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Mitchell Lee Marks: San Francisco, California, USA
Mergers and acquisitions are frequent events in organizations today. Despite their popularity, fewer than 20 per cent of corporate combinations achieve their desired financial or strategic objectives (Davidson, 1991; Elsass and Veiga, 1994; Lubatkin, 1983). Many factors account for this disappointing track record - paying the wrong price, buying for the wrong reason, selecting the wrong partner or buying at the wrong time. Another reason, however, contributes to the high failure rate, managing the post-merger integration process appropriately.
This article reviews the human, organizational and cultural dynamics that influence the post-merger integration process. It reports recent trends in merger and acquisition activity that affect the selection and application of interventions to enhance combination success. The article then describes consulting approaches and methods required to minimize employee stress, management crisis and culture clash and to achieve the desired financial and strategic results of mergers and acquisitions.
The merger syndrome
Organizational researcher and consultant Philip Mirvis and I have studied the post-merger integration process in more than 50 organizational combinations over the past 15 years (Marks and Mirvis, 1997; Mirvis and Marks, 1992). These mergers and acquisitions span all industry groups, involve organizations of all sizes, cover both friendly and hostile deals and cross national borders. We find in the vast majority of mergers and acquisitions a set of norms that interfere with executives' ability to achieve the combination's hoped-for synergies and financial gains:
- underestimating the multitude of integration issues and problems that arise as organizations come together;
- underestimating the drain on resources and the distraction from performance required to manage the transition from pre- to post-merger status; and
- underestimating the pervasiveness and depth of the human issues triggered in a merger or acquisition.
We have found the "merger syndrome" to be a primary cause of the disappointing outcomes of otherwise seemingly well-conceived mergers and acquisitions (Marks and Mirvis, 1985). The merger syndrome encompasses executives' stressful reactions, the development of crisis-management orientations, and the clash of cultures in combining organizations. It is triggered by the often unavoidably unsettled conditions in the earliest days and months of a combination. The bottom line, if the syndrome is allowed to go unchecked, can be marred performance and poor financial and...