Making 1 + 1 = 1

Title get your attention?  Mine too.

The Merger Verger stole it (well, “borrowed” it) from a recent study published by the folks from Knowledge@Wharton dealing with the topic of “identity” as it impacts value creation in the process of a corporate merger.  Authors Hamid Bouchikhi (ESSEC Business School, France) and John R. Kimberly (Wharton) lay out four distinct approaches to identity in the integration process:

  • Assimilation
  • Confederation
  • Federation
  • Metamorphasis

These approaches differ in their degree of retention or replacement of legacy corporate identities and establish the overall framework for the degree and type of integration.

The study is a worthwhile read for all integration practitioners. Click here for the full 24-page study report or here for a shorter write-up on it.  As always, comments welcome.

Aside:

The authors also cite examples of situations where the integration process was pushed ahead TOO fast, a problem that runs counter to the norm (and could be an extremely interesting topic for their next study: when to act the tortoise and when to act the hare).

Quotes:

“For one plus one to make more than two, at the economic level, it is necessary that one plus one make one, at the psychological level.”

The merging of companies will only be successful when the employees of the merged entity “feel a sense of belonging to a single enterprise with which they can identify and to which they are motived to contribute. This is particularly true when one organization acquires a competitor; all of a sudden the enemy is on your side.”

Today’s illustration from my road map collection (no topical rationale).

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