Report on Merger and Acquisition Strategy in Leadership Management

This report provides an in-depth analysis of merger and acquisition (M&A) strategies, focusing on the critical role of leadership and change management in achieving successful outcomes. The report begins by critically evaluating the statement that M&A often fail due to cultural differences, exploring various factors contributing to M&A failures, such as integration difficulties, unrealistic valuations, and ineffective strategies. The report then examines a case study of a merger between two law firms, Lindsays and Hadden Rankin, and how Lewin's Change Management Model can be applied to manage the integration process effectively. The report emphasizes the importance of understanding and addressing cultural differences, and provides recommendations for a successful M&A implementation. The document serves as a valuable resource for students studying leadership, management, and business strategy, offering practical insights into the complexities of M&A and organizational change.

Leadership and
Management Change

EXECUTIVE SUMMARY
The following report is based on merger and acquisition strategy adopted by the
corporations functioning across the globe. The first task indicates that culture difference is the
primary reason behind the failure of merger and acquisition strategy. The second task talks about
the merger of two law firms in order to expaSnd the presence of acquirer within the confines of
Scotland post the BREXIT phenomenon. It is recommended that an organisation should follow
the steps of Lewin's Change Management Model while executing M & A to ensure that the
concerned move yields the desired results.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
Task 1...............................................................................................................................................4
Critically evaluate this statement “Most merger and acquisitions fail to achieve the original
objectives for the undertaking (Smith 2003) and a great number of investigations into this
phenomenon cite ‘cultural differences’ as the major source of the problem.”.......................4
Task 2...............................................................................................................................................8
With reference to an appropriate academic model identify and evaluate how this merger might
be practically managed...........................................................................................................8
RECOMMENDATIONS.................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Change is an integral and inseparable part of a corporation. To facilitate change within
the confines of an enterprise, it is essential for the company to exercise effective leadership and
management (Agarwal, 2018). In this relation, merger and acquisition is an effective strategy that
is adopted by companies across the globe with a view to expand their business network. The
present project is divided into 2 tasks. The first task is concerned with critical evaluation of a
statement. The second task stipulates the manner in which merger can be practically executed
and managed with the help of effective academic models. This task will witness discussion over
the merger of two law companies, namely, Lindsays and Hadden Rankin into Lindsays.
Task 1
Critically evaluate this statement “Most merger and acquisitions fail to achieve the original
objectives for the undertaking (Smith 2003) and a great number of investigations into this
phenomenon cite ‘cultural differences’ as the major source of the problem.”
Merger as well as acquisition tends to imply a substantial change within the premises of a
company. It is usually perceived by scholars as well as witnessed by researchers that mergers and
acquisitions generally result into a failure and are not able to generate significant value for
shareholders (Ahmed, 2018). A large number of studies conducted over this subject stipulate that
the accumulation phase of acquisition and merger procedure is a complex area of focus that
implies the failure of M & A. In this relation, it is identified that whenever an organisations
adopts merger or acquisition strategy and put it into force, it's main aim is to facilitate expansion
of business networking. The move is intended to be executed for enabling the increment of
revenues as well as profits. However, it is seen that most of the times, M & A fail to accomplish
these objectives owing to a number of reasons. Such sources of the problem are briefly described
as follows:-
Issues related to cultural integration:
Merger or acquisition encompasses accumulation of diverse set of cultures belonging to
two or more organisations. There lies massive difference between the organisational culture,
values, beliefs, customs, traditions, ideologies, leadership, management, staff perspectives of the
2 companies. In case merger or acquisition is executed in a manner which does not provide

