management

Post Merger Integration underscores the success of mergers

The global volume of mergers and acquisitions in the first half of 2011 was put at around EUR 900 billion. Yet the failure rate seems almost as high as the takeover rate. The biggest stumbling block is going about integration and synergy management the wrong way.

Google ingests Motorola Mobility. Beer giant SABMiller launches a hostile takeover bid for Australia's number one beer brand Foster's. Fiat acquires a majority stake in Chrysler. US pharmaceuticals service provider Express Scripts swallows rival Medco Health Solutions. Microsoft buys Skype. And Volkswagen seeks to make a big splash o the international commercial vehicle market by snapping up MAN. Browse through the business press and it seems companies are acquiring and merging like there is no tomorrow.

Not a trace of a hangover from the crisis, then. Thomson Financial puts the global volume of mergers and acquisitions (M&As) in the first half of 2011 at around EUR 900 billion, not including transactions in the private equity sector. That is a year-on-year increase of 50%. Yet the failure rate seems almost as high as the takeover rate.

The biggest stumbling block is going about integration and synergy management the wrong way. According to the Roland Berger study, this is the one factor to which 80% of the respondent experts primarily attribute the failure of acquisitions. Other reasons are also cited, but play a far less significant role. They include culture shocks that drain all the energy from the new entity, exorbitant acquisition prices and the egos of the chief executives involved. All these factors can leave a merged or merging enterprise unable to exploit its new opportunities.

think_act_CONTENT_on_Post_Merger_Integration  

Dream team better than quotas

Dream team better than quotas- As many as 80% of the large-scale international companies surveyed are aware of the importance of diversity & inclusion (D&I) as a management issue. Changes in legislation and demographic trends are forcing them to take it more seriously. But there are a number of internal factors preventing the rollout of effective D&I initiatives: management behavior, corporate culture and a lack of appropriate guidelines and processes in HR. This situation needs to change, because successful and sustainable D&I management would bring annual savings calculated at almost EUR 21 billion for German industry as a whole. And not only that, it can also deliver clear-cut competitive advantages for individual companies. This finding emerges from the study "Dream team better than quotas – Successful diversity & inclusion management"

Holistic D&I strategy delivers real benefits- The Roland Berger Strategy Consultants survey covers forty large corporations, including companies from the automotive, construction, energy, chemical and electronics industries. It shows that four out of five businesses believe that diversity and inclusion management is important. "D&I is not just about doing more to integrate women, older employees and colleagues with a foreign background," explains Carolin Griese-Michels, Head of the Practice Group Corporate Responsibility at Roland Berger. "Recognizing the specific skills and competencies of each employee and their individual ways of working also forms an important part of a holistic D&I strategy aimed at delivering major benefits for the company."

Diversity without quotas- Regarding the main drivers pushing businesses to adopt D&I measures, 60% of the companies surveyed mention government legislation and the increasing heterogeneity of the modern workforce. Although companies recognize they still have a lot of catching up to do in terms of diversity, 70% of respondents argue against introducing legally binding quotas for minorities. "In the worst case, firms would have to hire or promote someone representing a minority even though they lack the necessary qualifications for the job," says Griese-Michels, explaining the fears voiced by companies.

Reasons for a lack of diversity- Another part of the problem is that companies do not enable their people to find an adequate balance between family and work. "Sometimes, companies haven't put in place any instruments for this," says Griese-Michels. "In other cases, the employees themselves don't take advantage of what is on offer because they fear disadvantages for their career." Another aspect is the hiring procedure. Criteria such as the gender, age or ethnicity of an applicant still play a decisive role – even if unconsciously. This often results in what can be called "self-cloning": executives tend to choose people like themselves. Since selection panels are frequently homogenous in composition, the candidates who fit the pattern are more likely to be approved.

http://www.rolandberger.com/expertise/publications/2011-05-09-rbsc-pub-dream_team_better_than_quotas.html  

re: think CEO - Europe shows the way

2011

The recent financial and economic crisis showed that the European management model is superior to the American one. Europe's strengths are rooted in a long-term mentality, excellent manufacturing skills, the ability to set products and services apart and the ability to translate diversity into creativity.
These are the findings expounded by Professor Burkhard Schwenker, Chairman of our Supervisory Board, in his new book in the re: think CEO series: "Europe shows the way! The case for a superior management model".
The important thing, Schwenker asserts, is that European projects must empower European companies to rise to the four major challenges and trends of our day: A new single market strategy and energy policy must reinforce our manufacturing industry. Green technology must be perceived by the corporate sector as a new opportunity in the battle to halt climate change and conserve natural resources. The consequences of demographic change must be mitigated by migration and mobility. And the threat of future financial crisis must be countered preemptively by insolvency standards and a monetary fund at European level.
http://www.rolandberger.com/expertise/publications/2011-02-14-rbsc-pub-Dreimal_drei_Prozent.html  

Corporate financing is more challenging than ever

Companies need a solid financing basis giving them sufficient room for maneuver to exploit market opportunities and set their sights firmly back on expansion. In the aftermath of the crisis, companies – particularly small and mediumsized enterprises (SMEs) – find themselves in a tricky position.
They must reckon on facing greater limitations with regard to financing in the coming period.
For current and future refinancing projects, the level of permissible debt will be lower than before the crisis.
Financing and collateral structures have become more complex and a need for refinancing has arisen – for example as mezzanine programs have come to an end.
Securing a solid financing basis is more important – and more complex – than ever before.
It is a central decision-making area for companies and must be placed at the top of the agenda.
Businesses need to find the best possible solutions to the inescapable challenges.
To choose the right financing instruments, they need to understand the specific situation they find themselves in.
To answer these questions, a new Roland Berger study investigates the financial position of German SMEs after the crisis and what they can do to meet their future financing needs in a smart, sustainable manner.
In this edition of think: act CONTENT we present the key findings of the study and our recommendations for action.
http://www.rolandberger.com/expertise/publications/2010-12-07-rbsc-pub-Corporate_financing.html