Acquisition Integration Approaches

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Mergers and Acquisitions. Explanation of Acquisition Integration Approaches of Philippe Haspeslagh and David Jemison. ('90)

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  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
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The Acquisition Integration Approaches model of Philippe Haspeslagh and David Jemison provides insight and guidance in Mergers and Acquisitions on choosing the optimal integration approach.


In Mergers and Acquisitions, the motto often traditionally was: "Make them like us". Or relatively simple criteria were used to choose an approach. Such as the size and quality of the acquired firm.


Haspeslagh and Jemison (1990) have stated that the approach, which a company should take towards integration, should be understood by considering two (additional) criteria:

  1. The need for strategic interdependenceM&A - Acquisition Integration Approaches.
  2. The need for organizational autonomy.

Four Types of value creation in Mergers and Acquisitions

Obviously, the goal and central task in any acquisition is to create the value that is enabled when the two organizations are combined. There are four types of value creation:

  1. Resource sharing. Value is created by combining the companies at the operating level.
  2. Functional skills transfer. Value is created by moving certain people or sharing information, knowledge and know-how.
  3. Transfer of general management skills. Value is created through improved insight, coordination or control.
  4. Combination benefits. Value is created by leveraging cash resources, by borrowing capacity, by increased purchasing power or by greater market power.

Organizational Autonomy

Haspeslagh and Jemison warn that managers must not lose sight of the fact that the strategic task of an acquisition is to create value. Furthermore they must not grant autonomy too quickly, although obviously people are important and should be treated fairly and with dignity. The need for organizational autonomy can be answered using three questions:

  1. Is autonomy essential to preserving the strategic capability we have bought?
  2. If the answer to question 1 is positive, how much autonomy should be allowed?
  3. In which specific areas is autonomy important?

The Preferred Mergers and Acquisitions model

Depending on the score on the above two factors (see graph), the preferred Acquisition Integration Approaches are:

  • Absorption. Management should be courageous to ensure that this vision for the acquisition is carried out.
  • Preservation. Management focus is: to keep the source of the acquired benefits intact, "nurturing".
  • Symbiosis. Management must ensure simultaneous boundary preservation and boundary permeability, gradual process.
  • Holding. No intention of integrating and value is created only by financial transfers, risk-sharing or general management capability.

Acquisition Integration Approaches Forum
  Combining Integration and Autonomy in Acquisitions
According to the literature on acquisitions, it is...
     
 
  What HRM Theories are used in M&A?
What theories of HRM are usually applied in merger...
     
 
  2 Perspectives on Post-acquisition Integration
One can distinguish two perspectives when discussi...
     
 
  What makes M&A So Attractive Compared to Organic Growth?
I think one reason for the low success rate of M&A...
     
 
  Mergers and Acquisitions in Africa
Mergers and acquisitions are not very common in Af...
     
 
  Do Mergers and Acquisitions Add Value?
As a theory it is expected that the value of the t...
     
 
  Mergers and Acquisitions (M&A) Success Factors
What are the factors affecting the success after a...
     
 
  Reasons for Mergers and Acquisitions?
Please help me understand why any company would wa...
     
 
  Da Annullamento and Da Concambio in English?
I'm writing a thesis degree on Italian and U.S. me...
     
 
  Global Number of Mergers & Acquisitions
How many company M&As are done annually across the...
     
 
  The right Leader during M&A
The role of HR in M&A is important, but the role o...
     
 
  Culture Clashes in M&A
Many studies report that up to 80% of M&A are fai...
     
 
  Increase the role of HR in M&A
Many mergers and acquisitions fail to deliver on t...
     
 

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Expert Tips - Acquisition Integration Approaches Premium
 

Why M&A is not a Strategy

Note that M&A is just a tool to achieve something;...
Usage (application): Mergers and Acquisitions Planning, Strategy
 
 
 

Mergers and Acquisitions: Success Archetypes

According to Marc Goedhart, Tim Koller, and David ...
Usage (application): Mergers and Acquisitions, Strategy
 
 
 

Value Creation in Cross-Border Mergers and Acquisitions

There is a rise in the amount of cross-border merg...
Usage (application): International M&A, Value Creation
 
 
 

Focus Areas after a Merger for Leaders

In McKinsey Quarterly 2006/4 is an article on the ...
Usage (application): Post-merger Integration, M&A, Strategy
 
 
 

Rules for Successful Acquisition Campaigns

In his HBR article "Rules to Acquire By", Pitney B...
Usage (application): M&A, Strategy
 
 
 

Attributes of Success of Successful Acquisitions

In an empirical study of 24 acquisitions, Hitt, Ha...
Usage (application): Strategy, M&A
 
 
 

What are the Key Responsibilities of the Board in M&A?

Cookson (iancookson@gt.com) recommends the followi...
Usage (application): Board Responsibilities, Mergers and Acquisitions
 
 
 

Potential Strategic Objectives of Mergers & Acquisitions

Many mergers and acquisitions are driven by strate...
Usage (application): Mergers & Acquisitions, Strategy
 
 
 

Platform and Bolt-on Acquisitions Types

When it comes to assess a potential acquisition, P...
Usage (application): M&A, Strategy
 
 
 

Communication Strategy Before, During and After a Merger

Of the many complex decisions that senior executiv...
Usage (application): Branding, Communication, M&A
 
 
 

Principles for Successful M&A integration

1. Use a personal touch: One of the most important...
Usage (application): Post-Merger Integration
 
 
 

The Relation Between “Organizational Fit” and Post-acquisition Integration Performance

The term “Organizational Fit” is an important aspe...
Usage (application): M&A Strategy, Post-merger Integration
 
 
 

The Drivers of Merger Success

Many mergers fail. Everybody knows that. Marc J. E...
Usage (application): Post-Merger Integration
 
 
 

Reasons for M&A Failures

Research from Hay Group and La Sorbonne University...
Usage (application): Avoid these Mistakes in M&A…
 
 
 

Cold Hard Facts about Acquisitions

One should recognize some cold hard facts about me...
Usage (application): When you're considering an acquisition…
 
 
 

Guidelines for a Smooth Post Merger Integration

In the article "The Ten Commandments Of Integra...
Usage (application): Integrating an Acquisition
 
 

Resources - Acquisition Integration Approaches Premium

Mergers, Acquisitions & Corporate Control

This presentation is about corporate control and m...
Usage (application): Corporate Control, Mergers and Acquisitions, Anti-takeover Measures, Synergies
 

Best Practices of Merger and Acquisition Integration

Large presentation on Merger and Acquisition Strat...
Usage (application): Mergers and Acquisitions, Strategy, M&A, Integration
 

Organizational Learning in Acquiring Other Firms

Paper by Dima Leshchinskii and Maurizio Zollo stud...
Usage (application): Acquisition Integration, Banking, Mergers, Post_Acquisition Integration, Learning
 

Global HRM in a Globalized World

Presentation that introduces the concept of intern...
Usage (application): Globalization, Global Human Resource Management, International HRM
 

Acquisition Integration Approaches Diagram

Download and edit the 12manage PowerPoint model fo...
Usage (application): Post Merger Integration
 

Strategic Dynamics of Acquisition Integration

Paper by Robert A. Burgelman and Webb McKinney int...
Usage (application): Integration Process, Integration Framework
 
 

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