Strategic Corporate Communications in Mergers & Acquisitions

Strategic Corporate Communications in Mergers & Acquisitions

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Inhaltsangabe:Summary: MaA transactions and corporate change are frequent occurrences in the globalized economies of today (c.f. section External growth and communication as global trends , page 1). On a global scale, led by the U.S., the European Union and Germany, MaA transactions have clearly become a global mega trend. Despite their growing popularity, MaA transactions often fail to produce the desired outcomes (c.f. section MaA Failure and Corporate Communications , page 5). This is partly due to poor MaA communication. The study at hand has several aims: To discuss the significance of MaA communication for the overall success of a transaction To establish the general determinants for the quality of MaA communication The key success factors To examine the individual determinants The factors determining the quantitative and qualitative deployment of MaA communication and its adjustment to the varying preconditions of different transactions Secondary as well as primary data led to the conclusion that MaA communication is of high significance to the success of an MaA transaction and can impact its results. Even if MaA communication can never be the single most important factor, determining merger success or failure, corporations acknowledging the significance of best-practice MaA communication have a higher MaA success probability and avoid opportunity costs. As described in more detail in section The significance of MaA communication for the overall success of a transaction , page 51, MaA communication derives its significance from the functions it fulfills. In the course of the interviews, those functions could be identified as reputation function, manipulation function, information function, acceptance function, action function, security function, and motivation function. In the context of post-merger integration communication, especially the possibility to decrease employees level of change resistance, uncertainty, frustration and demotivation is of particular value to transaction success. Even if communication per-se is a qualitative, not a quantitative factor, the study at hand concludes that there are ways to assess and evaluate communication success. If communication is ranked against what communication can possibly accomplish, communication success can be defined and measured (c.f. section The assessment of MaA communication success , page 57). As communication is significant to MaA transaction success and as communication success is measurable, the following part of the study focuses on general determinants and indicators, determining MaA communication success. It is found that there are five key-success factors, essentially determining MaA communication success (c.f. section The general determinants: Key success factors of MaA communication , page 63): Communication controlling Communication consistency Strong argumentation construct Communication support Communication integration and communication teams Those factors are of utmost importance to communication success but are independent from the structure of a given transaction. It is thus necessary to turn to a second group of factors, the individual success factors, which determine how a communication strategy has to be adjusted to the preconditions of a particular transaction in order to meet the requirements of the key success factors ( c.f. section The individual determinants: Determinants fort he quantitative and qualitative deployment of MaA communication , page 71). With regard to the outcomes of the primary and secondary research, conducted, the author could conclude that those individual determinants are: Transaction size The desired level of integration The desired level of control The quality of the transaction The shareholder structure Those factors serve as contributions or constraints to MaA communication success and determine the appropriate communication strategy. Taking into consideration the results of this study, the author is able to give several recommendations: MaA communication is a powerful tool to increase the success probability of MaA transactions. As its benefits by far outweigh its costs, it should be an integral part of an MaA transaction regardless of size, intention or structure. MaA communication on the other hand, should not be overestimated. The quality of the transaction itself has to match the transaction motives. Communication can not make up for structural weaknesses of the transaction and any successful MaA communication requires the backup of strong arguments. If MaA communication should unfold its full potential it has to be done right. There is a price to be paid if MaA communication is implemented poorly or not at all. It is thus advisable to deliberately plan MaA communication and to use the resources provided by MaA communication professionals. Table of Contents: I.DisclaimerII II.AcknowledgementsIII III.ForewordIV IV.Executive SummaryV V.Table of ContentsVII VI.Table of FiguresIX VII.Research Report1 1.Introduction1 1.1External growth and communication as global trends2 1.2MaA Failure and Corporate Communications6 1.3Aims and objectives8 1.4Conceptual approach and general structure of the work9 1.5Limitations and focus of this study12 1.5.1Conceptual limitations/focus12 1.1.2External constraints12 1.5.3Research Limitations12 1.6Terminology13 2.Literature Review14 2.1Sources of literature14 2.2Quantitative and qualitative evaluation of existing literature14 2.3Deficits of existing literature and implication for this study16 3.Research methodology17 3.1Time frame17 3.2Secondary research17 3.3Primary data18 4.Outcomes of the study19 4.1The nature of MaA communication21 4.1.1The free market for corporate control21 4.1.2Mergers and acquisitions defined22 4.1.3The aims of MaA transactions23 4.1.4The MaA process25 4.1.5Corporate Communications defined27 4.1.6Corporate Communications success and the aims of corporate communications28 4.1.7The communication process30 4.2Strategic Communication in Mergers and Acquisitions36 4.2.1MaA Communication and time36 Communications36 Communications36 Communication37 Management38 4.2.2MaA Communication and the transaction framework38 type42 markets and legal aspects - stock exchange disclosure rules44 consultants46 4.3The significance of MaA communication for the overall success of a transaction54 4.3.1The significance of external communication55 4.3.2The significance of internal communication58 4.4The assessment of MaA communication success60 4.5Limitations of MaA communication63 4.5.1Structural limitations of MaA communication63 4.5.2External limitations of MaA communication63 4.5.3Communication Myths - A critical approach to the role of MaA communication64 4.6The general determinants: Key success factors of MaA communication66 4.6.1Key success factors of MaA communication - Literature research67 4.6.2Key success factors of MaA communication - Interviews70 4.6.3Key success factors of MaA communication - balanced evaluation72 4.7The individual determinants: Determinants for the quantitative and qualitative deployment of MaA communication74 4.7.1The individual success factors as constraints or contribution to MaA communication success74 4.7.2The individual success factors as indicator for the appropriate communication strategy76 4.8Planning the implementation - the link to the operational level79 5.Conclusion and recommendation81 IX.Glossary83 X.Bibliography of references86 Books86 Newspaper/Magazine Articles88 Research Reports89 Internet Documents90 Interviews91Corporate communications is the tool to reduce the agency problem, the principal a€“ agent conflict13, and to reduce agency ... John; a€œAuditing a€“ Theory and Practice a€; Prentice Hall 1996; pp. 3-5 1.2. Maamp;A Failure and Corporate Communicationsanbsp;...

Title:Strategic Corporate Communications in Mergers & Acquisitions
Author:Tobias Herdt - 2003-06-30


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