Mergers and Acquistions: Causes of Failure

According to the exact meaning of the word, the term M & A represents two different situations. Merger is to integrate two or more companies into a new company and acquisition is a company that buys a majority of shares from other companies (Bressmer 1989, Pausenberger 1990, Brauchlin 1990). Therefore, the characteristics of mergers and acquisitions are that the number of companies after unification is smaller than before. However, even after the acquisition, the target company may be autonomous or may remain partially or fully integrated with the new parent company.

In this article we analyze various factors that may lead to mergers, acquisitions, and especially joint ventures. In fact, in this article we are analyzing a statement that it will reach a certain conclusion that "employee-related issues often interfere with the success of mergers and acquisitions." In this paper, employee-related issues are adversely affected in this kind of cooperation, but these problems are inefficient due to inability to manage change, inefficiency of personnel policy and practice, clear objective It is a result of practice. These factors include lack of trust and differences in intended goals.

M & A has been severely affected by cultural problems, and M & A has failed as much research has been done to investigate cultural and human problems so far. The result shows that up to 65% of failed M & A is due to cultural and human problems. In this research, we investigated the intercultural differences that affect the confusion of communication and the productivity of the whole organization (Chatterje et al 1992). Other researchers also support this reasoning and believe that non-conforming culture is the main reason for failure of M & A. Cartwright and Cooper (1993) notes that the company's expectations for mergers and acquisitions can not be realized due to incompatibility of merger organizational culture, taking into account that cultural issues are the cause of low success rate Pointed out.