Search results

This study aims to test the authors’ theory that in an integrated sales team, the larger team (either from the acquiring or acquired firm) dominates the smaller team, even though it may be less competent than the smaller one, and that the level of competence of the integrated entity with the dominant but inferior larger team is bound to deteriorate.

The study tests the theory by conducting a laboratory experiment.

The results from the experiment show that an asymmetrical employee composition structure creates merger dominance in the post-integration group and influences the integration performance.

Considering the lack of mergers and acquisitions research in the marketing literature, the author believes that this study contributes new information to the literature. The finding that an integrated entity with a dominant but inferior larger partner will demonstrate a resulting degeneration of competence invites empirical research for validation.

The integration of sales teams is central to ensuring revenue growth and driving the value that mergers promise but often fail to realize. The study findings provide some practical insights in this regard.

Mergers between asymmetrical partners are common phenomena. However, few studies have investigated how an unequal size of sales teams in pre-merger firms influences the effective integration of different sales teams. To fill this research gap, this study examines whether the involvement of an unequal number of salespeople from pre-merger firms in a post-merger sales team may influence its post-merger performance.

This study aims to confirm earlier findings that differences between merger and acquisition (M&A) participant firms are a hurdle for successful mergers and shows that merger outcomes can also be affected by the post-merger integration duration (PMID).

Experimental research on distinct cultures developed within experimental pre-merger subject groups is used to compare pre- and post-integration performances.

This study finds that firm distance (i.e. inherent differences between pre-merger firms) negatively influences merger success; no significant relationship between firm distance and PMID exists and PMID is positively related to merger success. Specifically, a slower integration minimizes conflicts between merger partners, enhances trust-building and reduces the disruption of existing resources and processes in both firms, which may benefit M&As. By contrast, a fast integration that shortens the overall integration process may discourage the combined entity from recognizing the intended synergy quickly.

The new finding that PMID can affect merger outcomes invites empirical validation. This study presents experimental evidence that prolonged, well-structured post-merger integration may compensate for the negative time-variant issues associated with PMID.

Organizational support for collaborative learning between professional members should be a strategic consideration for firms so that acquiring business capabilities can be more natural and cost-efficient than building internal capabilities despite possibly slowing down the integration process. Encouraging a transfer of technical and client knowledge between the combined members can create value and understand differences in both the form and content of each firm’s knowledge base and the pre-existing mechanisms for sharing knowledge. It may lower the level of resistance in knowledge transfer.

While M&As may better facilitate the cost-effective expansion of business offerings than building capabilities internally, they can require considerable time, preventing many firms from realizing their intended outcomes. Nevertheless, less attention has been focused on PMID and its influence on M&As. This study is the first to use experimental research to examine the effects of PMID on merger success.

This article intends to provide guidance to HR professionals and others involved in the planning and implementation of post‐merger integrations. It seeks to argue that successful integration requires an “art and science” based approach to organizational change, and to illustrate the importance of this approach by drawing on a case study project from the financial services sector.

Using a case study approach, the article describes key learnings from a financial services sector post‐merger integration project in which the author was directly involved. The problems and challenges that arose in the case study organization are described, and it is shown how these were addressed using the “Art and Science of Transformation”^TM conceptual approach to achieve a successful integration.

In the case study project, a lack of detailed integration plans and the absence of integration performance metrics, as well as inadequate understanding of the likely impact of cultural incompatibilities, were identified as representing risks to successful merger. To mitigate these risks, an art‐ and science‐based approach was implemented. This included the development of an integration performance measurement system and a communications strategy, while a phased approach was taken to the integration. Use of the art and science approach to post‐merger integration helped contribute to a financially and operationally successful merger, despite the early risks and the contrasting corporate cultures involved.

The article is based on a single case study from the Canadian financial services sector, and is written from the perspective of the author, who worked on this project as an external consultant. The specific types of problems and challenges relating to post‐merger integration will vary between organizations and sectors, but the examples discussed in this article are believed to be typical, and of value in demonstrating the importance of an art and science approach to post‐merger integration.

