College of Business {College of Business}

Image: Photos of SF State students

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

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

12/17/2010

Preparing to Merge

Cover of Mitchell Mark's book "Joining Forces"

After examining 30 years of mergers and acquisitions, Associate Professor
of Management Mitchell Marks has found that careful attention to corporate
culture ensures the financial success of business marriages.

"It does not matter whether the combining cultures are similar or different,
but how those similarities and differences are managed" says Marks, who has
advised Motorola, Hewlett Packard and Bank of America on mergers and acquisitions.
"You can combine companies with strikingly different cultures, so long as you
acknowledge and manage the differences rather than deny or ignore them."

According to the second edition of his book, Joining Forces: Making One Plus
One Equal Three in Mergers, Acquisitions and Alliances
(Jossey Bass, ’10),
minute aspects of corporate culture—Mac or PC, dress shoes versus sandals,
and compensation packages—can cause tension in a merger. "Little things such as meeting start times can mushroom into bigger issues," Marks says.

As the recession eases its grip and companies look to merge and expand, Marks
says 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? There will be huge deals as executives become more confident the economy
is improving," Marks says.

Marks expects foreign companies to become players in the expanding market,
with companies in China and India among the busiest buyers. Companies such
as Cisco that emphasize cultural learning have had more success than those
who try to dominate the other company, he says. "You acknowledge the differences;
you educate people on it. Companies that did deep cultural learning had better
results."


Share this story:

SF State Home