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Post-merger integration or PMI is a complex process of combining and rearranging businesses to materialize potential efficiencies and synergies that usually motivate mergers and acquisitions. The PMI is a critical aspect of mergers; it involves combining the original socio-technical systems of the merging organizations into one newly combined system.
Corporate synergy refers to a financial benefit that a corporation expects to realize when it merges with or acquires another corporation. Corporate synergy occurs when corporations interact congruently.
Mergers and acquisitions (M&A) are transactions in which the ownership of companies, other business organizations, or their operating units are transferred or consolidated with other entities. As an aspect of strategic management, M&A can allow enterprises to grow or downsize, and change the nature of their business or competitive position.
The process of combining two or more organizations into a single organization involves several organizational systems, such as assets, people, resources, tasks, and the supporting information technology.The process of combining these systems is known as 'integration'. Integration Planning is one of the most challenging areas to address pre-close during a merger or acquisition. Even though culture clash between companies can cause integration problems, only 4% of the executives in a survey by Pritchett, LP reported that their organizations include culture-specific questions in their due diligence checklists. Culture specific due diligence may include cultural screening and creating a cultural profile of the target firm. GE Capital conducts a cultural assessment of prospective candidates against metrics such as trust in existing managers, language barriers, and operating processes to then facilitate a culture work out session between both sides.
An example of a typical structure for an integration consists of three layers: a steering committee, an integration management office (led by an integration manager) and a variety of additional teams organized by function (i.e. sales, human resources, finance, and information technology, etc.) and/or by business unit, product line, process, or geographic location.
The integration management office, or IMO, manages core functions of the integration effort and provides structure for integration delivery. [ verification needed ]In a survey by Global PMI Partners of 143 M&A executives, 67% of respondents incorporate IMOs during an acquisition on at least half of their initiatives in a cross-border setting.
More communication to employees is usually necessary during post merger integrations than during day-to-day operations.Fortunately, many of the questions from employees can be anticipated.
Achieving successes early in an integration can help build confidence in a deal and quiet skeptics.
Common problems that may be encountered during post merger integrations include resistance to change, divided loyalties, blurred roles and responsibilities, unclear reporting relationships, communication tangles, job insecurity, unusual employee turnover, and infighting.
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Integration fits within an organizational lifecycle or specific business mergers and acquisitions cycle where businesses buy, integrate, then dispose of businesses:
Organizational culture encompasses values and behaviors that contribute to the unique social and psychological environment of a business. The organizational culture influences the way people interact, the context within which knowledge is created, the resistance they will have towards certain changes, and ultimately the way they share knowledge. Organizational culture represents the collective values, beliefs and principles of organizational members. It may also be influenced by factors such as history, product, market, technology, strategy, type of employees, management style, and national culture. Culture includes the organization's vision, values, norms, systems, symbols, language, assumptions, environment, location, beliefs and habits.
Cross-cultural communication is a field of study that looks at how people from differing cultural backgrounds communicate, in similar and different ways among themselves, and how they endeavor to communicate across cultures. Intercultural communication is a related field of study.
A management information system (MIS) is an information system used for decision-making, and for the coordination, control, analysis, and visualization of information in an organization.
Due diligence is the investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement or contract with another party, or an act with a certain standard of care.
The Project Management Institute (PMI) is a global nonprofit professional organization for project management.
In organizational studies, resource management is the efficient and effective development of an organization's resources when they are needed. Such resources may include financial resources, inventory, human skills, production resources, or information technology (IT) and natural resources.
Power distance is the strength of societal social hierarchy—the extent to which the lower ranking individuals of a society accept and expect that power is distributed unequally. It is primarily used in psychological and sociological studies on societal management of inequalities between individuals, and individual's perceptions of that management. People in societies with a high power distance are more likely to conform to a hierarchy where "everybody has a place and which needs no further justification". In societies with a low power distance, individuals tend to try to distribute power equally. In such societies, inequalities of power among people would require additional justification.
Conflict management is the process of limiting the negative aspects of conflict while increasing the positive aspects of conflict. The aim of conflict management is to enhance learning and group outcomes, including effectiveness or performance in an organizational setting. Properly managed conflict can improve group outcomes.
Project Management Professional (PMP) is an internationally recognized professional designation offered by the Project Management Institute (PMI). As of August 2019, there are 932,720 active PMP certified individuals and 300 chartered chapters across 218 countries and territories worldwide. The exam is based on the PMI Project Management Body of Knowledge.
Enterprise relationship management or ERM is a business method in relationship management beyond customer relationship management.
ERM - Enterprise Relationship Management is basically a business strategy for value creation that is not based on cost containment, but rather on the leveraging of network-enabled processes and activities to transform the relationships between the organization and all its internal and external constituencies in order to maximize current and future opportunities.
Orange Business Services, the business services arm of Orange S.A., is a global integrator of communications products and services for multinational corporations.
Sopra Steria Group SA is a European information technology consultancy established in September 2014 upon the merger of Sopra Group SA and Groupe Steria SCA. Technically, Sopra was the company to adopt the new name, retaining its legal personality.
The human resource consulting industry has emerged from management consulting and addresses human resource management tasks and decisions. HR Consultants can fill two typical roles (1) Expert Resource Consultant (2) Process/People consultant. These two roles are defined by Steele F. (1975), Kubr,M. ; Niedereicholz (1996), Curnow-Reuvid (2003) and Kipping, K. and Clarck (2014).
Price Pritchett is a business advisor, speaker, and author specializing in mergers, culture, and organizational change.
Change management is a collective term for all approaches to prepare, support, and help individuals, teams, and organizations in making organizational change. The most common change drivers include: technological evolution, process reviews, crisis, and consumer habit changes; pressure from new business entrants, acquisitions, mergers, and organizational restructuring. It includes methods that redirect or redefine the use of resources, business process, budget allocations, or other modes of operation that significantly change a company or organization. Organizational change management (OCM) considers the full organization and what needs to change, while change management may be used solely to refer to how people and teams are affected by such organizational transition. It deals with many different disciplines, from behavioral and social sciences to information technology and business solutions.
Talent management refers to the anticipation of required human capital for an organization and the planning to meet those needs. The field increased in popularity after McKinsey's 1997 research and the 2001 book on The War for Talent. Talent management in this context does not refer to the management of entertainers.
Management due diligence is the process of appraising a company's senior management—evaluating each individual's effectiveness in contributing to the organization's strategic objectives.
A human resources management system (HRMS) or human resources information system (HRIS) is a form of human resources (HR) software that combines a number of systems and processes to ensure the easy management of human resources, business processes and data. Human resources software is used by businesses to combine a number of necessary HR functions, such as storing employee data, managing payrolls, recruitment processes, benefits administration, and keeping track of attendance records.