Leadership and Management in Mergers and Acquisitions Analysis

This report provides a comprehensive analysis of mergers and acquisitions (M&A), focusing on the critical role of leadership and management in their success or failure. It begins by critically evaluating the statement that most M&As fail to achieve their original objectives, exploring various reasons for M&A, including synergies, growth, competition, and globalization. The report delves into the impact of cultural differences, emphasizing the importance of understanding and managing cultural aspects within the organization. It examines different dimensions of culture using the Trompenaars model and suggests strategies for managing cultural integration during M&A. The report also evaluates practical management approaches, using the example of Mark and Spencer's mergers in Asia to illustrate leadership challenges and the application of leadership theories like transactional and transformational leadership, and situational leadership. The report concludes by highlighting key considerations for successful M&A management and leadership.

Leadership and Change
management/mergers and
aquisition

Table of Contents
INTRODUCTION...........................................................................................................................2
PART 1............................................................................................................................................2
Critically evaluate this statement ‘most merger and acquisitions fail to achieve the original
objectives for the undertaking....................................................................................................2
PART 2............................................................................................................................................6
Identify and evaluate how this merger might be practically managed.......................................6
CONCLUSION...............................................................................................................................9
REFERENCES..............................................................................................................................10
1

INTRODUCTION
Merger and acquisition is an action which involves two organisation whose business
operation and ownership has been integrated into single organization. This helps in
organization's in survival and growing the business. With M&A, there comes change in
leadership and management style which affects the organizations strategic position which
includes new information system, business expansion and re-structuring organizational units.
This report presents the critical evaluation of failure of M&A in order to achieve its objective
and identifying the reason for the same (Schein, 2004). It also includes how cultural difference is
the major cause of problem.
PART 1
Critically evaluate this statement ‘most merger and acquisitions fail to achieve the original
objectives for the undertaking
Defining merger and acquisition
Merger refers to combining two entities into one and acquisition means one company
taking over the another (Lageranna and Crawford, 2018). Some mergers are often called
synergies as acquiring company augments its capabilities and strengths with the assets of the
acquired company. Other mergers helps the acquiring company to enter into a different business
or diversify into other industries.
Reasons for M&A
M&A allows businesses to directly achieve the sales and profits by skipping the growth
stage. There are various reasons for the companies to merge or acquire another company. Some
major reasons are stated below.
Synergies: By combining the two business activities helps in improving the overall
performance of the businesses and also helps in reducing cost as both the companies can
leverage each others capabilities and strengths.
Growth: M&A gives the acquiring company an opportunity to expand and grow its
market share and profits without putting any major efforts (Snow Bill, 2020). As acquirer needs
to simply buy the business of another for certain price. Also, it helps in businesses in
diversifying the risk and take advantage of it.
Eliminating competition: Sometimes, the main reason for M&A is to reduce or
eliminate the competition with the purpose to remain in the market and gain market share. By
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merging two companies increases the power and strength of eth businesses to tackle another
competitor effectively which will help in improving the competitive position of the businesses
and in the better execution of the projects.
Taking advantage of economies of scale: M&A helps in gaining economies of scale as
it helps in reducing the expenses of the organization. Also, it helps in taking advantage in
taxation.
Increasing supply chain pricing power: Buying one of the supplier or distributor helps
the business in eliminating the entire cost (Why Do Companies Merge With or Acquire Other
Companies? 2020). Also, this buying is known as vertical merger or vertical integration which
assists in saving on the margin which was earlier paid as cost. It also benefits business in
delivering its products at lower price.
Gaining access to new market: M&A opens various opportunities to the business. If the
company acquires another company with similar business helps it in increasing its market share
and reducing competition and it results in negotiating the better price or terms with suppliers. If
the company acquired is from different industry helps in acquiring company in expanding its
business in the new sector and diversify its business. This helps both the companies in increasing
its overall productivity and performance.
