Exploiting process management methods for post merger management

Abstract

Extensive research has been conducted to investigate failures of mergers and ac-quisitions. Challenges for the success of mergers and acquisitions can be traced back to the underlying motives of the parties involved. Explanations and estimates of the extent vary, but there is agreement throughout the relevant literature that the success of a merger is heavily influenced by the quality of post merger manage-ment. Essential risks exist that either strategic plans are not transferred correctly into operational merger activities or that a lengthy post merger integration project loses sight of the original goals. The purpose of this master thesis is to develop a methodic approach to reduce such risks. While the building blocks of this method are well known from project and process management, their application to mergers & acquisitions is an innovation. Phase models convey the idea that there is an ideal order of activities for organizing a merger. By contrast, an iterative approach to merger activities is presented here. The concepts of business process management are presented as the key to suc-cessful post merger management. The elements of phase models are still acknowl-edged as recommendable, but the gain in flexibility through the iterative approach helps to handle also situations when the ideal order of events has been violated. Details covered in this methodic discussion include: · Paying specific attention to the period between signing and closing of a transaction. During this period, management control is fragile, uncertainty among employees is high, and risks from the market are significant. · Managing the post merger project with sufficient reference back to specifica-tions from strategy and transaction phases in the form of project validation and testing. · Striving for a controlled environment of business processes: Post merger management is not confined with setting up solutions for the merged entity, but also takes responsibility for gaining control of ongoing business opera-tions in the merged entity. Concepts like the V-model of project management, quality management and the balanced scorecard are matched with typical M&A topics like strategic planning or cultural and economical due diligence. The combination of these concepts for post merger management is presented as the result.