Publications » Schweiger & Associates - Helping Organizations Grow Profitably

M&A Integration : A Framework for Executives and Managers

Written by Evan Schweiger December 9, 2010 —

Publication:

M&A Integration: A Framework for Executives and Managers

Publisher:

McGraw-Hill

Author:

David M. Schweiger

Abstract:

Global M & A activity continues at a blistering pace. However, a recent study of Fortune 500 executives found that post-merger integration issues such as culture clashes, style, ego, and change management are the most common pitfalls that can derail otherwise successful mergers or acquisitions. M & A Integration meets that trend head-on, providing a practical framework for integrating acquisitions while helping managers direct each step in the volatile post-merger integration process.

An Integrative Framework For Creating Value Through Acquisition

Written by Evan Schweiger December 9, 2010 —

Publication:

Creating Value Through Acquisitions, Demergers, Buyouts and Alliances

Authors:

David M. Schweiger & Ernst N. Csiszar

Editor:

Bruce Lloyd

Abstract:

Acquisitions are notorious for the many problems and barriers that can prevent the acquiring firm from realizing value, and even when potential for creating value exists many of these opportunities are lost in the acquisition process. In examining value creation through acquisition the authors attempt to build a model for approaching a potential merger and assessing whether or not it will add value for the acquiring the company.

Can A Clash Of Cultures Undermine This Cross-Border Merger?

Written by Evan Schweiger December 9, 2010 —

Publication:

Harvard Business Review

Case Author:

Byron Reimus

Expert Commentary Authors:

Robert F. Bruner, Leda Cosmides, John Tooby, Michael Pragnell, David M. Schweiger

HBR Abstract:

It was supposed to be an amicable “merger of equals,” an example of European togetherness, a synergistic deal that would create the world’s second-largest consumer foods company out of two former competitors. But the marriage of entrepreneurial powerhouse Royal Biscuit and the conservative, family-owned Edeling GmbH is beginning to look overly ambitious. Integration planning is way behind schedule. Investors seem wary. But for Royal Biscuit HR head Michael Brighton, the most immediate problem is that he can’t get his German counterpart, Dieter Wallach, to collaborate on a workable leadership development plan for the merged company’s executives. And stockholders have been promised details of the new organizational structure, including a precise timetable, in less than a month. The CEO of the British company–and of the postmerger Royal Edeling–is furious. It’s partly a culture clash, but the problems may run deeper than that. The press is harping on details that counter the official merger-of-equals line. For instance, seven of the ten seats on the new company’s management board will be held by Royal Biscuit executives. Will the clash of cultures undermine this cross-border merger? Commenting on the fictional case study are Robert F. Bruner, the executive director of the Batten-Institute at the University of Virginia’s Darden Graduate School of Business Administration in Charlottesville; Leda Cosmides and John Tooby, the codirectors of the Center for Evolutionary Psychology at the University of California, Santa Barbara; Michael Pragnell, the CEO and director of the board for the agribusiness firm Syngenta, based in Basel, Switzerland; and David Schweiger, the president of the Columbia, South Carolina–based management consulting firm Schweiger and Associates.

David M. Schweiger Case Commentary Abstract:

In an increasingly global economy it is crucial that culture be approached with tact and respect; particularly when it involves firms from different countries with differing backgrounds, values and beliefs. However, it can be just as important that a leader is equally equipped to see beyond those converging cultures, as they have so often become an automatic jumping off point or lynch pin in the current Global Merger and Acquisition environment. In the case of Oil and Wasser where the clear impetus is to focus immediately on German versus British culture, Dr. Schweiger wastes no time in dispelling the notion that their cultural differences could be the crux of the two companies incongruities and shortcomings. Rather, Dr. Schweiger has sidestepped that temptation and has taken aim directly at senior leadership; postulating that the real test of whether or not the merged companies will succeed will hinge far more on the ability of Michael Brighton and Dieter Wallach to resolve their own personal political and cultural differences and work together in an effort to integrate the company such that they are able to fully capitalize from the merger and on the competitive advantages of both firms.

Facilitating Acquisition Integration Through Deep-Level Cultural Learning Interventions: A Longitudinal Field Experiment

Written by Evan Schweiger December 9, 2010 —

Publication:

Organization Studies 26 (10)

Authors:

David M. Schweiger and Phillip K. Goulet

Abstract:

In this exploratory study we argue that achieving an effective employee mindset toward acquisition may be less a process of limiting acquisitions to firms with more similar cultures than it is an ability to manage cultural differences through cultural learning. This study is the first to systematically and empirically examine cultural learning interventions as they apply to the post-acquisition integration process. The longitudinal results from a fild experiment across three pairs of matched plants indicate that cultural distance between employees from combining firms can be bridged during the early stages of the integration process. Deep-level cultural learning interventions were found to develop constructive employee perceptions and attitudes that are believed to enhance performance in acquisitions requiring human integration to achieve synergies.

