Study note on merger

Study note on merger

References with extracted contents

Bouchikhi, H. and J.R. Kinberley. 2012."Making Mergers Work" MIT Sloan Management Review 54(1) Fall: 63-70.

"Assimilation occurs when the identity of an acquired company is deliberately dissolved into the identity of the new parent. The acquired company is stripped of its name and visual identity (logo, letterhead and so on) and adopts those of its new parent. The acquired company’s management structure is dismantled, and employees who are not let go are distributed across the parent’s organizational units. The process sends a clear signal to the members of the acquired company that they are expected to adjust and be loyal to their new employer";

"Confederation is the extreme opposite of assimilation. Here, the merged organizations preserve their historical identities and are not expected to meld in

order to create a new one. Each organization keeps its name, legal independence, management structure and autonomous decision making. Coordination in this setting is kept at the minimum level necessary to achieve synergies in particular and limited areas";

"The key difference between federalist and confederate integration lies in preserving the identities of merged organizations while at the same time developing an umbrella, or overarching, identity that each member organization can relate to, identify with and thrive within. ...... The federalist approach seeks to develop a new layer of identity and identification on top of the existing layer";

"Metamorphosis is the process by which the identities of merged companies are dissolved and fused into a completely new identity. The key benefit of this approach is the avoidance of uncertainty and anxiety among people on all sides about who are the winners and losers of the merger. Efforts by top management to establish a new identity for the combined organization is intended to create a neutral terrain. The process enables members to “forget” the identity of their original organization";

Hellerman, M. 2003. "Five Steps for Making the Merger Work" Handbook of Business Strategy 4(1), Emerald: 128-134.

"Most mergers begin with high expectations. The dealmakers expect the synergies existing between the two separate organizations to result in a new entity with a value proposition greater than the sum of the two parts. Unfortunately, all too frequently, the post-merger outcomes are significantly less attractive than the pre-merger vision";

"Post-merger cultural dysfunction typically has its origins in employees' disheartening perception that the merger generates a "winner" and a "loser." The "winner/loser" perception typically is an outgrowth of employee observations of: (1) the way the operational, technological, and financial aspects of the two organizations are merged, and (2) the way management values the employees of the merged entity";

"Companies that have been more successful at harvesting the anticipated merger synergies reject a winner/loser mind-set for people-related matters. Instead, starting with a "clean sheet," they quickly and methodically blaze a trail to get to an "ours" employee mind-set. ...";

Jap, S., A.N. Gould and A.H. Liu. 2017. "Managing mergers: Why people first can improve brand and IT consolidations" Business Horizon 60, Elsevier: 123-134.

"Junni and Sarala’s (2014) meta-analysis of merger leadership studies from 2000—2013 spotlighted best practices contributing to common organizational culture, cooperation, and successful post-merger performance. These include creating, supporting, and sustaining a shared identity in the new firm; providing caring human resource practices and job security; and maintaining open and honest communication channels to support all four distributive justice mechanisms: distributive, procedural, informational, and interactional";

Risberg, A., J. Tiernari and E. Vaara. 2003. "Making Sense of a Transnational Merger: Media Texts and the (Re)construction of Power Relations" Culture and Organization 9(2) Taylor & Francis: 127-137.

"Mergers and acquisitions are of perennial interest in organization and management studies. In addition to the traditionally dominant strategic perspective (Haspeslagh and Jemison, 1991), these dramatic organizational and industrial restructurings have been studied from human resource and cultural perspectives (Buono and Bowditch, 1989; Nahavandi and Malekzadeh, 1988). Further, as mergers and acquisitions across national borders have become increasingly popular, cross-cultural studies have also looked at transnational mergers from the perspective of national culture (Calori et al., 1994; Very et al., 1998; Lubatkin et al., 1998; Olie, 1994; Søderberg and Holden, 2002)";

Joseph, J. 2014. "Managing change after the merger: the value of pre-merger ingroup identities" Journal of Organizational Change Management 27(3) Emerald: 430-448.

"Mergers and acquisitions (M&As) continue to be a common growth activity for big businesses seeking to add successful brands to their global portfolio. Recent examples of this include Microsoft’s acquisition of Nokia and Kraft’s (now Mondel%ez) acquisition of Cadbury, where the larger conglomerate purchases the smaller company with the intent of maintaining the acquired company’s successful brand offering. In the post-merger organization, workers of the acquired company continue to operate under their pre-merger brand; however, the company which they had come to know and love is now housed under a new corporate owner";

"Achieving positive organizational identification in the post-merger company is critical for successful integration. Employees who show stronger organizational identification have exhibited less conflict, higher levels of motivation, improved job satisfaction, and organizational citizenship behaviour (Giessner et al., 2011; Van Dick et al., 2006). SIT [Social Identity Theory] research has been used to better understand these dynamics and provide strategies to help achieve post-merger organizational identification";

"SIT [Social Identity Theory] presents several concepts that frame the identification process in M&As; including, social identification, categorization, ingroup bias, intergroup discrimination, and status. Social identification is central to SIT which defines a group (or “ingroup”) as three or more people who construe or evaluate themselves in terms of shared attributes that distinguish them from other groups (Hogg, 2006). SIT states that individuals perceive these groups through social categories (Mullen et al., 1992) and strive to maintain positive identification derived largely from the association with social groups they belong to (Tajfel and Turner, 1979)";

Gugler, K., D.C. Mueller, B.B. Yurtoglu and C. Zulehner. 2003. "The effects of mergers: an international comparison" International Journal of Industrial Organization 21, Elsevier: 625-653.

"The past century saw five great merger waves—one at its beginning, and successive waves at the ends of the 1920s, 1960s, 1980s and 1990s. While much of the earlier merger activity was confined to North America and Great Britain, the most recent wave has engulfed all of the major industrial countries of the world. And, as befits a global economy, it has been composed of an increasing percentage of cross-border acquisitions";

"Of the three types of mergers, increases in market power are perhaps most likely to follow horizontal mergers, but are also possible with vertical and conglomerate mergers. Conglomerate mergers can increase the degree of multimarket contact between the merging firms and their rivals. High multimarket contact raises the costs of cutting price in any given market and thus can facilitate more cooperative behavior thereby effectively increasing the merging firm’s market power. A vertical merger can also increase multimarket contact, if the merging companies’ rivals are also vertically integrated";