As merger mania picks up once again, it may be worth taking a brief look at a major reason why it seems to have such a poor track record. There are several of these on offer, of course, but most of them tend to critique the approach that was used to justify the move to merge in the first place. They suggest that the numbers weren’t crunched correctly, or that the “synergies” weren’t properly assessed or their integration executed. These criticisms, then, are simply a sort of “re-do” of the original decision criteria, aided by hindsight, but using the same mind-set to assess that was used to produce them.
What they generally don’t do is examine the situation to see if it might offer a new perspective into the reasons for these failures.
Fortunately, there does appear to be a slowly growing awareness that, as in other areas, number-crunching isn’t the be-all and end-all of managerial decision-making as it is thought to be by the many expensive MBAs promoting action on the basis of such analysis. Management is considerably more difficult and substantial an enterprise than this, and no amount of clever sifting of the hard data, or shuffling or stacking of the deck, will alter that; this is a basic truth that will always stalk those who yield to formulaic approaches such as these which, however superficially sophisticated they may appear, are nevertheless, at bottom, utterly simplistic and often just doomed to failure.
Possibly the most obvious example possible of this is in the tangled governmental and political mass of conflicting interests and cultures that bedevil Airbus, the European airplane manufacturer. It’s far from the only good example, though – the Chrylser/Mercedes Benz pseudo-merger might be more familiar to many.
But it should be borne in mind that this sort of thing happens everywhere organizations ponder moves based on “hard figures” rather than on the complex – sometimes combustible – mix of art and science that management really is.
Examples abound everywhere in the world, and in every type of organization: commercial, not-for-profit, government – even military. An organization isn’t a machine. It is an expression of the human aspirations that give rise to it and that give expression to its operation. Management must take this into account in a serious manner in order to be taken, itself, seriously.
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