assistance to the employees in being sensitive to the other cultures, it would lead to failure of the
implemented strategy of M & A of the company.
Unrealistic consideration incurred for target organisation:
The procedure of Merger and Acquisition encompasses valuing the target organisation
and thereby paying consideration for taking over the assets of an entity. In this regard, it is
usually seen that the price incurred to the target organisation is much excessive of the amount
that should have been incurred (Alhenawi, 2019). This is yet another reason why mergers as well
as acquisitions by corporations fail to attain the objectives behind their implementation.
Integration difficulties:
This is one of the most prominent causes behind the failure of acquisition and merger
strategy adopted by a corporation. In this regard, it is analysed that the combined organisation
needs to prepare itself for a cluster of challenges which would be faced by it as a result of the
altered situations. For this purpose, an enterprise devise plans with the help of which integration
of both the companies can effectively take place. With respect to this, it is identified that in an
instance whereby the data related to the concerned issues is irrelevant or inadequate, the
integration of companies becomes a difficult task to be executed as per the requirements.
Inconsistent Strategy:
M & A which are executed by backing them up with effective strategic course of action
are the ones that usually face success (Anthony, 2019). On the contrary, it is analysed that the
organisations which fail to take into account the strategical benefits of merger encounter failure.
Thus, this acts as yet another cause behind the failure of acquisition or merger to achieve the
original objectives of undertaking.
Ineffective business equipments:
It is further seen that a large number of mergers and acquisitions also tend to face failure
as a result of the ineffectiveness of offerings rendered by the merged organisation at market
place. In this regard, it is determined that at times the merged company is not able to stay aligned
with the market requirements and thereby provide products which are capable of meeting the
needs and demands of people pertaining to a nation (Brueller, 2018). Thus, the delayed or
ineffective response of company to the preferences of people also lead to the failure of
acquisition and merger in accomplishing the objectives linked to the undertaking.
Ineffectual due diligence:

Due diligence is regarded to be an essential aspect of merger and acquisition strategy as
this provides assistance in detection of corporate as well as financial risks which the acquirer
acquires along with the target organisation. In this regard, it has been analysed that inaccurate
estimation of the related risks may consequently imply the failure of merger or acquisition
strategy of the corporation.
High Leverage:
It is well known that one of the most prominent aspects of an effectual acquisition or
merger move is doing planning regarding the manner through which an ideal capital structure
would be set to do financing of the deal (Chahine, 2018). It is on the discretion of acquirer to
acquire the target by way of paying consideration in cash. For payment of consideration, the
acquiring company may take borrowings from marketplace. This leads to the creation of an
excessively high leveraged structure which tends to enhance the burden of interest over the
corporation. This inflated cost of interest would take a large part of the earnings of the company
and thereby ending the primary purpose of executing the acquisition strategy.
Boardroom Split:
Whereby a merger is executed by a firm, it becomes significance to do the assessment of
compatibility of directors as well as composition of boardroom. Hereby, it is often seen that the
director or manager who is separated from the power may become specifically bitter. In addition
to this, there are even high chances of some personality clashes that may take place amidst the
executives pertaining to the two organisations executing the merger strategy. Thus, this serves as
a crucial factor or issue which causes hindrance in the execution of integration of 2 or more
companies.
Regulatory challenges:
The overall procedure of merger needs a number of legal approvals. In this case, it is
analysed that whereby one or more of the stakeholder groups are not supporting the adoption of
merger strategy, it might result in emergence of legal constraints or issues (Risberg, 2019). This
may lead to a decline in the pace of the overall merger process. This tends to result in delay of
regulatory procedures and thereby consequently imply increment in risk of business
deterioration.
Human Resource Issues:

