Competitive Intelligence

Tactical, Operational & Strategic Analysis of Markets, Competitors & Industries

Mergers & Acquisitions presents CORPORATE RISKS which has to be mitigated.

Success of merger / acquisition depends how we have actually prepared at:

1. Pre Merger stage
2. Post Merger stage

Pre Merger stage:

Here compatibility issues need to be addressed under :

A.Courtship phase
B. Evaluation and Negotiation phase

While we are looking at compatibility issues at during Courtship phase, have we looked at compatibility between the vision and objectives, have we been able to build and reinforce personal and business relationships.

Once we find a common ground ie we have compatibility ie we share vision and objectives that we may like to proceed to Evaluation phase and Negotiation stage where we need to undertake due diligence and evaluate the cost/benefit of the merger/acquisition besides understanding the regulatory clearancesrequired for the new project.

Once the Merger/ acquisition has taken place , we may like to look at Issues which need to be addressed under:

A. Immediate Transition phase
B. Transition phase

Immediately after the merger / acquisition, Issues such as New appointments need to be made, list of Redundancy announcements need to be made, Restructuring of the various departments need to be done to make the organisation an agile corporation and Divestment needs to be considered based on BCG matrix.

In Transition phase, we need to Fine Tune the organisation further to enable the organisation to remain lean and agile.

Further re-structuring and job transfer need to be done to get the right fit.

We cannot ignore Cross-Cultural differences which are the Nemesis of many a mergers.

cited by:

Advisor, Corporate Risks

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Comment by Vivekk Raghuvanshi on November 14, 2009 at 2:48am
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Why mergers acutally fail is because of a clash of corporate cultures

Have we addressed the cultural incompatibilities
Was cultural due diligence done correctly
Did we undertake cultural audit
Did we create Knowledge maps

And when we fail to predict the dissonance which will arise in Corporate Matchmaking because of the dissonance in organisation structures, problems will arise.
Comment by Vivekk Raghuvanshi on November 14, 2009 at 2:41am
Dissonance in Beliefs, Values, Norms and Behavior is the main reason why mergers fail.
Comment by Vivekk Raghuvanshi on November 14, 2009 at 2:22am
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Further, were similarities and differences assessed, do organisations have mutual respect for each other, do they acknowledge professional and individual competence, business capability etc.

Is there a dissonance between hopes & expectations, vision statements, mission statements etc.,

What synergies exist

Is there trust in discussing difficult issues and handling conflict

Is there commitment by both parties to succeed, 99% mergers fail because all you did was financial due diligence. Have you looked at the dissonance between vision and strategic objectives and goals of both companies.

Further the External environment is Quicksilver

To handle mulitple Quicksilver environments , this is why we require OODA loop and Competitive Intelligence

Further, were similarities
Comment by Vivekk Raghuvanshi on November 14, 2009 at 2:11am
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It all depends, who has done the Due Diligence

Like Ayn Rand said:

Thinking is man’s only basic virtue, from which all the others proceed. And his basic vice, the source of all his evils, is that nameless act which all of you practice, but struggle never to admit: the act of blanking out, the willful suspension of one’s consciousness, the refusal to think—not blindness, but the refusal to see; not ignorance, but the refusal to know. It is the act of unfocusing your mind and inducing an inner fog to escape the responsibility of judgment—on the unstated premise that a thing will not exist if only you refuse to identify it, that A will not be A so long as you do not pronounce the verdict “It is.” Non-thinking is an act of annihilation, a wish to negate existence, an attempt to wipe out reality. But existence exists; reality is not to be wiped out, it will merely wipe out the wiper. By refusing to say “It is,” you are refusing to say “I am.” By suspending your judgment, you are negating your person. When a man declares: “Who am I to know?” he is declaring: “Who am I to live?”
Comment by abhishek on November 12, 2009 at 11:14pm
Sir trully said. Companies these days are highly skeptical before going for mergers and they do necessary and discrete due diligence checks to back their decision for going for or against mergers and acquisitions.Despite that most of the mergers fails. Please clarify this issue. Don't you think the company has wasted all the money, time and efforts which they put in for initial checks

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