Analysing The Effects Of A Realistic Merger And Acquisition On Attitude And Behaviour Of Employees In India

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TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

Background1

Introduction1

Theoretical framework2

Problem statement3

Research aims & objectives3

Research Questions4

Hypothesis4

CHAPTER 2: LITERRATURE REVIEW5

Cultural factors in mergers and acquisitions5

M & A impact6

Cross-culture conflicts in M&A7

Social identity approach7

Employee identity9

CHAPTER 3: METHODOLOGY12

Overview12

Data collection (Web based survey)12

Sampling and size12

Data analysis13

Limitations13

Ethical consideration14

Gantt chart14

REFERENCES16

APPENDICES24

Questionnaire24

CHAPTER 1: INTRODUCTION

Background

Mergers and acquisitions are becoming more and more common, especially where multinational corporations are concerned (MNC's). M&As also offer the opportunity to establish an economy of great scale and scope which inadvertently allow the newly formed company to have a large, potentially more powerful market strength. Despite the general feeling that the mergers and acquisitions are well thought-out to be somewhat risky, it is widely recognised that the recent dramatic rise in strength of the global market is largely due to the vast number of M& A's that have recently taken place. However one was to analyse the statistical information of companies formed as a result of M&A's it can be seen that not everything has been plain sailing (Deal & Kennedy 2007, p.24).

Introduction

During the past decades, we watched a great surge of merger and acquisition (M&A) activities worldwide, including the India. The total volume of M&A rose at an average annual rate of20.8 percent between 2005 and 2010. The value amount of M&A worldwide has been steadily increasing from less than 0.5 trillion at 1990 to 3.5 trillion at 2010, according to the Mergers & Corporate Transactions Database of Thompson Financial Securities Data Co.

The same database shows that about half of the worldwide M&A was involved in Asian companies at 2010. The total transaction value of M&A that global companies were involved in at 2010 was $1.75 trillion, a new record high that is more than 12 times larger than the 1991 figure. The number of deals, as well as the actual dollar amount of M&A activities, has consistently increased during the past two decades. Despite its popularity among business organizations, decades of studies have consistently shown that about 60 to 80 percent of all M&A are financial failures when measured by their ability to outperform.

Theoretical framework

Additional evidence of the high failure rate of M&A is provided by Deal & Kennedy (2007) who found that of 168 deals between 2000 and 2010, two-thirds of M&A underperformed in the stock market. Similarly, Business Week reported that half of 150 big deals worth more than $500 million eroded shareholder returns. Why does more than half of M&A fail to meet their initial expectations, and sometimes perform at levels that are even less than market average?

To answer this question, academic studies have tried to explain the motives and success factors of M&A in several ways such as economic, financial, strategic, or human resource perspectives. Studies based on economic or financial perspectives were mainly interested in pre-merger conditions such as the size of the premium or the existence of multiple bidders, while the human resource perspective and some strategic perspectives were more interested in ...