January 10th, 2018
Project organization in mergers and acquisitions – steps continued
The transaction process should comprise a number of important activities. Evaluation of due-diligence during the take over, negotiations for the right price of the proposed investment, and pre-closing integration plan (Meckl, 2004). During this phase the management’s role should change from simple decisions to ensuring the harmonious coordination of both the internal and external resources while allowing for the flexibility of the structure in accordance to the current requirements. The stage should be characterized by extensive communication among the involved departments and with professionals whether external or internal. It also puts an interface for the integration of the target company and the acquirer (Meckl, 2004). A structure that comprises multiple groups with both vertical and horizontal coordination should be established (Verma, 1995). This is facilitated by a steering committee comprising representatives of the top management, “power promoter” and the selected employees from departments such as M&A – where such exists – business unit and financial department (Meckl, 2004). The steering committee is the organ that coordinates the communication between the top management and between various subgroups and external professionals. Other responsibilities of the steering committee include determining the methods, and strategy such as negotiation tactics and deciding on the edge zones of the merger (Meckl, 2004). This requires the project leader to be fully informed and inform the committee on all matters and developing news as the merger process proceeds on towards the integration process.
Harmonization of the business of the acquirer and the target by putting these under the same organizational structure with defined roles for each personnel is the major step of the integration process. Such integration process would be placed under a single head with various taskforces such as Information technology, cultural change and human resources (Meckl, 2004). A structure, such as the “integration matrix” should allow for the implementation of procurement measures between the functional tasks and the overlapping teams and deal with questions that are likely to arise due to the change in organizational culture, information technology changes and similar changes (Meckl, 2004). The process requires an experienced integration head who guides the functional team and overlapping teams of professionals from both the acquirer and the corporate being acquired and external expatriates (Meckl, 2004).
The transition between each of the phases is as important as the phases themselves for the successful completion of the project. The “power promoter” is key to modulating the changes that occur during the merger process (Meckl, 2004). Such a person should be a member of the top management of the corporate so as to wield the necessary power to supervise the possible power changes resulting from the merger. It is also vital that adequate resources are allocated to each of the phases to avoid the premature termination or the prolonged time frame of the process. It is notable that the evaluation of the process includes the analysis of the core objectives that the project sought to achieve by a comparison of the results pre- and post-acquisition (Verma, 1996). The completion within the projected time frame also indicates the success in the organization of the merger or acquisition. Such completion though should be pegged to the level of achievement of the initial goals formulated. Go to conclusion and references.