Competition driver
Bettering market area is the biggest competitor driver for the organization, as all the
organization used to enhance the market area coverage of the company by conducting merger in
an organization. As merger help company in touching new market, but this eventually used to
increase the cost of the company in the market, which impact the organization in long run this
eventually force company to close down the operation of the business. Merger and acquisition is
also done to improve the product line of the company so that organization is able to satisfy need
of the customer in the market. This help the company in getting good sort of competitive
advantage in the market (Northouse, 2015). At the same time it also becomes for the
organization to predict the product line which will be require in the organization. This impact the
business very adversely and eventually create the situation where organization is force to close
the business.
Globalization
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Merger is also done for the purpose of entering into new global market. In this type of
the merger organization used to merge or acquire the business of the organization who used to
belong to the different nation. This help the company in entering into the new market more
efficiently but the report of Smith highlights that the organization used to not pass on the same
value to all the stakeholder of the merger and acquisition, which eventually used to create
variety of the issue and organization eventually has to close down the operation of the business.
Another reason which result in closure of the global merger and acquisition is find out the
culture difference (Mello, 2015). As it has find out that it sometime get difficult for the
company to adopt the merger and acquire company culture to plan different activity in an
organization.
Culture
Culture is generally define as a different belief, customs, morale, codes and tradition on
the basis of which organization used to operate in the nation. Leaders in the organization also
used to follow the different culture ethics, morale and codes in the organization. Culture
generally used to differ in between the two nation or country. There are many different aspect of
the culture which need to assess by the organization before deciding to acquire or merge with
any other nation organization.
Management of Culture
Understanding culture help the company in analyzing the market and also help company
in getting different information regarding need and preference of the market. This is one of the
biggest reason which used to drive failing rate of merger and acquisition in the market (Mankin,
2009). As culture change in the organization used to bring change in the behavioral pattern in
the organization, this some time used to brought down the morale of different stakeholder of the
company, which eventually used to reflect on the performance of the company in the long run
and eventually force the company to close down the operation of the business in the new market.
Multi-level – Formal and Informal
All the organization has to look and manage different dimension of the Trompenaars
model in the organization as it will help them in understanding the different dimension of the
culture in the organization. Seven different dimension of culture are as follows:
Universalism versus Particularism: In the Universalist culture idea can be applied
anywhere in the market and also there is a distinction between what is right and wrong. Where
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as particularism member are having a belief that situation is the best thing which help in
deciding how idea can be applied in the organization. So to manage the acquisition organization
should decide which concept will be followed in the organization, to implant the strategy.
Individual versus communitarianism: organizaton has to make sure has to make sure
that they used to bring communitarianism culture in the organization, in which they used to think
all the activity should be performed in the group.
Neutral versus emotion: all the organization has to managed good scope of emotion are
expressed openly in the organization. This will help company in knowing different aspect of the
market.
Specific versus Diffuse: organization to manage good merger has to make sure that they
used to adopt the specific type of the culture in an organization.
Achivement versus ascription: Organization to manage good culture make sure that
they used to adopt the ascription culture in an organization.
Sequential versus Synchronous: Falling of acquisition also is impacted by the time and
time zone in the organization. Organization has to make sure that they used to use synchronous
time culture in an organization.
Internal direction versus outer direction: Organization has to make sure that they used
to decide the direction of culture before taking another decision in an organization. This will
help the company in directing different decision (Kotter, 2012).
There are many ways through which organization can maintain a good sort of organizational
culture at the time of merger and acquisition in an organization. As per Trice Beyer, eight
considerations for managing cultures are as follows:
 Proper knowledge about the need of the change in the organization should be promoted.
 Promoting the different efforts which will be brought in the organization.
 Different stakeholder has to understand the resistance to different culture change in the
organization.
 After that organization also at the time of merging and change in the culture has to make
sure that they used to maintain good sort of continuity in the organization. Irrespective of
keeping many of the element change in the organization.
