The influence of speed of integration on M&A integration Success

Abstract

Despite the importance of the dimension of time in the world of competitive strategy, only a few researches have focused on the issue of the speed of the integration (SOI) in the process of merger/acquisition (M&A) and its impact on the deal-success. This article focused on the issue of speed of integration and its impact on the integration effectiveness and the success of the M&A. This impact changes depending on the combination of a number of variables such as the main reason of the acquisition, the type of acquisition, the characteristics of the companies involved in the acquisition, and the selected integration approach. Therefore, every acquirer has to pay attention to the SOI variable and to adjust the optimal speed to the specific acquisition scenario.

The role of brand equity on mergers and acquisition in the pharmaceutical industry

“…It is suggested that both the motives behind this activity and post‐acquisition organizational changes are driven by synergistic factors (Thompson et al , 1992) Because operational synergies promise to improve competitiveness in terms of lower cost or greater product differentiation, we speculate that these synergies are the most difficult ones to realize and will potentially result in another wave of divestitures. Despite the importance of the dimension of time in the world of competitive strategy, only a few researchers have focussed on the issue of the speed of the integration in the process of M&A and its impact on the deal success (Morga and Barakonyi, 2009). The pharma and biotech industry has faced major challenges in the previous years with respect to both the revenues and costs which led to a merger wave in this particular sector (Kirchhoff and Schiereck, 2011).…”

New Challenges in Corporate Governance: Linking M&A and Social Responsibility

“…Companies search incessantly for new business models and business strategies that will improve qualities, as fast as possible, so that they can respond in the best possible way to the changing demand of the clients and to the changes in the map of competition in the domain (Morag & Barakonyi, 2009). When corporate governance considers types of strategies appropriate for company -one option is the growth strategy.…”

“…In external growth, the company is aided by the resources and abilities of other companies and this synergy can significantly improve the company` s competitive ability. Thus, the strategy of M&As is one of the main strategies adopted by companies and corporations so as to expand into new markets, diversify products and services, and increase the competition in the field (Morag & Barakonyi, 2009) Growth through M&A include (Montanari, Morgan & Bracker, 1990):…”

“…Numerous empirical researches attempted to identify external variables (related to the field and the environment) and internal variables (related to the companies involved in the process) that will help predict the success of the M&As. The impact of variables such as previous experience in acquisition, mode of payment for the acquisition, level of relatedness between the companies, and the type of acquired company, variables that seem to greatly influence the acquisition success, are examined, a significant correlation has not been identified between them and the M&A success (Morag & Barakonyi, 2009). When asked to pinpoint the critical elements of a successful cross-border M&A transaction, managers often cited "orchestrating and executing the integration process"(47% of respondents), conducting due diligence (43%), and energizing the organization and understanding cultural issues (40%).…”

“…mergers and acquisitions) is the one, which could bring benefits to the company. Authors find important to note that technological developments, primarily in the fields of computerization, communication and information, along with the process of globalization, processes of privatization of governmental companies, the liberalization in the transfer of merchandise and services between countries, and the trend of unification between fields and industries and companies and regions -all accelerate the popularity of the use of mergers and acquisitions (henceforth M&As) strategy (Morag and Barakonyi, 2009). However, the strategy must be effectively implemented, meaning that corporate managers (top managers) must recognize the importance of socially responsible business practices.…”