Balanced Management of Key Success Factors in Mergers and Acquisitions

Abstract

Empirical studies of acquired companies suggest that the objectives that drove the deal were met only half the time.We argue that a new approach toward successful acquisitions is needed, which leads us to the concept of balanced management of hard and soft success factors. Hard success factors are professional due diligence, realistic assessment of added value potentials (combination of strong business nuclei) in acquiring as well as target companies and detailed post-merger integration plan prepared already in the pre-deal phase and its speedy implementation. Soft success factors are equally important and combine the economic logic of corporate performance and social capital, measured in quantitative and qualitative terms. Soft success factors are new »combined« organizational culture, conscious and innovative employees (leaders), and efficient and consistent communication with all interest groups during M-A process. It is the organizational success that counts in the end, winning the game is largely a matter of maximizing the value by achieving »one plus one is more than two«