Strategic Growth Initiatives: Taking a Fresh Look

Written by Evan Schweiger December 9, 2010 —

Publication:

Business & Economic Review, July – September 2005

Authors:

David M. Schweiger, Robert L. Lippert, and Andrew L. Schweiger

Abstract:

In business creating value for stakeholders is the name of the game, and some might argue it is the only thing that is really relevant in business at all; therefore profitable growth is the means to that end and the one thing every CEO is constantly after. So, naturally profitable growth also happens to be the one thing CEOs consistently insist they will achieve almost any time they face their stakeholders. As a result, extensive – high quality strategic planning and detailed action plans are a must in addition to having a team of highly knowledgeable individuals to assess each available option. In this particular case the CEO committed to an ambitious goal of profitably growing revenue by a third within three years; but with a variety of strategic initiatives to achieve this goal waiting in the wings she would appear to be better positioned to reach her goal than most. With a variety of options in terms of forming a knowledgeable team to ultimately evaluate possible strategic initiatives as well, the case turns to assessing each option and evaluating which of those options is the most appropriately aligned with their immediate strategic goals as well as those in the future.

Managing Culture And Human Resources In Mergers And Acquisitions

Written by Evan Schweiger December 9, 2010 —

Publication:

Handbook of Research In International HR Management

Authors:

Philip K. Goulet and David M. Schweiger

Abstract:

In providing an insightful overview of a wide range of global human resource issues facing MNCs, this pathbreaking Handbook highlights emergent topics and new research findings that could shape the field of future IHRM research. Theoretical discussion of the variables and processes that affect IHRM policies and practices is provided by renowned contributors with widely differing academic backgrounds, paradigmatic orientations, and theoretical and methodological approaches. They explore extensive subject matter including: the importance of linking IHRM policies and activities to organizational strategy; staffing, performance management, leadership development, and diversity management; international assignment and mobility issues; and the role of IHRM in the management of global teams and cross-border joint ventures, mergers and acquisitions. Illustrating that IHRM research is theoretically eclectic, and drawing upon a range of paradigms and perspectives, this cutting-edge Handbook will be invaluable to academics and practitioners with an interest in human resource management, industrial and employment relations, management and international business.

Merge Right

Written by Evan Schweiger December 9, 2010 —

Publication:

Business & Economic Review, April – June 2002

Author:

David M. Schweiger

Abstract:

Mergers are notorious for failing to create value for shareholders even when they are seen to be the ‘sure thing,’ and Presidents and CEOs promise and guarantee increased shareholder value. Merge Right begins by exploring whether or not M&As do actually create value by outlining the different ways a firm could gain or lose value, providing a checklist of things an acquiring company should be aware of when looking for a firm to potentially acquire. Moving beyond the importance of finding the right firm to acquire the article goes on to emphasize the importance of conducting proper due diligence before and after formal contact with the target firm and on through the eventual transaction. The author then explains the crucial importance of continuing to be active and aware of the merger even after the deal is done, highlighting that much of the reason many M&As fail is that they are not managed beyond the signing of the agreement. It is also explained how important it is that the merger be evaluated periodically after the signing so that management has as much information as possible to steer the new combined firm correctly.

Executive Actions for Managing Human Resources Before and After Acquisition

Written by Evan Schweiger December 8, 2010 —

Publication:

Academy of Management Executive, Vol. 1 No. 2

Authors:

David M. Schweiger, John M. Ivancevich, and Jonathan D. Quick

Abstract:

In light of the increasing numbers of mergers and acquisitions and hostile takeovers, the authors find that the human costs of acquisition–in terms of “loss of attachment” felt by employees in the acquired firms–have not been given priority status by those responsible for human resources. Employees whose companies are acquired and merged into another company often feel betrayal, loss of autonomy and responsibility, and increased insecurity that, if not dealt with, can lead to psychological problems and subsequent loss of productivity. The authors examine the perceptions, emotions, and behaviors of 166 employees from six acquired Fortune manufacturing and service organizations. Interviews the authors conducted with the employees–who either resigned, remained or were terminated after the acquisition–revealed five major employee concerns: a loss of identity, a lack of information and anxiety, an obsession with self-survival, the loss of talent, and family repercussions. The participants also identified effective managerial actions that can soften the human costs of acquisition; namely, remaining committed to employees and displaying companionship, being honest, displaying sincere understanding for employee concerns, refusing to allow political behavior, handling terminations and outplacement with dignity, and actively managing the aftermath of the acquisition.

Cultural Differences And Shareholder Value In Related Mergers: Linking Equity And Human Capital

Written by Evan Schweiger November 19, 2010 —

Publication:

Strategic Management Journal, Volume 13

Authors:

Sayan Chatterjee, Michael H. Lubatkin, David M. Schweiger, Yaakov Weber

Abstract:

The relationship between perceptions of cultural differences of acquired companies’ management teams and stock market gains for the acquiring firms was studied. The aim of the study was to test the hypothesis that the cultural fit between the managements of merging firms influences the interaction between shareholder gains and the relatedness of the merging organizations. Questionnaires were mailed to a random sample of 198 acquired companies, but the final sample of firms was reduced to 30. Based on these responses, the independent variables of cultural differences and tolerance of multiculturalism, and the dependent variable of financial performance were statistically analyzed. Results revealed an inverse intercorrelation between shareholder value and the perceptions of acquired managers’ of the cultural differences between their companies and their new owners.