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 After that has to recognize all the stakeholder the importance of implementing same, as
Smith has identified that not promoting clear message to the stakeholder is the biggest
reason which lead to fall of most of the acquisition and merger.
 Select, modify and create healthy cultural platform in an organization.
 Modify Socialization Tactics in an organization
 Find and cultivate innovative leadership (Jabri, 2017).
PART 2
Identify and evaluate how this merger might be practically managed
In the year of 3 years organization Mark and Spencer has done the variety of the merger
in toward the Asia region but this merger does not prove that crucial for the organization, as they
has to sold all the merger again to the other company in the year 2018, there were many different
reason behind the same in the nation, some of the reason and ways through which organization
would able to maintain the quality of the merger are as follows:
Leadership: It was one of the main reason behind the fall of the merger in the Asia
region, as it was found that all the decision which used to be taken in the organization, used to
be taken at the UK stores and this is the same which has to be followed by all the employee in
the Asia, this eventually used to create the different between the thought process of different
market in the nation. There are two type of leadership theory which can be applied in the
organization i.e. is transformation and transnational. Transaction leadership style is the style in
which head in the organization used to make the different decision in the organization (Hayes,
2014). Where as in the transformation leadership style leader used to work closely with the
different employee in the organization and used to involve the suggestion of different employee
in different decision which are being taken in the organization. To manage the successful
leadership in the Mark and Spencer store, organization would have taken the following step:
 Situational leadership: If mark and Spencer would have used the situational leadership in
the organization, It would have helped the company in understanding the different
situation of the Asia market and on the basis of the same would have help the company
in implementing different leadership style in the organization. This would have definitely
help the leader in bringing good sort of clarity in the operation of the business and
improving the morale of the company in the market.
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 Organization should have used the leadership for the different phase in the organization.
This would also would help the company in getting best result out of the market. As if in
the recession period or change management leader had used the transformation
leadership, organization would have gotten benefit of building a good amount of trust
among the different employee in the organization. At the same time using transnational
leadership in the phase would had help he company in implementing the decision in
more prominent way in the organization.
Change management: Change management is the another reason which has prove a
very vital role in the downfall of merger in the Asia region. As it was seen that all the employee
was not clear about the different policy or the region behind bringing the different changes in the
organization. Also there were no training is given to all the employee in the organization so that
they can cope up with the different change management process in the organization (Handy,
1999). Some of the way through which organization would have managed the change
management successfully in the organization are as follows:
Kotters change management technique
Create a seance of urgency: In this organization should have created the situation in the
organization, in which all the employee are asked to create a good sort of the urgency in the
organization .
Form a guiding coalition: In this organization has to make sure that they used to fix a
good sort of guiding authority for all the employee in the organization, during the course of
work in the organization.
Develop vision: organization may have made a clear vision of different activity at the
time of merger and acquisition itself in the organization. Also, should make different activity in
the organization on the basis of the same vision in the organization.
Communicate a vision: Organization also has to make sure that they used to
communicate the same vision to all the employee in the organization. So that all the e
Empowering other in the organization about to work on the same vision as describe by
the organization in long run.
Plan different type of short term win and celebrate them when you achieve the same in
the organization.
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Also organization has to make sure that they do not declare the victory that easily in the
organization.
Communication: Communication is the another element which has played a very crucial
role in fall of this merger for the organization . As it has been find out that the organization head
are not able to maintain a good sort of communication in the organization, this eventually used
to create variety of the issue related to the clarity in the organization ( Deal and Kennedy,
1982). It has also created a very negative environment in the organization, which has forced the
organization to shut down the variety of the stores in Asia region. Some of the way through
which organization would have gotten the benefit of good communication in the organization
are as follows:
 Organization would have followed the down to top hierarchy communication in the
organization. In this hierarchy organization would have given all the employee in the
organization a chance to keep their choice in the organization. On the basis of the same
organization would have taken the different policy. This would have helped the company
in maintaining a good moral of all the employee in the organization.
