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Cultural integration is often not considered or the time necessary for the organization to adapt. Especailly in international expansion, the local culture is often not fully understood. Another common mistake in international expansion is when the acquirer assumes that through the purchase of a local company the products or services of the new owner will be able to distributed at large scale in the new markets thorugh the local entity. Products and services that are successful at the parent company’s other markets may not prove to be successful in other markets and growth opprotunities are often overly optimistic and the related marketing costs or product modification for the local market are underestimated.
IT is a typically a critical integration aspect as it cuts across a variety of employee interfaces; email, instant messaging, video conferencing, data sharing, system access, etc. Mistakes and sub-optimal solutions in this area can create inefficiencies and complex workarounds, cause frustration, and destroy value. It is important to think about creating a good user experience for the employee.
Cultural integration is very common issue with innovative startups being acquired. The capabilties were built often in a unstructured but highly innovative culture and the founders have been an essential element of the innovation. As much as continued growth requires for them to bring in investors, they often resist the change to a more formal strucutre. Giving up autonomy, lack of experience in large organizations and slowing down the decision process by having more formal processes implemented in the new owernship strucutre are areas that founders struggle with. Finding a balance where they can continue to flourish through their capabilities of innovation yet can deliver along the investor’s culture and along KPI’s requires creating a shared vision, mentoring and training. It is also important to establish clear set of expecations not only about business results but culture prior to closing.
Bad cultural analysis, misfits with the objectives that are on the roadmap, not keeping the intel enough or sometime to long so you can’t make a cleat cut with the “before”. Looking at the deal from a financial standpoint uniquely.
From my experience, I have noted that the most atrocious mistakes on PMI were revolving around HR matters notably when it comes to integrate talents from target to the acquirer, not addressing early enough the necessary steps to ensure that identified talents are preserved and retained.
The biggest mistake from my point of you is not to focus on the synergy realization with the synergy areas which were identified. We had cases where the most important factors was leveraging the direct sales channels, but the PMI and the clear focus on this topic failed.
One of the biggest mistakes I have seen is the inability/unwillingness to identify key associates across the ranks and functional areas and to keep them.
Internal problems of the acquired company should first be observed in order not to make hasty decisions
Delaying the assessment of the target company’s and country’s culture can lead to many oversights. A good example is ignoring to assess the common languages capacity among employees who are outside the integration group and then having problems with the communications.
Learning from these common integration mistakes can help organizations approach integration projects more effectively, emphasizing thorough planning, clear communication, and rigorous testing to ensure successful outcomes. To earn money, you can always use – explore the Pragmatic games collection.
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