THE RISKINESS OF acquisitions as a vehicle for corporate renewal is reflected in both empirical studies of acquisition results and managers’ comments about their experiences. Although many factors contribute to acquisition performance, a variety of recurring patterns in the acquisition process offers clues to the disappointing results. By considering how this process affects the results, we believe managers may gain insight into ways to control negative outcomes. In addition, we hope to expand the debate about acquisitions to the domain of corporate strategy, lb achieve this end, managers must first be willing to adopt a “new” perspective—one that counters the prevailing truths to which many of them subscribe. This perspective hinges on six observations.
- Acquisitions don’t succeed... acquisitive strategies do.
- Shareholders are the least important constituency.
- Managers try to capture rather than create value.
- Strategic analysis plays only a small role in successful acquisition strategies.
- Nothing can be said or learned about acquisitions in general.
- Companies do not learn all they could from their mistakes.
Acquisitions Don’t Succeed . . . Acquisitive Strategies Do
Unfortunately many executives see acquisitions as ends in themselves, not as means to an end. We, however, view acquisitions as an alternative to other equally viable forms of corporate renewal such as internal development, joint ventures, and license agreements. All are means for the firm to secure a capability or a position important to its development and renewal... To read the complete article, login or sign-up using the form below.
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