Why do Companies Continue with Mergers and Acquisitions when so many Fa

Why do Companies Continue with Mergers and Acquisitions when so many Fail? The phenomenon of mergers and acquisitions (M&A’s) triggers an array of opinions and viewpoints. Often it is a strategy that is seen as a perfect way of achieving growth. It is by no means an organic or natural route to success, but has tended to be a quick and easy way of increasing an organisations size and power. However although there have been ‘waves’ of popularity and success since its introduction in the 1960’s it has also suffered criticism due to the number of failures it has accounted for. Despite the strong suggestion that this strategy has been the architect for many an organisation's downfall there still remains a propensity in the current business environment for managers to adopt it. Throughout this essay I am going to examine some of the areas that explain M&A’s volatility and attempt to discover why managers are persevering with the strategy when it is seemingly flawed. Over the last few decades it has become increasing apparent that the effect of mergers and acquisitions is not as beneficial as once thought. When the growth strategy was pioneered in the middle part of the nineteen hundreds it was looked upon as a way of creating an empire across different sectors and countries. Many experienced managers were sucked into the strategy, only having eyes for the apparent synergistical and positive affects of M&A’s. Although over the following years there has been many success stories concerning M&A’s, when the big picture is examined it displays a more ugly side of the phenomenon. Hodge (1998) discovered that ‘in the go-go ‘80s, 37% of mergers outperformed the average shareholder return in that period; in the fi... ...nal, Autumn; Customer text-section 2, topic 11. - Kieran et al (1994) ‘Planning the deals that generate value and gain advantage’, Mergers and Acquisitions, March-April; Custom text, topic 12. Journals - Doitte S & Smith G (1998). ‘The morning after (avoiding mistakes in acquisitions and mergers)’. Winter v63 i2 p32(8). - Davenport, T (1998). ‘The Integration Challenge (managing corporate mergers’ Management Review. - Heitner M (1998). ‘The thorny business of merging rival firms’, Mergers and Acquisitions. - Hodge, K (1998), ‘The art of the post deal (outcomes of mergers)’. Management Review. - Price, A & Sloane, J (1998). ‘Global Designs: Tough Challenges for - Acquirers’. Mergers and Acquisitions.. - Whipple J & Frankel R (2000), ‘Strategic Alliance Success Factors’. The Journal of Supply Chain Management.