 676 |
Page Views: 445
Interviewing will determine if you are the right person for the
job. These tips will help you make the job interview a success.
Go Green With Your Career Search
Written by: Barbara Wulf MS, ACC, CPCC |
Distributed: 2011-07-28 |
Word Count: 636 |
Page Views: 361
Many of the qualities of green living, like recycling and
sustainability, can apply to a career search, even if the
career is not directly associated with green industries.
ReCareer in the Second-half of Life
Written by: Barbara Wulf MS, ACC, CPCC |
Distributed: 2011-07-26 |
Word Count: 525 |
Page Views: 423
| Votes: 1 |
Rating: 3.00
Many of us worked the first half of our life to "fit" the
job description. ReCareering is about finding the right fit,
being selective, being creative, being fulfilled and being
intentional about how you spend your time.
Up in the Air
Written by: Barbara Wulf MS, ACC, CPCC |
Distributed: 2011-07-24 |
Word Count: 678 |
Page Views: 426
When looking for work or changing careers, go beyond researching
on the internet and reading articles. Find out how you can learn
from the art of listening and having a conversation.
Salon and Spa Owners: Which Monk Are You?
Written by: Dan Lok |
Distributed: 2011-07-05 |
Word Count: 477 |
Page Views: 462
Too many salon and spa owners are carrying around a lot
hurts, regrets, guilt, past failures and fears about the
future. But no one is forcing you to carry these emotional
rocks, so put that sack down!
The Single Most Profitable Day You Spend on Your Spa or Salon!
Written by: Dan Lok |
Distributed: 2011-06-30 |
Word Count: 470 |
Page Views: 567
Salon and spa owners need to combine their marketing plan
with marketing systems. A marketing calendar plans out
strategies for a year, and is instrumental to the success of
your spa or salon.
Most Viewed "Business Offline" Articles
How To Write A 300 Page Book In Four Months
Written by: Mark Silver |
Distributed: 2008-07-15 |
Word Count: 821 |
Page Views: 36740
| Votes: 6 |
Rating: 1.83
There's a lot of hoopla about becoming an author of your very
own business book. The promise of fame and fortune is very
alluring. Yet your book remains perpetually 'about to be'
written. Meanwhile your business has ground to a halt. Hmmm...
might there be a better way to get a book written?
The Best Marketing Book I've Ever Read (You'll Be Surprised)
Written by: Judy Murdoch |
Distributed: 2007-05-09 |
Word Count: 1522 |
Page Views: 33877
| Votes: 15 |
Rating: 3.60
From time to time someone asks me to recommend marketing books.
Here's one of my favorite marketing books that always surprises
people. Curious? Read on.
The Bizarre History Of The HOLLYWOOD Sign
Written by: Morris Timlen |
Distributed: 2008-11-05 |
Word Count: 1211 |
Page Views: 28586
| Votes: 22 |
Rating: 3.32
The most famous sign in the history of mankind is the one that
graces the side of the hill above Hollywood, California. As
famous a landmark as the Christ the Redeemer statue in Rio De
Janeiro, the Eiffel Tower in Paris France, the Great Pyramid of
Giza in Egypt, The Church of the Savior on Blood in Saint
Petersburg Russia, and the Statue Of Liberty in New York City,
the Hollywood sign is known around the world as the symbol of the
American movie industry.
What Does It Take To Be A Successful Salesman?
Written by: Casey Moher |
Distributed: 2008-08-05 |
Word Count: 930 |
Page Views: 16086
| Votes: 68 |
Rating: 3.16
In the course of my average workweek, I meet people who tell me
that they have no sales experience, and very literally, many
will tell me that they could not sell if their lives depended on
it. Do you fit into this mold? Do you seriously believe that you
can sell me on the idea that you cannot sell things?
Selecting Between a 401(k) And 403(b) For a Nonprofit
Written by: Daniel Lamaute |
Distributed: 2007-10-11 |
Word Count: 333 |
Page Views: 6839
| Votes: 17 |
Rating: 2.65
Newly released IRS regulations impose several new requirements
and fiduciary responsibilities on employers with 403(b) plans.
While the regulations generally don't take effect until January
1, 2009, there are some provisions that apply sooner.
Pitch A No-Hitter With Baseball-Themed Flower Gifts
Written by: Wesley Berry, AAF |
Distributed: 2007-12-25 |
Word Count: 413 |
Page Views: 6112
| Votes: 16 |
Rating: 1.94
Want to send a gift to the baseball fan in your life that's sure
to knock one out of the park? Send flowers with a baseball
theme! Everyone loves flowers and when you personalize them to
include the recipient's favorite hobbies, like baseball,
they're sure to make an even greater impression.
Never Write A 'Thank You' Letter Again
Written by: Perry Maisin |
Distributed: 2008-08-12 |
Word Count: 971 |
Page Views: 5867
| Votes: 17 |
Rating: 2.29
When I was in graduate school, I had a friend who interviewed at
fortune 500 companies and succeeded at landing a great job. One
day, I saw him sitting in the student union with a stack of
cards. The cards said 'thank you'. He opened each card and
signed his name. The inside of the card was blank. I asked him
what he was doing and he told me that it was important to send a
'thank you' to every person you interviewed with. He believed
that that was the difference between getting the job and being
passed over.
Conducting Effective Career Aspiration Discussions with Employees
Written by: Andria L. Corso |
Distributed: 2010-03-10 |
Word Count: 690 |
Page Views: 5332
| Votes: 8 |
Rating: 1.88
Enhance your talent management and development programs
through conducting career aspiration discussions with your
employees. Find out where they want to grow their career to
determine if it matches your business needs. This will
enable you to differentiate your employee development to
grow the future leaders of your company.
