Turorial 9: Antecedents Of MA Success

Question 1

Take mode

Answer 1

The seller can elevate price.

The buyer doesn’t understand its new market => failure

Question 2

Give mode

Answer 2

1- be a smarter provider of growth capital (scope and scale economies)
2- provide better managerial oversight
3- transfer valuable skills (redeployment of personnel)
4- share valuable capabilities (rather than transfer)

Question 3

How to success with culture in MA

Answer 3

• really understand the cultures of the two organisations
• take the time to do it right (manage human side)
• leverage transparency to keep people engaged
• bring people together for a purposeful dialogue
• celebrate success and failures
• care about learning and development (for employees)
• ensure leaders are prepared to coach teams
• build connections between people

Question 4

Culture challenges

Answer 4

• no dollar value

CEOs don’t know how to mission their people to change their culture

Question 5

Culture

Answer 5

Is the purpose , the set of values and the behaviours that are shared by a group of people that define how things get donne in an organisation.

Question 6

Critical steps to integrate cultures after a merger

Answer 6

1- ceo decide the culture agenda
2- diagnose the differences
3- explicitly define the future culture
4- activate the new culture and embed it in the system and in the organisation

Question 7

Pre and post merger issues

Answer 7

Pre: complementarity and cultural fit
Post: degree and speed of integration

Question 8

Literature streams

Answer 8

• the financial economic school (stock)
• the strategic management school (relatedness, Similarity, complementarity)
• the organisation behaviour school (culture and people)
• the process school

Question 9

Complementarity

Answer 9

Different characteristics that are independent and mutually supportive.

The greater the complementarity the greater the M&A success, cultural fit the speed and degree of integration

Question 10

Cultural fit

Answer 10

The greater the ft the greater the MA success, speed and degree of integration.

Question 11

Degree of integration

Answer 11

The greater the degree the greater the MA performance
-> positive effect on synergy and potential realisation vs. More change and coordination costs => better ressource redeployment and exploitation

The greater the degree the lower the speed
-> enormous changes (result asap)

Question 12

Speed of integration

Answer 12

The greater the speed the greater the success

• > less uncertainty, resistance
• > fasted synergy and potential realisation

Question 13

Fast speed

Answer 13

• fast exploitation of synergies
• fast ROI
• reduced uncertainty among employers
• minimise time spent in a suboptimal position
• take advantage of the momentum in the direct aftermath of the deal

Question 14

Slow speed

Answer 14

• minimise conflict
• enhance trust between partners
• reduced disruption of existing resources and processes

Question 15

+/- of cultural fit

Answer 15

+ lower demand for formal integration

• this effect decreases with an increase in the relative size of the target
• informal coordination cannot guarantee the desired integration and the proposed synergy realisation