Integration Flashcards
1
Q
Integration (1)
A
- combining original socio-technical system of mergers asset or organization for newly combined system
2
Q
Co-existence (1)
A
- operates independently, only integrates financial reports
3
Q
Absorption (1)
A
- larger company acquire smaller target
4
Q
Synthesis (1)
A
- marriage of equals, horizontal and vertical
5
Q
Importance of integration (2)
A
- high risk
- synergies assumption and valuation
6
Q
When and how to integrate (3)
A
- ability of organization to tolerate change while remaining productive
- level of cultural and operational similarity between organization
- signal sent to competitors, customers, and investors
7
Q
What to integrate: source of value synergies (3)
A
- risk reduction
- revenue enhancement
- cost saving
8
Q
Value realization (3)
A
- planning: evaluate goals, identify synergies
- implementation: dedicated team, and report directly to senior
- transition to ongoing operations: learning experience, and document process for future
9
Q
Effect M&A integration: focus on people/culture (4)
A
- psychological engagement
- require change and adjustment
- made up of different systems
- identity, culture and employee buy in
10
Q
Change management for merger integration (4)
A
- identity and achieving psychological synergies
- operational synergies
- share service price harmonization
- IT infrastructure harmonization
11
Q
Method to achieving psychological synergies required to realize economic synergies (4)
A
- assimilation: identity of acquired company is dissolved into identity of new parent
- federation: merge organization preserve historical identities as well as overarching identities of each organization related to, identify with, and thrive
- confederation: merge organization preserve historical identities and are not expected to mend to create a new one
- metamorphosis: identity of merge companies dissolved and fuse to create a completely new identity
12
Q
Integration key success factor (6)
A
- leadership
- retention
- communication
- one time opportunity
- synergy focus
- timing
13
Q
Ways integration effort are managed: too little (3)
A
- danger: deal making is cool, high profile
- illusion: good deal guarantee successful merge
- temptation limits transition effort to day 1
14
Q
Ways integration effort are managed: too late (4)
A
- deal maker interest after closing
- time, money, energy burnt out
- event race ahead and out of control
- vision, planning, organization does not start until deal is closed
15
Q
Ways integration effort are managed: just right (4)
A
- receive adequate resources
- transition teams are ready to go from day 1
- transition efforts are taken seriously
- transition planning is an integral part of transactions due diligence
