January 10th, 2018
Project organization in mergers and acquisitions – steps
A good start point for the organizing function of projects is to review the goals and formulate a conceptual plan for the project. This involves the definition of the scope that the project will cover and identification of the important limitations and informational needs of the project (Verma, 1995). One of the proposed goals of current M&A’s is to obtain an operation leap that targets the customers, competencies, channels and content of the entity being acquired (Galpin, & Herndon, 2007). This implies that the organization of M&A’s should specifically be oriented to the overall goals of the acquiring entity (Meckl, 2004) such as maximizing the profits, efficiency or generating economies of scale through cost reduction using the available resources or maximizing sales from the synergy to be generated following the merger and/ or acquisition. The goal could also be to reduce competition by the acquisition of similar firms (Galpin, & Herndon, 2007) thus becoming the largest provider with huge resources to drive any further expansion programs to both the international and domestic markets. Setting the goals for the projects requires a subsequent development of the required programs (tasks) that ensure the attainment of the goals. This defines the resources – including human resource- that will be used and the link between such resources (Verma, 1995). In M&A’s the major tasks would comprise the preparatory, actual transaction and integration process (Meckl, 2004). All these involve aspects of structure, the human resource (people) involved in the process and defining the responsibilities for such persons.
The development of a basic strategy, leadership structure, screening of candidates likely to ensure set objectives are met and development of documentation to support the M&A activities would be crucial processes in the preparatory stage (Meckl, 2004). These involve the evaluation of the corporate strategic objectives that requires the presence of personnel with analytical abilities and the establishment of short communication channels in the organization to achieve a desired level of internal coordination while avoiding information leakage to competitors (Verma, 1995). The top management of the corporate particularly of the business units to be involved and probably the consultation with external experts such as accountants and auditors are important to the step (Meckl, 2004). Group meetings between the top management, the department charged with such acquisition, business development groups, unit heads of various business units and external consultants where such are needed are important in ensuring the preparation stage prepares a strong base to the transaction stage (Meckl, 2004). Go to steps continued.