Post‐merger integration represents just one form of organizational change, and the “Art and Science of Transformation” approach is equally relevant and valuable to other types of projects. The evidence from previous research is that a high percentage of organizational transformations fail to meet their objectives or are abandoned before completion, with project failures most often due to a lack of attention to people‐related factors. By adopting the approach discussed in this article, organizations can help to reduce the risk of failure by achieving a good balance between the art and the science of change.

Unsuccessful organizational change initiatives are wasteful of financial and human capital resources, and may result in demoralized employees – especially if they feel that their experience and skills are not being effectively utilized in the change initiative. The Art and Science of Transformation approach helps ensure that organizational change initiatives build efficiently and effectively on available human and other organizational resources to achieve positive outcomes.

The Art and Science of Transformation framework was developed by Schroeder & Schroeder Inc. on the basis of its experience of helping organizations achieve successful change. Although other studies have examined the factors associated with successful post‐merger integration using a case study approach, the application of this framework to the post‐merger integration context is unique.

The purpose of this paper is to examine the effects of the post-merger integration duration on acquiring firms’ leverage behavior before and after a merger, using a dynamic model in which full merger benefits cannot be consumed at the instant of a merger, but rather after a pre-specified post-merger integration period.

This paper presents a dynamic model and empirical tests that describe the impact of the post-merger integration period on the capital structure dynamics of the acquiring and target firms before a merger and during the post-merger integration period. By incorporating costs associated with the post-merger integration period, the model can provide new implications for the leverage behavior around the merger.

The model generates new implications related to acquiring firms’ leverage dynamics along with method of payment choice. Specifically, the model indicates that the post-merger integration duration is negatively associated with the market leverage of newly-merged firms at the time of merger completion and during the integration period. Further, acquirer managers are more likely to use equity to finance a merger when the integration duration is likely to be lengthy.

This is the first model in the literature that assumes that both the acquiring and the target firms can change their capital structure overtime, which allows us to analyze both the financing structure and the merger timing. Previous empirical studies also ignore the integration period in the analysis of the method of payment choice and leverage behavior around mergers. In the tests reported in this paper, the authors control for the factors mentioned above and demonstrate that the expected integration duration is not subsumed by those variables implying that it has its own power in explaining the choice of leverage and merger financing method.

A review of extant literatures shows that most mergers fail during the integration process. Little is known about how the realization of operating synergies and dissemination of available know-how in the merged firm are managed in the post-merger phase. The purpose of this paper is to provide insights on the process of integrating operating synergies by focusing on the critical success factors that facilitate integration of the skills of merged banks.

The authors draw on three research traditions in merger literature and reconcile them with three dimensions of integration. In-depth interviews were conducted with Nordea managers from four Nordic countries.

Having learned from the mistakes of previous mergers, Nordea’s “guiding star” for managing its post-merger integration process was expressed as focus, speed and performance from top management. A hands-on leadership style, vision-led thinking, a bias for action, involvement of the entire staff, continuous focus on customers, open and honest communication with employees are critical to success.

The motive for a merger has an important impact on the degree of interaction and degree of integration. The authors expand on previous findings by, among other things, synthesizing three theoretical lenses into an integrative model, and addresses post-merger issues with a sharp eye towards clear managerial relevance.

The authors respond to the call to expand inter-firm relationships study beyond the narrow dyadic relationship focus and not solely conceptualize mergers as one of companies’ entry modes to implement mechanistic growth strategy. The three dimensions of integration imbued with three research traditions in merger literature provides us with a conceptual lens to conceive mergers also as engines for change emerging from the merged firms to enhance a bespoke performance of their business process.

The purpose of this paper is to examine the role that pre-merger identification plays within a post-merger setting. Social Identity Theory (SIT) has conflicting reports on the role that pre-merger identification plays in post-merger integration. The current research explores a case study where enhancing pre-merger identification resulted in positive post-merger identification and intergroup relations; progressing knowledge in the field by analysing the contextual factors that facilitate this outcome.

The research follows a case study design applying integration method for the study of changes over time. Two sets of in-depth semi-structured interviews underwent content analysis to derive thematic findings. Case detail was also provided to frame the results.