Whenever an organisation executes the acquisition and merger strategy, it is seen that a
new corporate culture is levied down and enforced within the confines of the corporation. This
implies restructuring of company and thereby consequently implying possibility of job loss for
some individuals. This can lead to creation of uncertainties, resentment and anxiety amidst the
personnel pertaining to the corporation.
Thus, above mentioned are some of the aspects which result into the failure of merger or
acquisition strategy adopted by a large number of firms in the modern world (de Bodt, 2018).
The factors result in failure of this move to accomplish the objectives set up by the concerned
undertaking. This is why a large number of organisations in the modern era face the adverse
outcomes of merger and acquisition in the form of staff clashes or excessive employee turnover
within the premises of the concerned firm.
Although there are several causes which result into the ineffectiveness of merger or
acquisition strategy, several researches and thesis conducted in past have reflected that cultural
differences have been the major sources which have led to the failure of M & A move. This has
been specifically pointed by a large number of researchers and scholars owing to the fact that
there lie differences between the cultures followed by both the companies executing the merger
or acquisition move. When two or more organisation pursue merger, it is usually seen that the
company in which the corporations are merged has the authority to implement their own
corporate culture and thrust the same upon even the employees that have come from the merging
company. In such an instance, it is usually noticed that the problem in the integration stage has to
do with the human factor (the employees coping with cultural differences, politics, lack of
effective communication etc.). Another factor that occurred most after the human factor is poor
strategies that are rolled out to deal with the cultural differences that emerge within the working
atmosphere and the cultural backgrounds of employees after the deal is sealed. This often leads
to clashes between the employees of both the companies (Hassan, 2018). Many a times,
personnel of both the organisations even become uncomfortable to work with each other. This
gives rise to emergence of a number of adversities within the premises of the concerned
organisation in which merger has taken place. When such things begin to happen, the working of
the entity gets affected to a large extent. Most of the times, such clashes even hinder the
enterprise from achieving the desired goal and objective for which merger or acquisition strategy

was executed. Thus, it is witnessed that cultural differences is one of the major factors behind the
high failure rate of M & A strategy across the global periphery in the present era.
Task 2
With reference to an appropriate academic model identify and evaluate how this merger might be
practically managed.
Merger and acquisition is regarded to be an effective way through which an entity intends
to increase its existent base of customers and level of sales. In this regard, it has been recognised
that Lindsays is a well renowned Scottish law firm which has acquired the Edinburgh based legal
practice Hadden Rankin. The 18 employees of the latter company will get transferred to
Lindsays and work under their culture and working pattern. To effectively and efficiently
manage this change, Lewin's Change management model has been used by the concerned
company.
Lewin's Change Management Model
Change is one of the major threats for business organisations but at the same time it also
provides opportunities to enhance their overall performance (Meglio, 2019). Thus, managing
change is crucial for company so that they can reduce the possibilities of arising any kind of
uncertainty. In context of this, Lindsays use Lewin's change management model that provide
simple framework for effectively understanding the merger procedure and managing it within its
confines. As it includes some crucial staged mentioned below:-
Stage 1: Unfreeze: It is initial stage of transformation and also consider as a critical
stage that help in managing the change within the company. Mainly, it includes the willingness
of employees to change to move from existing to transformed situation (Kim 2018). Along with
this, company also focus on making workers aware about the need for change and at the same
time also improve their motivation to evaluate the new ways to attaining better results.
Furthermore, effective communication is also play a significant role in this stage in which firm
includes employees within the change process.
Stage 2: Change: It is also refers to the transition and implementation of change. As it
focus in including new and innovative ways to do the best thing to attain positive outcomes.
Along with this, people are focus on implementing the actual change that required an effective
planning, communication and also encouraging involvement for endorsing the change in an

effective manner. This stage is not much easy because it includes certain uncertainty, fear in
employees towards the consequences of selecting best change process. As employees need time
for understanding the change in this stage (Larasati, 2018). In this regards, at the time of
managing change it is important for manager and team members to effectively deal of time and
efforts so that negative affect of changes can be easily eliminated.
Stage 3: Freeze: Under this stage of change model, employees move from the stage of
transition to stable aspects in order to accept the change. In this, workers have news ways of
performing their task that support in attaining positive results (Maas, 2019). Along with this,
workers are accept the changes and also celebrate the success of the change within the company.
For this, manager also provide training and proper support to workers so that they are aware
about all the changes. With the assistance of this, they can easily improve the chances of
attaining success.
RECOMMENDATIONS
On the basis of overall description provided in the above section it has been
acknowledged that merger and acquisition is an effective way to expand business effectively.
But, at the same time it business managers of the companies who are working together are
required to follow below stated recommendation to execute their business activities in
appropriate form. These recommendations are described as below:
 At first, it is recommended to business manger is required to conduct some training
sessions in which they will provide knowledge to overall workforce about the cultural
diversity and its associated benefits. This will directly contribute in managing reduces
impact of cultural differences within the company and influence employees to accept
cultural differences of their team members and perform their job responsibilities with the
same.
 At next, it is advised to business managers to follow each and every step of Lewin change
model in order to implement activities associated with the merger and acquisition of
Lindsays and Hadden Rankin in an effective manner. By incorporating this model in an
appropriate manner, managers of the firm will be able to reduce employee resistance and
implement change effectively. This will also support employees in performing their new
job responsibilities in best form as they are familiar with it and also takes self initiatives
to attain organisational goals quickly.

