Figurewatch 8212; Merger pitfalls

Even the most successful mergers and acquisitions often stumble over people issues. According to a survey of 42 organisations across the ...

January 18, 1999 12:00 AM IST

1 min read

Even the most successful mergers and acquisitions often stumble over people issues. According to a survey of 42 organisations across the Asia-Pacific undertaken by a global human resources consulting firm 8212; Hewitt Associates 8212; 65 per cent had undergone a merger, acquisition or a joint venture in the past two years. While most companies had successfully achieved the business goals, far fewer felt they successfully brought together the distinct organisations, people and cultures.

The biggest detractors from the success of a merger or acquisition were employee communication 30 per cent, staffing 30 per cent and cultural issues 30 per cent. Interestingly, the costs involved with joining two companies were frequently underestimated. Of the companies that incurred additional costs, 56 per cent reported higher consolidation costs.