Hr Integration in Mergers and Acquisitions: a Study of the Process and Its Determinants

Huge amount of capital involved in mergers and acquisition activity has raised the stakes of all the stakeholders involved. From the shareholders, senior management, employees and customers of merging, acquiring and acquired companies to investment banks and other parties involved, everyone anticipates substantial monetary/non monetary returns. Postmerger analysis reports, though, have not been very optimistic about results. Bothacademicians and practitioners claim that more than fifty percent of deals fail to create value for their shareholders. Such high percentage of failure, considering the amounts involved, results in losses tantamounting to billions of dollars. Reasons for failure that have been identified range from economic/strategic factors like paying more than intrinsic value of the acquirer or overestimation of synergies to organizational behaviour/HR related factors like cultural incompatibility, insufficient communication, unnecessary changes in the acquired and non or inadequate involvement of leaders. It is probably dissatisfaction of employees that leads to value erosion in the wealth of shareholders.