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Unlocking the successes of mergers and acquisitions

News + Events : Unlocking the successes of mergers and acquisitions

10/14/2010

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

A photo of Associate Professor of Management Mitchell Marks.

Associate Professor of Management Mitchell Marks.

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 acquisitions achieved their
financial objectives. Marks found that the process through which the
companies were integrated -- navigating differences and similarities in
corporate culture -- had the most impact on financial success.

"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 Google 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 cultural differences 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 company.

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

Marks is an expert on mergers and acquisitions and has advised
companies on more than 100 mergers and acquisitions during his career,
including firms as diverse as Motorolla, Hewlett Packard and Bank of
America. He 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.

-- Michael Bruntz


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