An Excerpt from "The Employee Handbook for Navigating Mergers and Acquisitions"
by Mitchell Lee Marks
Editor’s Note: Several factors figure into the eventual success or failure of mergers and acquisitions—including the depth of due diligence, the financial details of the transaction, the process through which integration decisions are made and implemented, and even the timing of the deal. Our personal experience—and what we consistently hear from our seminar attendees—also points to the human and cultural dynamics impacting the achievement of a deal’s financial and strategic goals. That’s why we recently published “The Employee Handbook for Navigating Mergers and Acquisitions.”
Beginning with this issue of the “M&A Monthly,” we are proud to present brief excerpts from the handbook. Learn more details about the book HERE. Request your FREE copy, learn more about pricing, or place your order through the M&A Leadership Council; please call our offices at 214-689-3800.
Why Companies Merge or Acquire
Each year there are thousands of mergers and acquisitions, involving millions of employees and billions of dollars. The concept is simple: combine the strengths of two organizations to achieve strategic and financial objectives that neither side can accomplish as easily or affordably on its own. The reality, however, is much more difficult: mergers are hard to do and they require everyone’s participation…..everyone’s. Successful combinations can transform organizations and accelerate them toward their desired results much more quickly than if a company acted on its own. This can mean higher employment, more stature in the marketplace and, in some cases, survival itself.
Many motives prompt companies to acquire or merge with another organization. Perhaps a combination can help a company to extend its product lines, adopt an emerging technology, or gain a toehold in a new market where it is too costly or risky to do so on its own. Other times, a competitor can be purchased to gain competitive advantage. Still other times, M&A can be a defensive move to protect market share in a maturing or consolidating industry—or to avoid being swallowed up by another company.
The overarching reason for combining with another organization is that the union promotes the achievement of strategic goals more quickly and with less risk than if a company tries to do it all itself. In this era of intense and turbulent change, when market niches open up quickly and whole industries transform on a global scale, combinations also enable two organizations to gain flexibility, leverage their knowledge, share resources, or create global reach.
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About the Author: Mitchell Lee Marks is Professor of Leadership at the College of Business at San Francisco State University and leads the change management consulting firm JoiningForces.org. Over the past 25 years, he has been involved in over 100 mergers and acquisitions as a researcher or advisor. He is the author of seven books on organizational change—most recently the second edition of “Joining Forces: Making One Plus One Equal Three in Mergers, Acquisitions and Alliances”—and has published articles in the Harvard Business Review, MIT Sloan Management Review and other prominent practitioner and scholarly journals. Dr. Marks is a member of the Advisory Board of the M&A Leadership Council. He can be reached at [email protected]