A checklist for successful post-acquisition integration
- Differences in company cultures might undermine the success of the deal.
- Managers should not underestimate the co-ordination problems associated with a merger.
- The acquirer should investigate different options for an appropriate organisational design for the target, rather than imposing its own structure. Replacement of leadership has a negative effect on performance. Integration has a positive effect on performance.
- Issues around control should be carefully managed. Centralised control, with a removal of autonomy for the target’s management team, might demotivate and result in a poorly performing organisation.
- The acquirer should carefully design appropriate incentives for the acquired organisation’s management team.
- While there tends to be a high rate of exit among key employees, previous compensation arrangements affect how any new arrangements are perceived.
- Standardising pay scales, work rules and brands may not always be best.
- Worker dissatisfaction can be very damaging, especially within service industries or where key employees have a high degree of bargaining power.
- It is not so much what you buy but what you do after you’ve bought it, and how well you do it, that matters in distinguishing failure from success.