Targeted M and A Performance: Post-Acquisition Process and Organizational Integration

Corporations use mergers and acquisitions (M&A) as a tactic in implementing strategy, yet the rate of outcomes that meet targeted performance remains relatively low. Given the importance and frequency of M&A utilization in management strategy, it is critical that the success rate in achieving targeted performance improve so that M&A are viable strategic options for industry. Although pre-acquisition factors and processes such as financial due diligence and strategic fit may improve the chance of success, significant evidence of correlation between these elements and targeted performance outcomes does not exist. Further, companies will continue to combine irrespective of pre-acquisition conditions and thus need assistance from research in post-acquisition moderators of success.;Much of the research of post-acquisition M&A has developed along disciplinary lines where the process of functional integration is studied separately from integration of people in the merged organization. This study examines the contribution of both the functional integration and human capital integration to the targeted post-acquisition performance outcome. A systematic review of research explores post-acquisition integration literature to identify moderators of achievement of targeted performance.;The evidence collected supports the theory that successful post-acquisition integration of combined processes and organizational elements correlates to successful achievement of targeted acquisition performance. Further, the research supports the theory that, although pre-acquisition factors influence integration, the post-acquisition process moderates achievement of the targeted performance outcome. The analysis also provides evidence regarding the importance of leadership, management of employee-level dynamics, as well as completion of organizational and process integration prior to realization of synergies and targeted post-acquisition performance. Thus, where many companies identify the end of the post-acquisition process as the point at which functions combine as targeted, research suggests that closure also needs to occur on the organizational integration side to optimize possible synergies and acquisition performance.