Mixed M & A Management Synergies

Since the second wave of corporate M&A, conglomerate merger has occupied an important place, and has been a major M&A form in the third wave of corporate M&A. But the failure rate of merger remains high, and the important reason is the lack of synergy or the limited synergistic effect. The dynamic of conglomerate merger is to obtain synergy effects. Among them, the managerial synergy effect formed by transferring and spreading of the management capability is the fundamental dynamic of conglomerate merger. This article takes the managerial synergy effect in the conglomerate merger as the study objective. Firstly, this article puts forward the point of view that managerial synergy effect is the fundamental dynamic of conglomerate merger, and discusses the sources, conditions and performance of the managerial synergy effect in M&A. Secondly, this article analyses the realization path of the managerial synergy effect from two aspects of the transferring of human capital and structural capital. Then, the article analyses the actual situation and reasons of the dissatisfactory managerial synergy effect in the conglomerate merger of Chinese enterprises, and puts forwards the counter-measures. Finally, the paper analyses empirically the diversification strategy of the "HuaRun" Group in China.Managerial synergy effect generates from the transferring of management capability formed by combination of the organizational capital and organizational experience. Accordingly, managerial synergy effect has two sources. The first is the transferring of human capital embodying the management capability. There are two ways to get managerial synergy effect through transferring of human capital. The first is transferring and allocating optimally of the human capital after M&A. The second is spreading and sharing of the human capital after M&A. Work rotation and team approach enables the advantage capital to transfer with the individual owners, through which getting the optimal allocation of human capital. The coding and the personification strategies can achieve the spreading and sharing of the advantages human capital between two enterprises. The second is the transferring of the structural capital corresponding to organizational capital. The structure capital consists of enterprise strategy, enterprise culture, and enterprise structure. The transferring of strategy capital of conglomerate merger can take the protection-model and commensalisms-mode. The transferring of culture capital of conglomerate merger can take the strong-model and penetration&separation-model. The enterprise organizational structure is embodied in the enterprises governance structure, organizational structure and the basic process structure. In addition, the management system ensures the integration of governance structure, process structure and organization structure.The cost of the managerial synergy effect in the conglomerate merger concludes premium value, integration costs and pre-transaction costs. The risk of the managerial synergy effect in the Conglomerate Merger concludes internal risks such as the risks in the process of transferring of the human capital and structure capital, and external risks posed by policy risks, legal risks and industry risks.With the actual situation of M & A activities of the Chinese enterprises, this article proposes that the result of managerial synergy effect in conglomerate merger activities of the Chinese enterprises is not satisfactory. The reason concludes both the macro constraints and enterprise internal factors. In view of these problems, the article puts forward the optional strategies. Firstly, macroeconomic environment of conglomerate merger should be improvea. in(?)ding the es(?)blishment of enterprise property rights market, playing coordinating ro(?) of the (?)ernment in M&A activities, developing and regulating the market intermediaries. Secondly, the enterprise's internal measures should be taken, including clearing the strategic goal of conglomerate merger, building rational enterprise organizational structure, enhancing human capital transferring efficiency, and choosing a suitable transferring model of the enterprise culture.