Role of communication and transition teams in human merger integration

Abstract

Globally there has been an unprecedented growth in the wave of merger and acquisition activity. Mergers and acquisitions are fast becoming essential elements of corporate strategy. The worldwide value of mergers and acquisitions announced in 1998 pushed the $2.5 trillion mark- more than S0 percent higher than the previous year - and activity for 1999 is also brisk. India is no exception to this trend. The problem has been that many, if not most, do not perform well. The percentage of acquisitions deemed failure runs the gamut across the research from a low of 50 percent to 75 percent. A number of studies suggest that merger and acquisition successes are related to the quality of post-merger restructuring and integration process. Studies have often traced the root cause of failed merger to people-related issues such as delayed decision-making, lack of detailed integration planning, poor communication, an exodus of key talent, an unfair or politicized staffing process etc. Most surprisingly, the human aspects of post-merger integration are one of the topics, which" has remained unexplored by the researchers even in USA, In India this area has been largely unresearched. Therefore, this study would provide a platform from which future studies in the area can be undertaken. The objective of the present study is to understand the role of communication and transition teams in post-merger integration. The study aims to review the academic research carried in the human aspects of merger in general and the role of communication during integration and role of transition teams in mergers in particular. The review provides brief look into the insights and recommendations provided by the published works of the practicing mangers and consultants. The study was carried out by extensively reviewing the articles appearing in the prestigious research journals and also the books published on the topics by academicians, practicing managers and consultants.