Based On The Core Competencies Of The Business Post-merger Integration Management

The confidence in M&A transactions as a means to drive growth has never been furiously accelerated as ever before. Eager to stay ahead of fast-changing markets, more and more companies are going outside for competitive advantage but often with disappointing results.During past decades, many researches indicate that (1) imprudent or lack of pre-deal synergy evaluation, and (2) a shortsighted strategic vision as well as (3) poor integration implementation have become the major causes for M&A failure. Along with favorable changes for acquisitions in regulatory environment, the factors other than external economic institutions have been the major ones hindering successful M&A. This paper particularly emphasizes on key enterprise internal factors to study M&A strategy and post integration process.Firstly, after having investigated the enterprise's acquisition motives and the core competence theory, this thesis examines pre-deal synergy evaluation process and focuses on post acquisition integration. The paper builds a synthesis analysis framework which focuses on the post acquisition integration of human resource, organization system, culture and technology. In post acquisition integration, value creation can be realized through effective capability management. According to core competence theory, the paper divides the post acquisition integration model into three layers: core layer, elemental layer, and functional movement layer. The major mission of core layer integration is to manage capabilities; Elemental layer is fundamental for core layer integration; Functional movement layer is the breakthrough point in post acquisition integration. Further, attention is transferred to get general understanding of existing situation of Chinese enterprise's acquisition with Italian enterprise. In particular, Qianjiang Motor succeeded but Haier failed, which incurs in-depth consideration. At last, this dissertation constructs theoretical framework for post acquisition integration process, followed by intensive analysis of cases.The analysis framework of post acquisition integration is described as following:Firstly, the main task of core competence based human resource integration is to keep key employee stabilization. The issue of key employee stabilization will both impact the accumulation and effective connection of knowledge and skills that are carried by individual and organization, and affect the integrity and validity of core competence system. Further, the transfer of capability and resource after M&A can only be achieved when the carriers of core competence are not destroyed. An indication of the paper is that there are three key factors that influence the stability of human resource: human resource crisis management, key staff retention and integration and layoff problems.Secondly, organization integration is analyzed from process reengineering, organizational structure integration and management integration. Firstly, process reengineering entails transforming a series of input into organizational standards, process and mechanisms. Different organization structure will bring different degree of capability and resource transfer. Thus, the first step to integrate organizational structure is to build vertical organization system, to establish vertical report relationship among employees, coupled with tasks and functions of both sides. Companies should make full use of their own advantages to restructure management systems, and pay attention to mechanism conversion and system innovation.Thirdly, the integration efficiency will be greatly impacted by culture issue. Culture integration is the core of post acquisition integration. Researches imply that cultural difference is the key factor that determines if the anticipated target of M&A performance can be achieved. Therefore, to decrease the culture risk during post acquisition integration and to enhance the cultural synergy, the review of culture fit is necessary during the due diligence period. The main content of this chapter includes steps to create culture of competence, the model of culture integration and the role of leadership.Moreover, companies need to build their competitive advantage upon their specific core competencies and their management's ability to use and reconfigure them to create value and quickly adapt to the changing environment. This part aims to developing an integration planning framework based on technology integration.Finally, this thesis aims to enrich core competence based post acquisition integration management through the in-depth cases of Qianjiang Motor and Haier. The research questions involve four aspects: (1) strategic framework, (2) pre-acquisition process, (3) integration process, and (4) acquisition performance measurement. Acquisition motivations are elaborated at first. Target evaluation is to analyze cross-border acquisitions of Qianjiang Motor and Haier. Based on the post acquisition integration framework, integration route selection as well as functional movement layer integration is established. Additionally, it analyzes the integration of Qianjiang Motor and Haier and assesses their performance on the basis of financial statistics.Theory combined with case study is a principle of the paper. Theory has value only through practices. The research of the paper has adequately combined with the first hand materials from on the spot investigations of both Chinese and foreign enterprises. Executable suggestions are presented in the above four fields of post acquisition integration.