Even during the credit crunch of the past 12 months, hardly a day has passed without the media hailing a major merger or acquisition (M&A1) event. In 2008, Microsoft has been chasing Yahoo! in an on-again off-again manner, Delta and Northwest are in the midst of executing a complicated merger integration effort, United Technologies is targeting Diebold and more. Yet numerous studies show that most mergers fall short of creating significant shareholder value. A Bain & Co. survey of 250 global executives involved in mergers and acquisitions indicated that only three in 10 created meaningful value for shareholders and that poor integration was behind two of the top four reasons for failed corporate unions.2
Why does the newly combined company so often fail to deliver on the promise of the original business case for a merger? Our research suggests the most fundamental failing involves the inability of the post-M&A top management team to quickly establish and then maintain productive working relationships, leaving it poorly positioned to lead. In a post-M&A company, many of the preconditions for team success are absent. Mutual trust, shared vision and roles that are clearly articulated, understood and accepted require time to develop. Unfortunately, stakeholders want to see results and expect top team performance almost from the day the M&A agreement is signed.
Executives who participated as... To read the complete article, login or sign-up using the form below.
Subscribe today to read this article.
Buy this article. Purchase one or more copies of this article in PDF form.
Subscribe today to read the most recent articles and the current issue of MIT Sloan Management Review.
Become a premium subscriber today to read this article and the entire archive of MIT SMR articles.
Sign in if you have registered already for the website
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