The Pros And Cons Of Postcard Marketing-direct marketing offline
Written by: Cheryl Miller |
Distributed: 2006-11-29 |
Word Count: 675 |
Page Views: 3998
| Votes: 5 |
Rating: 2.60
Postcard marketing is one of the oldest methods of marketing. Its
concept is simple but can be quite effective. It is just sending
out your message to your mailing list on a postcard. Postcard
marketing is a powerful and cost effective way to advertise and
will keep building in momentum when done correctly.
The Tea Room Business Plan – First Steps And Start Up Basics
Written by: Marcus Stout |
Distributed: 2007-03-22 |
Word Count: 1218 |
Page Views: 3703
| Votes: 19 |
Rating: 2.63
Every venture starts with the first steps and a business plan for
a quality tea room is no exception. Well thought out first steps,
properly implemented, will pay dividends in the business
operations of the tea room in later years.
Highest Ranked "Business Offline" Articles
Why Businesses Need Receivable Factoring In Cash Flow Management
Written by: Toby Seibert |
Distributed: 2007-08-08 |
Word Count: 866 |
Page Views: 1886
| Votes: 5 |
Rating: 4.60
In today's business environment, many businesses need to
fine-tune the process of getting paid on invoices, in order to
improve their cash on hand. Improving cash flow can be an ongoing
challenge for businesses of all sizes, and it is an issue that
must be addressed to ensure the long-term viability of the
business.
Whose Restaurant Can You Find Online?
Written by: Rudy Vener |
Distributed: 2007-07-09 |
Word Count: 640 |
Page Views: 1550
| Votes: 5 |
Rating: 4.40
What is so significant about Pizza Hut's latest TV commercial?
Business School for Non-Business Minds: Got a NAICS Number?
Written by: Melissa Mashtonio |
Distributed: 2008-04-15 |
Word Count: 423 |
Page Views: 1637
| Votes: 5 |
Rating: 4.40
I’m a journalist. I spent a lot of my career in the news
business. As my career has progressed, I’ve spent time at small
and large companies, and I have sat through dozens of business
meetings wondering what the heck the “money” people are talking
about. They used acronyms as if they were a foreign language.
The Problem With Swiping Sales Copy
Written by: Scott Bywater |
Distributed: 2009-12-03 |
Word Count: 480 |
Page Views: 1062
| Votes: 5 |
Rating: 4.40
This is what people miss when they try to simply "swipe"
sales copy from another advertisement.
Equal Opportunity Pizza Ordering
Written by: Rudy Vener |
Distributed: 2007-10-19 |
Word Count: 629 |
Page Views: 1546
| Votes: 8 |
Rating: 4.38
With online ordering, your menu and restaurant suddenly become
accessible to both the deaf and blind customers in your
community.
The Secret To Making Successful Business Connections
Written by: Kate Smalley |
Distributed: 2006-10-11 |
Word Count: 672 |
Page Views: 1660
| Votes: 6 |
Rating: 4.00
If you have a hard time making successful business connections,
don't despair. Anyone can be good at meeting people-if they use
the right technique. The whole secret to making a positive
connection is knowing how to attract people and inspire them to
want to give you a chance.
How to Build a Really Great Business? (Super Success Secrets from a Legendary Business Master)
Written by: Chet Holmes |
Distributed: 2007-01-15 |
Word Count: 1523 |
Page Views: 1647
| Votes: 7 |
Rating: 4.00
Times are tough. The economy is in a constant state of upheaval.
Is your company doing better than most? Are you placing greater
emphasis on pure performance?
Get the Balance Right
Written by: Rich Thawley |
Distributed: 2009-01-28 |
Word Count: 638 |
Page Views: 1499
| Votes: 11 |
Rating: 3.91
Do you build your business around your family or your family
around your business? The choice is yours.
Online Copywriting Makes Content as the King
Written by: Steven Gerber |
Distributed: 2006-12-11 |
Word Count: 560 |
Page Views: 1671
| Votes: 7 |
Rating: 3.86
The inverted pyramid is basically the placing of 4 W's in the
primary sentences of the articles, supported by the other W and H
on the following discussions. Four W's consist of what, when,
where, and who. The other W which stands for why on the other
hand, follows on the succeeding paragraphs, including the
elaboration for the H which also stands for how, if necessary.
Interview Coaching: A Home-Based Business on the Cutting Edge
Written by: Carole Martin |
Distributed: 2007-08-24 |
Word Count: 1400 |
Page Views: 1412
| Votes: 7 |
Rating: 3.86
You name it - Blackberry, Skype Connection, Cell Phone, iPhone -
these are the tools of this trade. Who would believe that someone
with a home-based business could reach out to someone in a far
away country and work with a client via a Blackberry and a cell
phone?
|
|
|
Article Reprint Rights
|

This work is licensed under a
Creative Commons License
You are not required to show the creative commons license notice when you reprint this work.
|
|
Article Statistics
|
Word Count: 858
Total Views: 762
Views This Month: 27
Views Last Month: 24
Article Rating: 3.00 of 5
Votes Cast: 2
Author Overall Stats:
Times Viewed Overall: 4401
Author Rating: 2.90 of 5
Votes Cast Overall: 10
More Articles By Author:
Articles On This Website
Article Title Search:
Widow Search
Right Blinker
Google
Yahoo!
Zuula
Bing
Cuil
Last Distribution Date:
2010-01-12 12:45:00
|
|
|