【正文】 W W W . W A T S O N W Y A T T . C O M Kwan Chee Wei Director Human Capital Group Watson Wyatt Singapore The Importance of Cultural Integration in Mergers and Acquisitions Agenda M A Statistics A Case Study WW’s Approach to Cultural Integration What is Culture? Q A 2 Agenda M A Statistics A Case Study WW’s Approach to Cultural Integration What is Culture? Q A 3 ‘Cultural People’ Issues Often Present the Biggest Challenges “The hard stuff is easy it’s the soft stuff that’s so hard to change.” Frederick Smith CEO, Federal Express 4 Watson Wyatt M A Survey 1998 (190 CEOs, CFO, Top Executives) ? 75% are clearly disappointing or outright failures Source: Watson Wyatt Worldwide MA Survey, November 1998 ? 50% suffer an overall dropoff in productivity in first 48 months ? 47% of acquired pany executives leave within the first year。 75% within the first three years ? “ People problems” are cited as the top integration failure factor by a sample of 45 CFOs from Fortune 500 panies who have recently merged/acquired ? Only 23% of all acquisitions earn their cost of capital ? On average, management grade the financial performance of their alliances as a “C minus” (on a scale of A to E) 5 Corporate culture is identified as one of the most important integration issues Source: Watson Wyatt Worldwide MA Survey, November 1998 Activities required for “successful” integration Downsizing Redeployment of workers Recruitment of new staff Retraining workforce Alignment of p ben prog Labor relations Managing resistance Integration of corporate cultures Retention of key managers Retention of key talent Communication 37% 40% 59% 57% 36% 63% 78% 88% 91% 90% 0 10 20 30 40 50 60 70 80 90 100 36% 6 Cultural inpatibility is the biggest problem, yet results indicate that it is the area least likely researched during due diligence. 46% 47% 54% 56% 72% 72% 82% 86% 0 10 20 30 40 50 60 70 80 Organizational culture and dynamics of change Workforce potential HR policy matters Major shareholders Management capabilities and willingness to cooperate Financial aspects of HR function Market share, distribution Hard assets 90 100 Technological and business petencies 75% Percentage of panies citing the type of information gathered during due diligence Source: Watson Wyatt Worldwide MA Survey, November 1998 7 Reasons for successful integration Source: Watson Wyatt Worldwide MA Survey, November 1998 Percentage of panies citing reason for success 8% 41% 31% 37% 52% 70% Shared responsibility of costs involved Early mgt of “What will happen to me?” employee issues Cultural patibility Mutual agreement of road map by partners Expedient integration Well planned munication throughout the deal process Leadership 0 10 20 30 40 50 60 70 80 90 100 35% 8 Additional M A Statistics ? 1992 (Coopers Lybrand) : In 100 failed or troubled mergers, 85% of executives who were surveyed said the major problem was differences in management style and practices. ? 1996 (British Institute of Management) : reported the difficulties involved in merging two cultures to be a major factor in M A failures. ? 1997 ( Kearney) : reviewed 155 M A deals and determined most failures to be peoplerel