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Managing International Projects: Module 3 -- Mergers & Acquisitions…
Managing International Projects: Module 3 -- Mergers & Acquisitions
Define Mergers & Acquisitions
(m&a) - general term used to refer to the consolidation of companies: a merger is a combination of 2 companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed
Gain access to increased market share
Obtain skills not available within the organization
Leverage joint skills to develop new products
Obtain products to complement product line
Buy out a competitor
Synergy, diversification/sharping business focus; increase supply-chain pricing power; acquire a new technology or method of operation;acquire specific talent/staff reduction
Mergers:
two companies of similar market size & complementary products or skills combine to produce a larger company serving the combined market base
Market-extension merger
Product-extension merger
Vertical Merger
Conglomerate
Horizontal merger
What are the implications for projects? Consider: Risk, staffing, morale, financial, scope, nature and communications
What about spin-off?
What are the implications here for projects? Type of projects, impact on the teams, issues to be faced
Example of merger:(technology merged with manpower)
Losses: morale, impact on careers, salary potential and day to day environment
Gains: larger market share
Multinationals - difficulties in different geographic regions
What are the benefits?
Acquisitions
- one company, usually larger & more powerful, acquires another, usually smaller or less powerful
Different technical spaces & what other difficulties?
How can Project management help with mergers & acquisitions
Main Purposes of International Projects
: International projects reach beyond national boundaries, usually in terms of project purpose or nationality of stakeholders. International projects can be global, involving the entire world.
Access to scarce and unique resources
Reduction Risk
Realization of efficiency gains
Increase of global market share, market power, global political power of global effectiveness
Search for new geographical presence or new international stakeholders
Common Challenges
Time zones, work week/holidays and sense of time
Leadership, teamwork and social styles differences
Communication & information sharing (protocols, styles, logistics)
Political, historical, religious, regulatory, environmental issues
Interacting with superior, subordinates, stakeholders
Contracting & payment arrangements
Divergent attitudes & work styles
Measurement systems
Multiple languages & Cultures
Differences in PM methodolgy
Cultures with impact on International Projects
National Culture: sub-culture/sub-culture/sub-culture
Individual (human nature, personality)
Professional/functional Culture
Organizational Culture (corporate culture) sub-culture/sub-culture
High complexity, high risk
Different political, regulatory and economic settings; health, climate and environmental conditions; typically high project visibility
Limited control and monitoring due to distance, time zones, independence, etc.
Multiple language, cultures, religions, multiple practices, methodolgoies, range of(possibly conflicting) expectations and priorities
Meetings of Project Teams "Cross Company" - at least some project teams will include members from both companies
Goals will not be relaxed due to integration
Outcomes will be highly visible
Team Situation: Consider the differences faced by international teams (from co-located teams) Which will impact the merger/acquisition teams?
Recommendations for Communicating
Paraphrase in intercultural conversations, encouraging your counterpart to do the same with your input
Important international business communications by telephone should be confirmed by e-mail
Oral Presentations should be made plainly, clearly (and slowly) using visual aids whenever possible
International meetings should be facilitated with a written summary
Do not tell jokes (perhaps poking fun at self ( yet be mindful some hierarchical cultures do not find laughing at oneself to be funny and may consider that poor and incompetent leadership)
Seek understanding first, rather than quick actions or decisions
Why did he/she do that?
What was his/her objective?
When incongruous or unexpected behavior occurs, ask yourself:
How would he/she achieve that objective?
How can I make my objective clear to him/her? How could my words/approach be interpreted?
Look for related issues & address together whenever possible...usually some interconnection
Be the source for issue communication to sponsor, functional manager or other stakeholders
Project Manager Advice
Can the project help to integrate the processes & cultures of the two organizations?
Understand why project was undertaken and be able to communicate rationale in a way that is positive within both cultures
Be able to concisely show value of project to both participating organizations in terms meaningful within respective culture (communication & values)
Know your project vision -- what is desired outcome?
Understand and communicate impact on different stakeholders
Involve the team in defining goals, scope and approach
Risk & Appetite & Management: Leading International Projects in an M&A Environment
Indirect & virtual leadership skills play an important role
The "merged" project manager has to lead heterogeneous stakeholders in a sensitive and creative way.
leading international projects means spanning cultural, organizational, geographical and time boundaries - are there differences in nature or degree for mergers/acquisitions
Leading merged projects means influencing, motivating and enabling project members from different corporate cultures
Challenges of leading international Projects
Context of leading International Projects
Temporal dispersion
Organizational dispersion
Geographic dispersion
Cultural dispersion