M & A's: Making the marriage last

The corporate world is littered with M&As that have crashed and burned for failing to consider one crucial element: corporate culture. Iain Hopkins investigates why this eternal intangible is so important.

Despite countless organisations spruiking the motto, 'our people are the key to our success', it's interesting to note that when it comes to major corporate upheavals such as M&As, the people are often neglected. It's assumed everyone will simply go along for the ride, wherever that ride may be heading.

According to research by A.T Kearney, organisations neglecting this aspect of their due diligence are destined for failure. Of 115 global M&A deals researched, failed merger integration was not due to poor operational, financial or commercial planning. Instead, one of the top reasons for failed mergers, cited by 35% of respondents, was cultural differences and how they were addressed in the integration process.

what can go wrong?

Simon Mezger, vice president, strategy practice at A.T Kearney, notes that there are three major pitfalls that organisations fall into when it comes to M&As. Firstly, he says that in the lead-up to Day 1, there is a huge focus on business continuity, which tends to be independent of culture...

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