Making a Corporate Marriage Work

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Making a corporate marriage work
By Stefan Stern Bringing two companies together is an enormous task. There are grand, big-picture questions that need to be resolved, such as the new group’s strategy and direction. There are also administrative, logistical and technical challenges. Will new contacts of employment be required? Where should the headquarters of the combined operation be located? How can the companies’ information technology systems be integrated? “It takes a certain humility to make a merger work,” says Charles Hampden-Turner, co-author of Building Cross-cultural Competence. “It doesn’t follow that your company is a better one simply because it has taken another company over. It just means that you’ve got more money and have been prepared to pay,” he says. Work on bringing the partners together should start well before the deal becomes public knowledge. But how can executives start planning integration without the news leaking out? Some use a so-called ‘clean room’, where both sides to a deal can meet and discuss future plans confidentially. Computer manufacturers Hewlett-Packard and Compaq, for example, adopted this approach in their $25bn (£13.3bn) merger. Speed is of the essence. Roger Pudney of the UK’s Ashridge business school says: ‘There is often a tendency for companies to relax once this deal is signed, but this is precisely the point at which speed of implementation becomes crucial. Successful Mergers & Acquisitions companies stress the importance of quick wins as a way of demonstrating that the new combination is already producing added value.’ HP and Compaq ran a series of ‘Fast Start’ seminars for their staff as soon as the deal was announced, to provide reassurance and a sense of direction – seminars that had been planned in advance in the clean room. Offering employees detailed information is essential at the early stage. An internal human resource website set up for HP and Compaq staff received 2m hits on the day the merger was

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