Mergers and Acquisitions: Leading Across Complexity

Session Submission Type: Panel Discussion

Short Description

Mergers and acquisitions frequently cause turbulent times for the organizations involved. Leaders of these processes need unique skills to effectively bring their organizations together. Panelists will offer three perspectives on what leaders need to know and how to behave in order to successfully negotiate this challenge.

Detailed Abstract

Mergers and acquisitions frequently cause turbulent times for the organizations involved. Leaders of these processes need unique skills to effectively bring their organizations together. We offer three perspectives on what leaders need to know and how to behave in order to successfully negotiate this challenge.

Participants will gain:
• Awareness of the unique challenges that mergers and acquisitions provide
• An understanding of how leadership assessments can facilitate conflict resolution in this context.
• Awareness of issues related to intercultural decision making for leaders in this context.
• Awareness of issues related to intercultural post-investment valuation for leaders in this context.

The first panelist will share a case-study of two social service agencies in the Netherlands who successfully implemented a merger several years ago. They engaged a consultant who employed a battery of leadership assessments based on the Connective Leadership Model. These assessments helped the merging agencies move past mistrust and find a common vision and purpose from which to build a new future.

The second and third panelists will share their work in Eastern Europe to understand how effective mergers and acquisitions are possible in this dynamic merging economy. One panelist will focus his presentation on performing a form of intercultural due diligence in order to negotiate and make decisions in mergers and acquisitions. The other panelist will focus his presentation on the intercultural synergy valuation required in post-investment monitoring.

Negotiation and decision making in mergers and acquisitions. Intercultural due diligence
The focal point of this work includes some leading questions in M&A research in last decades and the connected cultural issues. It is focused on pre-merger/acquisition issues especially on negotiation, decision and intercultural due diligence. A better understanding of the impact of national, organizational and professional cultures in M&A is the primary purpose of the research process.
Cultural diversity might serve as both an asset and a liability in organizations. Whether the losses associated with cultural diversity can be minimized and the gains be realized will depend upon the managers’ ability to manage the negotiations and due diligence processes in an effective manner.
Notwithstanding, most of the researchers and organizational development professionals highlight the importance of due diligence in M&A, in many cases there is not an appropriate practical approach. Cultural Due Diligence (CDD) intends to offer data that is sufficiently detailed to determine potential areas of culture clash.
The work on intercultural negotiation must allow for the unwritten rules that differ across societies and are still controversial. Manager’s culture has a strong impact on the negotiations’ approach emphasizing outcome and/or process goals. Studying intercultural issues in decision making processes during mergers and acquisitions needs a cross disciplinary approach.
This work intends to deepen the understanding of the impact of cultural differences on M&A with emphasis on pre-M&A stage. This presentation examines the national, organizational and professional cultures as a determinant for the efficiency of negotiations, decision-making and due diligence. The focus of work is on the senior managers who experienced first-hand the process of intercultural due diligence, negotiation and decision making. The main target countries were Romania and Eastern European countries.
Our work provides support for the interaction between cultural specificity and the pre-M&A stage, as the cultural variables impact the perceptions on M&A negotiation, M&A decision making and cultural due diligence. We will expand on the current concept that pre-M&A activities include the study of three categories of culture (national, organizational and professional).


Post-investment monitoring. Intercultural synergy valuation.
This presentation is focused on post-investment issues, particularly on intercultural synergy, and M&A performance. The most challenging part of the M&A process is the integration of two entities that present different organizational and national cultures. Post-merger integration phase is a complex operation of mixing and repositioning processes to reify synergies that typically stimulate mergers and acquisitions.
Our work strives to find an explanation for M&A performance in terms of the impact that cultural differences have on the post-merger integration process. It emphasizes the role of post-investment monitoring and intercultural synergies achievement. The concept of “intercultural synergy” is still poorly understood despite a growing body of research on synergy creation.
The main goal of this presentation is to uncover intercultural issues that managers encountered during the post-investment phase and they should have discovered during the pre-investment phase. Intercultural synergy has a strong impact on M&A. Both national and organizational cultures are determinants for maximizing the intercultural synergy.
We chose to target countries of Romania and Eastern European countries; with the focal point to check whether there is a significant relationship between the M&A outcomes, synergy and the cultural differences. We will also examine the relationship between the perception on the M&A integration process and outcome and the cultural specificity. Our analysis indicates a considerable relationship between the M&A outcomes, synergy and the cultural differences. The same can be said about the relationship between the perception on the M&A integration process and outcome and the cultural specificity.

These presentations will be followed with a facilitated discussion about leadership in mergers and acquisitions with the participants.

Sub Unit

• Business Leadership

Chair

• Chris T. Cartwright, Intercultural Communication Institute

Presenters

• Ted A. Baartmans, The Leadership Group

• Maura J. Harrington, Center for Nonprofit Management