2 December 2011
The results of the ManMAP research project suggest that too little attention is paid to the integration phase of an acquisition process.
As companies face changes in their business environment, restructuring through business acquisitions can represent a survival strategy. However, successful restructuring is a challenge. ManMAP, a joint research project of Turku School of Economics at the University of Turku and VTT Technical Research Centre of Finland, set out to discover how the different stages of a business acquisition, from decision to integration, can be strategically implemented in order to secure continuity of business operations.
The research also provided tools for the management of business restructuring. Special attention was paid to strategic decision-making and risk management from the viewpoint of creating new business.
‒ Our aim was to describe the critical points of a business acquisition process, says Mélanie Hassett, Post-doctoral Researcher in International Business, who participated in the research project.
According to the research results, ideas for new business originate both inside and outside a company.
‒ With only a few companies systematically seeking and identifying business opportunities, there is certainly room for improvement, Hassett states.
Companies often apply systematic processes to business acquisitions. In particular, the initial stages, i.e. the negotiations and the evaluation of the acquisition target, are generally well-thought through. However, the post-acquisition integration stage is usually less structured.
‒ Integrations are often managed case-specifically. This is partly due to the characteristics of individual business acquisitions. Another possible explanation is lack of resources.
In addition, the researchers argue that discontinuity poses a challenge to business acquisition processes. This is manifested, for example, by changes in persons in charge at different stages of the process.
Some of the ManMAP research results have been published in M&A as a Strategic Option – From opportunities to new business creation. The main financier of the ManMAP project was Tekes, the Finnish Funding Agency for Technology and Innovation. The research was also funded by VTT Technical Research Centre of Finland, the University of Turku, and the case companies Tieto Oyj and Outokumpu Oyj.