Model for Merger Management - This is a work in progress!!

5. Integration Process Variables: Level of integration Speed of integration Acculturation Autonomy Removal Communication quality Social Integration Mechanisms 6. Integration Process Strategy integration Structure Integration Human Integration Process Integration Task Integration Procedural Integration 4. Org. Fit 2. Target Organizations Variables Degree of relatedness Organizational architecture Performance differences Approach Acquisition./merger experience 3. Culture General culture Organization culture National culture 1. Strategic Intent

Strategic Intent The Case for the Merger

2. Target Organizations Variables

2. Target Organizations Variables Degree of relatedness The relatedness/ relatedness bring different synergies that can be generated: Relatedness is usually considered against the background of the following: Similarity of production technologies Similarity of research processes Similarities in terms of products and/or service offering Similarities in term s of markets Relatedness generate the following potential synergies: Economies of scale Economies of scope Market power Relatedness is considered to generate other synergies such as administrative efficiencies, dominance due to size of firm, improved human capacity etc

2. Target Organizations Variables Degree of relatedness Organizational architecture Do the companies differ in terms of the span of control and degree of decision-making? Does the decision-making leeway, in terms of profit and cost centres, differ between buyer and target? How dissimilar are the compensation and incentive structures (e.g., the variable portion of remuneration)? What differences exist in core processes and functions such as market development, order processing, production of goods and services or extent of outsourcing? Post Merger Integration: Hard Data, Hard Truths BY Johannes Gerds and Freddy Strottmann with PakshalikaJayaprakash > Illustration by vincemcindoe

2. Target Organizations Variables Degree of relatedness Organizational architecture Performance Merger approach ,[object Object]

Influence the merger decision making process.

However the diagram below provide an intuitive view:Performance Firm A Performance Firm B

2. Target Organizations Variables Degree of relatedness Organizational architecture Performance Approach Acquisition experience Studies show mixed results in terms of performance of firms With less or more acquisition or merger experience. Few show The relationship consequences, as modelled here: Previous Experience Firm A Previous Experience The influence of organizational acquisition experience on acquisition performance: a behavioral learning perspective by JerayrHaleblian, Sydney Finkelstein Firm B

3. Culture General culture Organization culture National culture Can be “managed” However almost always follows Symbols Hero's Rituals Practices Values Cannot be “managed” Domain of transformation Transformational Leadership Cultures and Organizations:Software of the Mind By Geert Hofstede Presented by: Natalie Balaziuk, Beth Roszkowski, Michelle Yeager

3. Culture General culture Organization culture National culture What Culture is Transferred When Age: 0 10 20 Culture: Gender Family/Social class National Occupational Organizational VALUES PRACTICES

3. Culture General culture Organization culture National culture

3. Culture General culture Organization culture National culture Culture Development (Schein , Edgar H . Organizational culture & leadership [Web log message]. Retrieved from http://www.tnellen.com/ted/tc/schein.html)

Visible symbols Histories & stories ARTIFACTS Slogans Behaviours Dress codes Organisational structures & processes Rituals & Ceremonies Heroes & Legends Languages Core values Strategies ESPOUSED VALUES Beliefs Goals Philosophies Attitudes Unconscious beliefs Share assumptions Unconscious thoughts BASIC UNDERLYING ASSUMPTIONS Unconscious feelings Unconscious perceptions Adopted from Schein, E.H. Organizational Culture and Leadership, Jossey-Bass, San Francisco, 1992, Figure 9

Organizational Fit Go – No Go Decision and Integration Planning

5. Integration Process Variables: Level of integration High Need For Organizational Autonomy Tolerance For Multicultural Need for Strategic Interdependence Degree of Relatedness Low High

Model for Merger Management - This is a work in progress!!

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Model for Merger Management - This is a work in progress!!