Hey,
I got a question:
What measures can we take (legal and culturally) to prevent failure of a merger?
Thanks.
Get Active in Our Amazing Community of Over 451,000 Peers!
Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Case Partners to connect and practice with!
What to do to prevent Failure of a merger?
Overview of answers
Upvotes
Best answer
A lot of mergers fail because the cultures do no mesh.
Some points on this:
- Culture is built around core values: integrity, trust, cost efficiency, growth mindset, customer orientation etc. It might be prudent to have a look on how the core values match together.
- Also, culture is a set of norms and socially accepted behaviours. When two cultures clash on each, this is often because of norms and behaviours are incompatible.
- Culture is not built in a day. Creating a new culture in a organisation may need time or new staff.
- Culture and behaviours are usually shaped through motivational factors and incentives (competitive, burocratic, integrative cultures etc.) It might be worth looking into what motivates people to understand the culture and align on this.
Hope this helps.
Cheers
Was this answer helpful?
Hi!
As usual with brainstorming questions, please use a driver tree to disaggregate your are of scrutiny into its components. So the first question is "In which different ways can a merger fail?". Or asked differently - what characterizes "failure" of a merger? For example it culd be falling short of cost synergy targets, falling short of projected revenues, failing to integrate internal systems, failing to harmonize core processes, failure to marry cultures of related departments or the entire organization, etc. etc. Then you need to develop ideas for each of these arms, what kind of measures could prevent these issues (you might need to drill deeper into some of these issues first to isolate the actual drivers of the specific failures).
So this question is answered in an identical way as any other brainstorming question - with rigorous and crystal clear LOGIC.
Cheers, Sidi
Was this answer helpful?
Related Cases
Company case by Bain & Company
Style:
You have inherited the “Old Winery” from your grandfather, a winery that has been family-owned for five generations and can be dated back to the 16th century.Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in a conventional way, i.e. they
...
You have inherited the “Old Winery” from your grandfather, a winery that has been family-owned for five generations and can be dated back to the 16th century.Half of the eleven hectares are
...
(Open whole case)
118.1k
Times solved
Intermediate
Difficulty
Style:
Our client is a French holding company with annual revenues of about €1 billion. Their portfolio consists of different companies that are mostly in manufacturing industries such as the oil & gas industry and the automotive industry.They do not have a specific investm
...
Our client is a French holding company with annual revenues of about €1 billion. Their portfolio consists of different companies that are mostly in manufacturing
...
(Open whole case)
45.3k
Times solved
Intermediate
Difficulty
Our client is an electronics holding called Chip’n’Chip.They want to invest in a Printed Circuit Board (PCB) manufacturer called OnBoard, and asked you whether it’s going to be a good investment.How would you help them?
Our client is an electronics holding called Chip’n’Chip.They want to invest in a Printed Circuit Board (PCB) manufacturer called OnBoard, and asked you whether it’s going to be a good investment.How would you help them?
(Open whole case)
37.1k
Times solved
Advanced
Difficulty
A printing company is planning to take over another printing company with similar technology and printing machines. The candidate is supposed to evaluate the acquisition by answering a line of questions that are presented in the “suggested approach” section.
A printing company is planning to take over another printing company with similar technology and printing machines. The candidate is supposed to evaluate the acquisition by answering a line of questions that are presented in the “suggested approach” section.
(Open whole case)
17.2k
Times solved
Intermediate
Difficulty
Our client is SuperBurger, a fast food chain that operates in the same class as McDonalds, Wendy's, Burger King and so on. They're the fourth largest fast food chain worldwide in terms of number of stores in operations. SuperBurger owns some of its stores, but 85% of its stores are owned by franchis
...
Our client is SuperBurger, a fast food chain that operates in the same class as McDonalds, Wendy's, Burger King and so on. They're the fourth largest fast food chain worldwide in terms of nu
...
(Open whole case)
16.0k
Times solved
Advanced
Difficulty