merger and acquisition

Topics: Mergers and acquisitions, Due diligence, Merger integration Pages: 41 (5926 words) Published: November 2, 2014
Merge Ahead: A Research Agenda to Increase Merger and Acquisition Success

Mitchell Lee Marks • Philip H. Mirvis

Published online: 30 April 2011

� Springer Science+Business Media, LLC 2011

Abstract Scholars have been conducting serious research

on the human, organizational, and cultural aspects of

mergers and acquisitions (M&A) for 30 years. Yet, over

this period, there have only been modest improvements in

the M&A success rate. In this article, we examine corpo-

rate combinations, describe how human factors contribute

to their failure or success, and identify key research

questions whose answers can help to improve the M&A

success rate in both financial and human terms. We propose

research questions for the key phases of a deal, including

buying a company and putting companies together. And,

reflecting an emerging trend among some frequent

acquirers to build an internal competence in M&A execu-

tion, we also propose research questions for how to

accelerate the process of learning from past combinations

to better manage future ones.

Keywords Merger � Acquisition � Combination � Integration � M&A � Transition � Culture clash � Transition teams � Cross-border

Scholars have been conducting serious research on the

human, organizational, and cultural aspects of mergers and

acquisitions (M&A) for 30 years.1 Yet, over this period,

there have only been modest improvements in the M&A

success rate (Schoenberg 2006). In this article, we examine

corporate combinations, describe how human factors con-

tribute to their failure or success, and identify key research

questions whose answers can help to improve the M&A

success rate in both financial and human terms. We use our

experience as both researchers and advisors in over 100

combinations-as well as our awareness of the scholarly

literature and the work of other practitioners-to highlight

the factors which matter most in eventual M&A success.

Mergers and Acquisitions

Many motives prompt executives to acquire or merge with

another organization. In some cases, a combination helps a

firm move quickly into a new market or product space or

pursue a strategy that would otherwise be too costly, risky,

or technologically advanced to achieve on its own. Other

times, deals are opportunistic, such as when a troubled

competitor seeks a savior or when a bidding war ensues

after a firm is ''put into play.'' Still other times, acquisitions

or mergers can be defensive moves to protect market share

in a declining or consolidating industry. The overarching

reason for combining with another organization is that the

union will enable a firm to attain strategic goals more

quickly and inexpensively than acting on its own (Has-

peslagh and Jamison 1991).

Despite their popularity, most mergers and acquisitions

are financial failures and produce undesirable conse-

quences for the people and companies involved. While M. L. Marks (&) Department of Management, San Francisco State University,

1600 Holloway Avenue, San Francisco, CA 94132, USA

e-mail: marks@sfsu.edu

P. H. Mirvis

Center for Corporate Citizenship, Boston College,

Chestnut Hill, MA, USA

1 While the terms ''merger'' and ''acquisition'' tend to be used

interchangeably by both practitioners and scholars, here merger is

intended to mean the integration of two relatively equal entities into a

new organization and acquisition is intended to mean the takeover of

a target organization by a lead entity. The word ''combination'' is

used here in reference to either a merger or an acquisition.

123

J Bus Psychol (2011) 26:161-168

DOI 10.1007/s10869-011-9219-4

target-firm shareholders generally enjoy positive short-term

returns, investors in bidding firms frequently experience

share price...

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