CONCLUSION
On the basis of above discussion, it can be said that change is an important part of every
corporation as it is introduced within the confines of the organisation with a positive motive.
Some of the most common reasons behind the incorporation of change in an entity are
introduction of a new product / service / process / system, facilitating shift in leadership or
management approach, introducing a new technology and many more. Apart from this, it is seen
that merger and acquisition strategy is adopted by corporations across the globe with a view to
facilitate expansion of their presence across the globe and enable increment in existent customer
base. In addition to this, it is recognised that there are several factors which hinder the M & A
strategy from achieving the objective for which the move was taken. Besides this, it is regarded
by several scholars and researchers that cultural differences is a primary reason behind the failure
of merger and acquisition strategy adopted by companies across the globe.

REFERENCES
Books and Journals
Agarwal, N. and et. al., 2018. Merger and acquisition pricing using agent based modelling.
Economics, management, and financial markets.
Ahmed, F., Manwani, A. and Ahmed, S., 2018. Merger & acquisition strategy for growth,
improved performance and survival in the financial sector. Jurnal Perspektif
Pembiayaan Dan Pembangunan Daerah. 5(4). pp.196-214.
Alhenawi, Y. and Stilwell, M.L., 2019. Toward a complete definition of relatedness in merger
and acquisition transactions. Review of Quantitative Finance and Accounting. 53(2).
pp.351-396.
Anthony, M.U.G.O., 2019. Effects of merger and acquisition on financial performance: case
study of commercial banks. International Journal of Business Management and
Finance. 1(1).
Brueller, N.N. And et. al., 2018. Linking merger and acquisition strategies to postmerger
integration: a configurational perspective of human resource management. Journal of
Management. 44(5). pp.1793-1818.
Chahine, S., Hasan, I. and Mazboudi, M., 2018. The role of auditors in merger and acquisition
completion time. International Journal of Auditing. 22(3). pp.568-582.
de Bodt, E., Cousin, J.G. and Roll, R., 2018. Full-stock-payment marginalization in merger and
acquisition transactions. Management Science. 64(2). pp.760-783.
Hassan, I. And et. al., 2018. Merger and acquisition motives and outcome assessment.
Thunderbird International Business Review. 60(4). pp.709-718.
Kim, J., Zheng, T. and Schrier, T., 2018. Examining the relationship between the economic
environment and restaurant merger and acquisition activities. International Journal of
Contemporary Hospitality Management.
Larasati, N.D. And et al., 2018. Do Merger And Acquisition Affect On Company’s Financial
Performance?. Sriwijaya International Journal of Dynamic Economics and Business.
1(4). pp.375-386.
Maas, A.J.J. And et. al., 2019. Viceroys or emperors? An institution‐based perspective on merger
and acquisition prevalence and shareholder value. Journal of Management Studies.
56(1). pp.234-269.
Meglio, O. and King, D.R., 2019. Family businesses: Building a merger and acquisition research
agenda. Advances in Mergers and Acquisitions, pp.83-98.
Risberg, A. and Gottlieb, S.S., 2019. Workplace Diversity and Gender in Merger and Acquisition
Research. In Advances in Mergers and Acquisitions (pp. 51-63). Emerald Group
Publishing.
Online
Scottish law firm Lindsays expands with merger. [Online]. Available Through:
<https://www.bbc.com/news/uk-scotland-scotland-business-50013657?
intlink_from_url=https://www.bbc.com/news/topics/c26xdm3zy39t/mergers-and-
acquisitions&link_location=live-reporting-story>.