How Culture Affects Mergers and Acquisitions
[pic]
Team Dynamics and Cultural Due Diligence
A Checklist in the Context of Mergers and Acquisitions and Management Buyouts
Cultural Due Diligence Checklist in Mergers and Acquisitions (M&A) and Management Buyouts (MBO)
A Harvard Business School study showed that firms that "actively managed" their corporate cultures realised a 682 percent increase in revenue compared with a 166 percent increase for firms that did not manage corporate culture.
Eighty five percent of failed acquisitions are attributable to mismanagement of cultural issues.
|Team and Group Dynamics |Moving from “I” to “we.” |
| | |
|Team and group dynamics are influenced by: |Check self-awareness within teams. The more self-awareness |
| |each team member has, the more actively he or she can |
|The larger context in which the team operates, |contribute. |
|The organisation, | |
|The team identity itself, |Check interrelations. The more each team member knows about |
|The mix of individuals within the team. |the other team members, the better she or he can tap into the |
| |talents and experiences of others for better team performance.|
|This team identity stems from: |
|
| | |
|The interrelationship of the larger culture, |Check communication and personality links. This essentially |
|The organisational culture, |involves the key aspects of relationships and communication. |
|The team configuration, |Personality differences show up in how we tend to communicate |
|The nature of the work (purpose), |as well as how we like to be communicated with. |
|The qualities of the individuals. | |
| |Check for common goal management. Take the time, at the |
| |outset, to discuss what the goals, mission, or tasks of the |
| |team are so they are all on the same page. |
| | |
| |Check personality and production links. People of different |
| |personality types will have different preferred approaches and|
| |understanding this can really optimise the performance of the |
| |team. |
| | |
| |Check performance measures. Finally, each team must have some |
| |measure of how they are doing. People of different personality|
| |types will have different perspectives on what constitutes |
| |good and adequate measurement. |
|Clarifying culture |The type and level of participation in decision-making. |
| |The level, speed and process of decision-making. |
|Compare and contrast customer/supplier treatment. |The level of formality and controls. |
|Assessing the culture |What is the corporate history? |
| |How far is the company removed from its founder? |
|It is critical to understand and assess the current culture of|How skilled is the organisation at change? |
|both companies involved. |How well does the organisation adapt to and adopt new |
| |processes? |
|The answers to the following questions will help to create a |When was the last time the company was involved in M&A |
|cultural valuation, and provide information around the wider |activity and what lessons were learned? |
|factors impacting the dynamics of teams in MBO and M&A |What is the company's management style: centralised or |
|contexts. |decentralised? Entrepreneurial, authoritative, or management |
| |by objective? |
| |What is the culture of the competitors? |
| |How effectively does each serve the market? |
| |What is the reason for the success of the company: exceptional|
| |management, marketing prowess, industry growth, new product |
| |innovations, etc.? |
| |What is the work environment of the company: laid back and |
| |casual or high energy? |
| |Are organisational structures and controls responsive to the |
| |company's customers, partners, employees, and suppliers? |
| |What is the policy toward budgetary control: lax, adequate, or|
| |stifling? |
| |What are the standards of performance? |
| |Is there a plan to grow the talent pool? That is, are there |
| |programmes in place to attract, retain, and train good people?|
| |Are there effective processes, policies, and procedures in |
| |place? |
| |Who sets the policies? |
| |What drives new process development? |
| |Are authority and responsibility of functions and personnel |
| |defined and understood? |
| |Has there been any drastic change in management approach? If |
| |so, have employees adapted? |
|More specifically, attention must also be paid to the |Management approach. |
|following issues during the due diligence process. |Budget and projections conventions and strategies for |
| |long-range planning. |
|These, and the balance among these factors, will also help |Management reports and reporting procedures |
|define and assess the culture of an organisation. |Organisational and human resource structures |
| |Procurement processes |
| |Research and development infrastructure |
|Understanding Values |For example, what does the mission statement say about the |
| |organisation and its goals? |
|In every organisation/team, there are human, physical, and | |
|information systems that act as filters for values, through |What values are manifest in strategic statements dealing with |
|which strategic product, market, and capability action plans |future markets, future products, capabilities, and financial |
|are implemented. |expectations? |
| | |
|Examining these systems can provide great insight into the |What does the annual report emphasize? |
|value of the organisation/team. | |
| |For example, in M&A/MBO situations, take a close look at how |
|They include: |each company interfaces with its customers. |
| | |
|Job functions and performance reviews: objectives, standards, |Do employees maintain an external focus, linking all |
|and accomplishments. |activities and efforts to delighting the customer and helping |
|General systems: management information, human resources, and |increase shareholder value? |
|customer records. |Does the company value speed and agility in the marketplace? |
|Quality and service standards. |Are employees alert and responsive to shifts in the |
|Operational long and short-range planning and annual |marketplace? |
|budgeting. |Are individuals biased towards action and confident in their |
|Human resource development and training. |ability to respond? |
|Formal and informal organisation structures. | |
|Advertising and promotional literature. |Examine how information flows and power is distributed. |
|Company publications. | |
| |Are the companies decentralised or centralised in their |
| |decision-making process? |
| |Are individuals empowered to act, with decision-making pushed |
| |to the lowest practical level? |
| |Is there an intensity throughout the organisations? |
| |Is passion evident? Is it supported by a willingness to go the|
| |extra mile? |
|Cultural Integration |Managers will need to: |
| | |
|This process requires consideration of a number of issues, |Establish the strategic context early on. |
|including organisational structure, operating and | |
|decision-making apparatus, reward systems and people-related |What should the integrated company look like in two or three |
|issues. |years? |
| |What are the products and markets that will receive the |
| |highest emphasis and resources? What are the barriers to the |
| |success of this new enterprise? |
| |What will cause us to succeed? |
| |What infrastructure and skills do we need to support our |
| |competitive advantage? |
| |What is the driving force (key strategic concept) that drives |
| |strategic decisions around products and markets? |
|Reducing Uncertainty in Teams |Communicate to all employees, suppliers, customers and |
| |shareholders. They simply need sufficient understanding of |
| |what the goals are and how they can behave to support them. |
| | |
| |Management behaviour - managers can act in a manner completely|
| |contrary to written values and beliefs. This sends a mixed |
| |signal that typically results in no change. |
| | |
| |Identify and resolve important cultural differences early. |
| |Differences in culture and values often lie beneath the |
| |surface and are not identified until it is too late. |
| | |
| |Identify leaders. First is the necessity of ensuring that the |
| |executive team is aligned with the new strategy during the |
| |integration process. Second is the creation -- as quickly as |
| |possible -- of a new management team. |
| | |
| |Have a plan for cultural integration. |
END
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
- western kentucky university
- culture syllabus spring 2010
- com 252 interpersonal communication
- culture and ethics a comparison between japan the usa
- concepts to explore change perspective perseverance
- assessment 6 family culture project
- content outline university of phoenix
- informative speech intercultural dyad presentation
- chapter two culture
- how culture affects mergers and acquisitions
Related searches
- how culture affects child development
- how culture affects education
- how culture affects learning
- how culture affects society
- fdic mergers and acquisitions list
- explain how culture affects development
- how culture affects education pdf
- how culture affects development
- how culture affects food choices
- how culture affects eating habits
- how culture affects human development
- how culture affects personality