Reaping the Rewards of Cross-Business Collaboration in Mergers and Acquisitions

By Francis, Suzanne; Stearn, Jonathan | Ivey Business Journal Online, September/October 2011 | Go to article overview

Reaping the Rewards of Cross-Business Collaboration in Mergers and Acquisitions


Francis, Suzanne, Stearn, Jonathan, Ivey Business Journal Online


The success rate for mergers and acquisitions could increase considerably if managers from the two companies jointly developed what these authors call the "merger intent," a picture of what the combined organization should look like one year later. Readers will learn how managers in two organizations can collaborate to develop a merger intent that will make the deal work.

The M&A landscape

Based on activity so far, 2011 is showing promise of a return to the "good old days" for mergers and acquisitions (M&A). Yet, the likelihood that announced deals will prove to be successful is not much higher now than it was during the last boom in M&A activity. Most senior executives know that bringing together two organizations is, at the very least, risky and in some cases potentially hazardous to a prosperous future. More often than not, integrations don't achieve the value that senior executives anticipate. In short, the odds of success are not in their favor.

One of the reasons that deals fail to deliver value is the inherent psychological dynamic of "in group/out group," which plays out in the context of "acquirer" and "acquiree," and often keeps the two organizations at a distance during integration planning. Legitimate legal and regulatory constraints typically reinforce an overly cautious posture with respect to collaboration before and after the merger. Thus, organizations that will eventually combine operations and need to learn what it will take to be successful together often miss opportunities to work together. So, at a time when it is most important for organizations to collaborate, they do just the opposite.

Cross-Business Collaboration: A powerful tool for overcoming M&A challenges

It doesn't have to be this way. Over the last decade, we have worked with a number of clients to increase the "collaboration quotient" - the creative use of joint acquirer-aquiree efforts at all stages of the deal. These approaches have significantly improved their ability to capture deal value more quickly.

Throughout this article, we will draw on our experience with these clients to provide examples of how cross-business collaboration can enhance your efforts to integrate acquisitions - and meet expectations.

Specific opportunities to use cross-business collaboration

While there are many ways that cross-business collaboration might be used, it has the greatest impact on three areas.

1. Expanded due diligence: Getting a preview of what's ahead

Over the past few years, organizations have become ever more reliant on electronic information - supplemented by informal industry networks and publically available information - for learning about deal partners. Unfortunately, this kind of information is often sketchy on just the areas that they want to know more about, especially things like quality, cross-functional interaction, site maintenance, efficiency - the kinds of things that require observation or dialogue. This can make it difficult to get what some business development professionals call an "intuitive feel" for the deal partner.

The adoption of the cross-business collaboration tools and techniques that have evolved over the past few years is one way to counteract the inadequate research sources such as electronic data rooms. In our experience, there has been increased acceptance and a greater willingness to experiment with cross-business collaboration as deals unfold. The promise of a better understanding of what the combined business might be able to achieve and greater insight about what it will take to operate the business successfully is often the motivation for creative collaboration in M&As. Such collaboration has the potential to yield much richer and simply better results. It offers more comprehensive due diligence than conventional research methods. While there are often legal and/or regulatory constraints about what information and contact between two M&A partners is permissible early in deal activity, assessing the strategic and cultural fit and speeding the integration planning are generally acceptable and offer potentially rich opportunities for collaboration. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Reaping the Rewards of Cross-Business Collaboration in Mergers and Acquisitions
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.