Findings of the research showed that the integration strategy used to facilitate pre-merger ingroup identification reduced the perceived status differences between groups, moderately improved ingroup relations, and significantly improved intergroup relations.

For strategic planners involved in managing change during a merger, the findings provide an alternative integration strategy to be used within a joint-brand structure. The research also provides several analysis points that managers can use to design appropriate integration strategies.

The findings are important for the application of SIT to mergers and acquisitions, which commonly view pre-merger identification as a barrier to integration. The current study outlines the contextual factors which strengthen the relationship between pre-merger identity and post-merger identification.

The purpose of this paper is to examine the effects of the post-merger integration duration on acquiring firms’ leverage behavior before and after a merger, using a dynamic model in which full merger benefits cannot be consumed at the instant of a merger, but rather after a pre-specified post-merger integration period.

This paper presents a dynamic model and empirical tests that describe the impact of the post-merger integration period on the capital structure dynamics of the acquiring and target firms prior to a merger and during the post-merger integration period. By incorporating costs associated with the post-merger integration period, the model can provide new implications for the leverage behavior around the merger.

Empirical tests support the model implications by showing that the longer the expected post-merger integration process, the less likely the acquirer will structure the financing of the combined firm in a manner that increases firm leverage. Since integration takes time to complete, an acquirer tends to retain financial flexibility during the integration process by assuming lower levels of debt when determining the capital structure of the merged entity.

The model generates new implications related to acquiring firms’ leverage dynamics along with the method of payment choice. The analysis of the duration of the post-merger integration period extends both the theoretical and empirical literature that tacitly assumes that the merger-related synergy is realized immediately at the merger date. This is the first model in the literature that assumes that both the acquiring and the target firms can change their capital structure overtime, which allows us to analyze both the financing structure and the merger timing. Previous empirical studies also ignore the integration period in the analysis of the method of payment choice and leverage behavior around mergers. The model in this paper can be extended along a number of dimensions.

To illustrate the importance of speeded up merger integration process that creates value part of the M&A lifecycle.

This paper relies on recent case studies, client work and a survey.

Mergers that create maximum value treat the transaction as a complete lifecycle – beginning with pre‐deal strategy, progressing through deal execution and continuing with post‐merger integration. Most successful merger and acquisition (M&A) transactions are characterized by the superior execution of an explicit value‐capture strategy, which we call the “life‐cycle approach.” To achieve this, top managements in the most successful transactions have relied on four key principles: treat M&A as a holistic process; focus on value creation, not just integration; accelerate merger planning and execution; and use culture as a value‐creation tool.

Companies which already have an in‐built M&A capability, will adopt new best practices in merger integration that treat post‐merger integration earlier in the M&A process.

For companies who have an active M&A growth strategy, a speeded up merger integration allows for the early capture of M&A deal value.

The contribution revisits existing research on human impacts on the performance of mergers and acquisitions. Findings are grouped into three categories: individual-, organizational- and managerial-related factors. Results show that while research seems various and abounding, influential factors are often studied as static setting approached in isolation, without measuring their direct relation to post-acquisition outcomes.

In mergers and acquisitions (M&As) the culture of the acquired organization often represents a counterculture for the acquiring firm. The purpose of this paper is to present a case study of an acquisition of German FAST by the Israeli firm Aladdin, and exemplifies the post‐merger integration issues that arose as a result of the culture clash between amalgamating entities in the high‐tech industry.

The study used a qualitative research design because of the need for in‐depth understanding of the processes, local contextualization, causal inference, and the necessity to expose the points of view of the participants. Triangulation was one of the important means of increasing construct validity and substantiating findings and propositions.

The case study analysis covers the processes that affect M&A performance and elucidates a significance of the post‐merger integration approach that is implemented in cross‐border M&As.

The examination sheds light on the pre‐ and post‐merger processes and provides new insights into both.

The case study describes two international high‐tech companies before their merger, the negotiation process, and the post‐merger integration approach adopted by the acquiring firm. The study extends the existing limited knowledge about integration approach in implementation of international high‐tech mergers.