The failure of mergers and aquisitions
The Failure of Mergers and Acquisitions Name
Professor
Institution
Course
Date
THE FAILURE OF MERGERS AND QUISITIONS 2
RUNNING HEAD: THE FAILURE OF MERGERS AND QUISITIONS 1
The Failure of Mergers and Acquisitions
Name
Professor
Institution
Course
Date
The success of a any merger and acquisition is directly proportional to the level of planning that is involved. A lot of organisations do not spend enough time to properly analyse and anticipate the current and future trends of market as well as issues related with the integration. Companies do not allocate sufficient resources to establish proper strategic objectives. As a result of this, most companies suffer setbacks because enough resources are not dedicated in conducting proper and enough due diligence on the targeted company. However, a growing number of studies have indicate that most of these mergers fail during the process of integration. The failure of integration is attributed to lack of proper strategies, differences in culture, communication delays, and a lack of clear vision due to poor initial planning. An example of this case is the merger between AOL and Time Warner.
The history of mergers and acquisitions is very long and dates as far as 1900s. Despite this, the prominence of mergers and acquisitions has considerably increased especially during the last two decades due to the adoption of mergers and acquisitions by a lot of firms in America as well as their adoptions of common corporate strategies to strategically position themselves in the markets, and expand their organisational capabilities (Bekier, Bogardus, & Oldham, 2001). This growth continued from the 1900s and beyond to include 7,809 transactions in America alone totaling a value if $1.19 trillion (Scherer, 2006). Perhaps the biggest question is why these transactions end up being failures. The enormous amount of research conducted to answer this
Professor
Institution
Course
Date
THE FAILURE OF MERGERS AND QUISITIONS 2
RUNNING HEAD: THE FAILURE OF MERGERS AND QUISITIONS 1
The Failure of Mergers and Acquisitions
Name
Professor
Institution
Course
Date
The success of a any merger and acquisition is directly proportional to the level of planning that is involved. A lot of organisations do not spend enough time to properly analyse and anticipate the current and future trends of market as well as issues related with the integration. Companies do not allocate sufficient resources to establish proper strategic objectives. As a result of this, most companies suffer setbacks because enough resources are not dedicated in conducting proper and enough due diligence on the targeted company. However, a growing number of studies have indicate that most of these mergers fail during the process of integration. The failure of integration is attributed to lack of proper strategies, differences in culture, communication delays, and a lack of clear vision due to poor initial planning. An example of this case is the merger between AOL and Time Warner.
The history of mergers and acquisitions is very long and dates as far as 1900s. Despite this, the prominence of mergers and acquisitions has considerably increased especially during the last two decades due to the adoption of mergers and acquisitions by a lot of firms in America as well as their adoptions of common corporate strategies to strategically position themselves in the markets, and expand their organisational capabilities (Bekier, Bogardus, & Oldham, 2001). This growth continued from the 1900s and beyond to include 7,809 transactions in America alone totaling a value if $1.19 trillion (Scherer, 2006). Perhaps the biggest question is why these transactions end up being failures. The enormous amount of research conducted to answer this
Cited: Bekier, M. M., Bogardus, A. J., & Oldham, T. (2001). Why mergers fail. McKinsey Quarterly, 0–5. Cartwright, S., & Schoenberg, R. (2006). Thirty years of mergers and acquisitions research: Recent advances and future opportunities. British Journal of Management. doi:10.1111/j.1467-8551.2006.00475.x Fan, J. P. H., & Goyal, V. K. (2006). On the Patterns and Wealth Effects of Vertical Mergers*. The Journal of Business. doi:10.1086/499141 Huyghebaert, N., & Luypaert, M. (2010). Antecedents of growth through mergers and acquisitions: Empirical results from Belgium. Journal of Business Research, 63, 392–403. doi:10.1016/j.jbusres.2009.06.003 Scherer, F. M. (2006). A new retrospective on mergers. Review of Industrial Organization, 28, 327–341. doi:10.1007/s11151-006-9105-9