How to make mergers and acquisitions work - a review of the research evidence - The Oxford Review - OR Briefings

How to make mergers and acquisitions work – a review of the research evidence

Mergers and Acquisitions

Mergers and acquisitions are often seen as a desirable method of growing a business. However, many mergers and acquisitions fail to meet their desired outcomes and have in a number of cases resulted in disastrous consequences for the organisations concerned. As organisations grow and become more complex, mergers and acquisitions also become trickier to navigate. 


A new review of the research about mergers and acquisitions has just been published. The aim of the review conducted was to discover what is, and isn’t known in scholarly papers as mergers and acquisitions. The review focused solely on peer reviewed research and avoided the plethora of unsubstantiated works such as books, blogs, articles and other literature that abound. The study reviewed 480 research papers overall and then focussed on the findings of 193 papers deemed to contain quality, up-to-date research.


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In this Research Intelligence Briefing we will only look at what the research says about what processes are involved, and what hurdles there are to consider before and whilst a merger takes place between two (or more) organisations.




Signing a contract

Signing a merger contract is just the start


There are 7 accepted processes involved in any merger and acquisition:


The 7 Mergers and Acquisitions processes


The review found that there are 7 key areas involved in successful mergers and acquisitions:

  1. Context
  2. Intended outcomes
  3. Collective sense-making and negotiations
  4. Structural issues
  5. Adaptability and communication
  6. Leadership
  7. Communication and adaptability between the leadership


Agree the deal

Making the deal is just the first of a long line of work that needs to be done

1. Context

The first process involved is to understand the context the merger is taking place in. The main things that have to be considered for a successful merger are:

  1. How related the two businesses or organisations are and how they are related. This is usually a mapping exercise to understand these relationships.
  2. What the cultural distance is between the elements of the two organisations and how the internal cultures respond to each other.
  3. How their different histories and experiences inform how they see, do and make sense of things.
  4. What the populations of the organisations concerned think, feel and importantly forecast will happen when the merger takes place.
  5. What power the various stakeholders have in the two organisations and how they interact with each other.


2. Intended outcomes


The second thing that makes a difference is what the intended outcomes for the merger or acquisition are in reality and how they are articulated? This can play a significant role in later perceptions of success. These will be iterative in that as the merger progresses new opportunities and restrictions will become apparent which may change the intended outcomes.


collective sense-making

Collective sense-making


3. Collective sense-making and negotiations


The third area of concern that needs to be explored is what is termed collective sense-making and negotiations.

  1. How are the various groupings of people making sense of the merger?
  2. What are their perceptions of the reasoning behind the merger?
  3. What sense are they making of the actions being taken and the rhetoric being propounded?
  4. What do they believe?
  5. What are their interests and allegiances?
  6. What does the internal and external political landscape look like and how is it impacting people’s views?


4. Structural considerations


Structural considerations come next. These can be broken down into the following areas:

  1. Integration depth – how far are you intending to merge and integrate the two (or more) entities?
    1. Are you keeping two separate structures?
    2. Is one structure going to dominate?
    3. Is there a wholly new structure?
    4. Will they be sharing / competing for central resources?
    5. What will the management and responsibility structure look like?
    6. What will the effects likely be on the proposed integration depth?
  2. Integration speed. What is the pace of integration going to be?
    1. Will it be a big bang?
    2. Is there a phased approached?
    3. Are some parts of the integration going to occur at different speeds?
    4. Does the pace of the integration have dependencies, such as being dependent on feedback or market fluctuations for example?
  3. Operational Integration.
    1. How far are the various systems, procedures and policies going to be integrated?
    2. Is there a sequence of integration that needs to be considered, not only in terms of fitting the the systems, procedures and policies together but also in terms of the effect on output / customers?
    3. Do new systems, procedures and policies need to be developed and tested?

5. Adaptability and communications


The structural interventions need to be adaptable in the light of the developing sense-making and negotiations. Rather rather than making a plan and sticking to it regardless of what the context or changes in the environment suggest, any structural interventions need to be adapted and change as the organisation learns what works best.

Communication is key

Communication is key


6. Leadership


Leadership and communication based interventions. Key considerations include:

  1. Leadership styles
    1. What leadership styles will be needed when and who are the best leaders to mobilise for which parts of the journey?
    2. Who will be responsible as leaders for what?
    3. What are the systems in place or that can be developed for leadership learning and staying in contact with what’s going on?
    4. How are decisions going to be made and at what level?
  2. Mobilisation and mitigation
    1. Who, how, why and what will be mobilised and when will it be mobilised / put into action from a leadership point of view? What’s the plan?
    2. What are the mitigations which can change or stop a process?
    3. What is the feedback process and are the leaders really listening and looking?
  3. Managing cultural distance
    1. Map out the different cultures and how they operate
    2. Work out the cultural differences
    3. Don’t assume homogenous cultures per organisation
    4. What is the distance and how is it going to managed, does it need managing?


7. Adaptability and communications between the leadership


Adaptability and communications between the leadership – the collective sense-making going on in the organisations and the Intended outcomes. The leadership and management need to be in learning mode, and responsive to changing sense-making in both organisations and the adapting and shifting Integration Outcomes. Additionally, the leaders also need to be keeping a track of the Structural Interventions and importantly how they are affecting the Integration Outcomes.



Where there have been successes in mergers there have also been colossal failures. Chrysler famously tried to buy Daimler many years ago. There were so many obstacles to the two companies merging that Chrysler divested its German acquisition with a reputed loss of in excess of US $30bn. Proper planning and an awareness of the pitfalls will dictate whether the whole process will achieve the aims of the merger.

I have seen and been involved in a few successful M&As including the Schroders / Cazanove M&A which was and still is highly successful, largely because they paid attention to these issues


Reference – available to members 


Organisational mergers and acquisitions: The importance of culture change



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David Wilkinson

David Wilkinson is the Editor-in-Chief of the Oxford Review. He is also acknowledged to be one of the world's leading experts in dealing with ambiguity and uncertainty and developing emotional resilience. David teaches and conducts research at a number of universities including the University of Oxford, Medical Sciences Division, Cardiff University, Oxford Brookes University School of Business and many more. He has worked with many organisations as a consultant and executive coach including Schroders, where he coaches and runs their leadership and management programmes, Royal Mail, Aimia, Hyundai, The RAF, The Pentagon, the governments of the UK, US, Saudi, Oman and the Yemen for example. In 2010 he developed the world's first and only model and programme for developing emotional resilience across entire populations and organisations which has since become known as the Fear to Flow model which is the subject of his next book. In 2012 he drove a 1973 VW across six countries in Southern Africa whilst collecting money for charity and conducting on the ground charity work including developing emotional literature in children and orphans in Africa and a number of other activities. He is the author of The Ambiguity Advanatage: What great leaders are great at, published by Palgrave Macmillian. See more: About: About David Wikipedia: David's Wikipedia Page