Failure of Integration
| No permanent growth industry |
Incompatible culture |
| No plan for fit of personnel, plant and facilities |
Clash of management styles |
| Inadequate diligence by merger partners |
Incompatible marketing systems |
| Lack of strategic rationale |
Inability to implement change |
| Unrealistic expectations of synergies |
Inability to manage targets |
| Paying too much |
Quality of corporate governance |
| Conflicting corporate cultures |
Failure to move quickly to meld the two companies |
The reason, in McKinsey's view, was that too much emphasis was placed on post-merger cost-cutting and too little on revenue generation. The report concludes that success is determined by an organization's ability to protect and generate revenue growth just after the merger.
Major Concerns
Economic Concerns. Cross-border mergers may not contribute to productive capacity during entry time, but simply transfer assets and ownership from domestic to foreign hands, which are generally accompanied by the reduction in production, R&D activities and employment. Also sometimes it reduces competition in domestic market and lead to monopoly of foreign acquirers.
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* Contributed by -
Gulbahar Grover,
PGDIM - 11,
NITIE, Mumbai.
