M&A Synergies Framework: Due Diligence Checklist—Management

This is a brief checklist of management factors to address when evaluating merger and acquisition synergies between two firms. For a more detailed discussion, see M&A Synergies Framework—Management.

Leadership

Leadership Turnover. Retaining top leaders can have a big impact on the outcome of the merger.

    • Be clear about who will be filling senior positions in the merged entity. Not only does upper management provide an example to their employees, but they also are probably the most invested in the merger. Keeping them will better help achieve the goals of the merger. Additionally, if firm culture is one reason for the merger, retaining the firm leaders will help retain that firm culture.

Employee Turnover. One of the biggest assets in a merger is employees. Retaining them will likely result in greater synergy.

    • Communicate effectively to avoid high turnover. If there is a high degree of uncertainty surrounding the merger, employees may leave the company of their own accord. It is best to communicate as thoroughly as possible to reduce fear-based departures.

Large Power Distance vs. Small Power Distance.1 The appropriate distance between leaders and subordinates varies between cultures.

    • Find the proper person to take care of your issue. In hierarchical cultures, specific people have specific jobs. If this is the case, getting a task performed may take longer since that person may have other responsibilities or may even be out of the office.
    • Understand your position in the organization. Even though is often acceptable for U.S. workers to directly address high-level leaders in their own culture, other cultures may view it as inappropriate or presumptuous. Likewise, when you are the higher-level executive, employees may expect you to behave in a more formal, authoritative manner, often because they believe that you reflect company status.2

Decision Making

Consensual vs. Top-down.3 The way people from different cultures make decisions can be frustrating if it differs from your own decision-making process.

    • Be patient with the decision-making process. Americans tend to make decisions quickly and change that decision many times before a final decision is made. Other cultures are more averse to the change. They may take a while to get decisions made, but that final decision is often quickly implemented and rarely changed.
    • Participate in the decision-making process. In some consensual cultures, it is expected that everyone shares their opinion and ideas during the decision-making process. Others will notice if you don’t participate and decisions won’t be made without you.

 

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  1. 10 minutes with Geert Hofstede… on Power Distance 10112014 [Video file]. Retrieved from http://geerthofstede.com/training-consulting/online-lectures/
  2. Meyer, E. (2014). The Culture Map: Breaking Through the Invisible Boundaries of Global Business. PublicAffairs
  3. Meyer, E. (2014). The Culture Map: Breaking Through the Invisible Boundaries of Global Business. PublicAffairs