 Also organization would have improved the level of communication in the organization
by enhancing the level of the communication in the organization. This would have
helped the company in bringing good sort of clarity among the different employee in the
organization and also, it would have helped the senior management of the organization in
getting knowledge about the different situation through organization is going through in
the market.
 Also organization would have fixed the different medium for the employee, so that they
find it easy to communicate with the different authority in the organization more
efficiently. This has helped the employee in getting more exposure to the different
situation of the business.
Human resource: It is another reason which has seen as one of the major reason in
downfall of variety of merger in the organization. As it has seen that to save the cost of the
variety of the merger organization has not provided the training to different employee in the
organization. This eventually has created the situation where organization find it difficult to
improve the efficiency of human resource in the organization. There were many different
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technique through which organization would have improve the level of human resource in the
organization.
 Training: It is the best way through which organization would have enhance the level of
training in the organization. This would have helped the company in improving the skill
set of different employee in the organization and have also helped the company in getting
more diversed skill set in the organization. This would have helped the company in
getting more innovative idea in the organization and also would have helped the
company in overcoming the different issue more comfortably in the organization. This
would have also helped the company in promoting good sort of message to different
employee that organization used to care about them and used to take different decision to
improve their performance in the organization (Carberry and Cross, 2015).
 Organization was also having a good sort of option to bring variety of the difference in
the recruitment policy of the organization. Organization would have looked to have more
multidimensional skill set employee in the organization, this would have helped the
company in building good human resource, at the same time also saving good sort of
recruitment cost of the company. Also organization would have also look to have a
employee from different culture base in the organization this would have helped the
company in bringing good level of knowledge among the organization (Banfield and
Kay, 2012).
CONCLUSION
After going through the report it is concluded that there are 33 percent of the merger
which has been proved successful in past other than that all of fail. This report has concluded the
different reason behind failure of that merger. Also, this report has also concluded that there are
many reason behind failure of the merger in the nation such as culture, leadership, change
management, human resource and communication. Report also concluded different way through
which organization would have managed the merger and acquisition successfully in an
organization.
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REFERENCES
Books and Journals
Banfield, P and Kay, R (2012). Introduction to Human Resource Management (2nd Ed). Oxford.
Oxford University Press.
Carberry, C and Cross, C (2015). Human Resource Development: A Concise Introduction.
London;
Palgrave.
Deal, T.E. and Kennedy, AA (1982) Corporate cultures: the rites and rituals of corporate life,
Harmondsworth, Penguin.
Handy, CB (1999) [1976] Understanding organizations, London, Penguin.
Hayes, J (1014). The Theory and Practice of Change Management (4 th Ed). London. Palgrave
Macmillan.
Jabri, M (2017). Managing Organizational Change: Process, Social Construction and Dialogue
(2 nd Ed).
London. Palgrave.
Kotter, J (2012). Leading Change. Boston. Harvard Business Review Press.
Mankin D (2009). Human Resource Development. Oxford; Oxford University Press.
Mello J A (2015). Strategic Human Resource Management (4th Edition). Stamford; Cengage.
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Northouse, PG (2015). Leadership: Theory and Practice. 7th Ed. London; Sage Publications Ltd.
Schein, EH (2004). Organisational Culture and Leadership. 3rd ed. San Francisco;Jossey-Bass.
Lageranna, G. and Crawford, C., 2018. Merger and Acquisition: Conceptual Review. Available
at SSRN 3208534.
Online
Snow Bill, 2020. Mergers and Acquisitions: Reasons to Buy. [Online]. Available through:
<https://www.dummies.com/business/corporate-finance/mergers-and-acquisitions/
mergers-and-acquisitions-reasons-to-buy/>.
Why Do Companies Merge With or Acquire Other Companies? 2020. [Online]. Available
through: <https://www.investopedia.com/ask/answers/why-do-companies-merge-or-
acquire-other-companies/>.
https://www.institutelm.com/ Institute of Leadership and Management
https://www.investorsinpeople.com/ Investors in People
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