Stonehouse et al. (2004)

Management > Global Strategic Management > Lectures > Independent Research > Stonehouse et al. > Alliances/Integration > Transnational M&A > Problems with integration

Problems with integration

More fail than succeed, as the post-integration organisational performance was not as hoped. The problems with integration are as follows:

1. Lack of research into the internal and external environmental features of the target company
2. Cultural incompatibility, especially if the integration was cross-border
3. Lack of communication within and between the two firms
4. Loss of key personnel in the target company
5. Paying too much for the acquired company, as this overly exposes the new firm to financial risk
6. Assuming the growth target company's market will continue indefinitely - trends fail

Legislative/regulatory changes can also cause failure, though this is outside the control of the company

Success factors

Collaborative ventures and strategic alliances

Types

Successful alliances and networks

Strategic management of networks and alliances