Measuring performance during M&A integration

Long Range Planning

Volumn 36, Issue 2, 2003, Pages 167-185

  Gates, Stephen ^a   Very, Philippe ^b  

^a The Conference Board ^*  (United States)

^b EDHEC BUSINESS SCHOOL   (France)

Author keywords

[No Author keywords available]

Indexed keywords

MANAGEMENT; MERGERS AND ACQUISITIONS; MONITORING; PERFORMANCE;

INTEGRATION PLAN;

STRATEGIC PLANNING;

INDUSTRIAL PERFORMANCE; INDUSTRIAL PRACTICE; MERGER; PERFORMANCE ASSESSMENT;

EID: 0037399377     PISSN: 00246301     EISSN: None     Source Type: Journal    
DOI: 10.1016/S0024-6301(03)00004-9     Document Type: Article

References (25)

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2. This research is described in the Appendix. For more information, see Performance Measurement during Merger and Acquisition Integration, The Conference Board Special Report (2000). The results presented at the beginning of the article were extracted from the questionnaire survey: they are also detailed and discussed in the Appendix.
3. See A. R. Lajoux, The Art of M&A Integration, McGraw Hill, New York (1998)
4. KPMG, Unlocking shareholder value: the keys to success, KPMG Mergers and Acquisitions Global Research Report (1999).
5. P. Very, and D. M. Schweiger, The acquisition process as a learning process: evidence from a study of critical problems and solutions in domestic and cross-border deals. Journal of World Business, 36(11), 11-31 (2001).
6. P. C. Haspeslagh and D. B. Jemison, Managing Acquisitions: Creating Value Through Corporate Renewal, The Free Press, New York (1991 ).
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8. A. Risberg, Ambiguities Thereafter- An Interpretive Approach to Acquisitions, Lund University Press, Lund, Sweden (1991).
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10. J. L. Bower, Not all M&As are alike- and that matters. Harvard Business Review, 79(3), 93-101 (2001).
11. P. C. Haspeslagh and D. B. Jemison, Acquisitions: myths and reality. Sloan Management Review 28(2), 53-58 (1987).
12. We relied on three reviews of the literature for identifying salient issues: D. M. Schweiger and P. K. Goulet, Integrating mergers and acquisitions: an international research review, in C. Cooper and A. Gregory, (eds), Advances in Mergers and Acquisitions, pp. 61-92. JAI Press, Amsterdam. (2000);
13. D. M. Schweiger and J. P. Walsh, Mergers and acquisitions: an interdisciplinary view, Research in Personnel and Human Resource Management 8, 41-107 (1990);
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15. For more information about HR difficulties, see A. F. Buono and J. L. Bowditch, The Human Side of Mergers and Acquisitions, Jossey-Bass, San Francisco, CA (1989).
16. For a review of issues linked to information systems, see Y. Merali and P. McKiernan, The strategic positioning of information systems in post-acquisition management, Journal of Strategic Information Systems 2(2): 105-124 (1993).
17. Additional information on staffing decisions can be found in D. M. Schweiger and Y. Weber, Strategies for managing human resources during mergers and acquisitions: an empirical investigation, Human Resource Planning 12, 69-86 (1989).
18. D. M. Schweiger and J. M. Ivancevich, The effects of mergers and acquisitions on organizations and employees: a contingency view, Annual Conference of the Strategic Management Society, Boston (1987).
19. A. C. Hax and N. S. Majluf, The Strategy Concept and Process: A Pragmatic Approach. Prentice-Hall, Upper Saddle River, NJ: (1996).
20. M. Goold and A. Campbell, Taking stock of synergy: a framework for assessing linkages between businesses, Long Range Planning 33(1), 72-96 (2000).
21. M. Killick, I. Rawoot and G. J. Stockport, Cisco System Inc.-Growth through Acquisitions, case study from the Graduate School of Management, University of Western Australia: Perth, Australia (2001).
22. The Balanced Scorecard translates strategy along four perspectives: "financial", "customer", "internal business process", and "organizational learning and growth". The non-financial measures emanating from the various perspectives build on one another to finally drive financial measures. In an acquisition, financial measures, like the realization of cash flows, greatly depend upon results obtained on "softer" measures like employee retention or customer satisfaction. During the Conference Board interviews, Science Applications International Corporation (SAIC) reported using the Balanced Scorecard for measuring performance in terms of revenues and sales, but also including elements such as retaining key people and lowering resignation rates. In this way, senior management compensation was linked to employee retention during acquisition integration. As the Balanced Scorecard is a well-known measurement tool, we do not present it extensively in this article. For a detailed description, see R. S. Kaplan and D. P. Norton, The Balanced Scorecard, Harvard Business School Press, Boston, MA (1996).
23. For an analysis of its application, see H. Ahn, Applying the Balance Scorecard concept: an experience report, Long Range Planning 34(4), 441-461 (2001).
24. For more information on GE Capital, it is worth signaling that an article specifically deals with its integration practices; see R. N. Ashkenas, L. J. Demonaco and S. C. Francis, Making the deal real: how GE Capital integrates acquisitions, Harvard Business Review 76(1), 165-178 (1998).
25. L. Lingle and W. Schiemann, From Balanced Scorecard to strategic gauges: is measurement worth it?,American Management Association Report 5, 6-61 (1996).