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I know you
don´t like this title, especially if you have been through an acquisition or
joint venture recently, but in several ways a Post-Merger Integration (PMI)
resembles the Colonialism. In both cases we find:
- A clash of
two or more different cultures
- A dominant
and a dominated culture
- A effort to
integrate (or not!) the different cultures
- The
creation of a new nation with (hopefully!) the best of the mix of cultures
We can use
the history of the Latin-American colonies (being from around here, it is the
best I know…) with a PMI. I´ll try to illustrate it:
- There is a
person in the organization that is convinced that we should explore and acquire
another company, because it will bring us a lot of benefits. His or her work is
to try to convince the board that the company should pursue such opportunity
(like Christopher Columbus did with the Spanish Queen pursuing another way to
go to India).
- We arrive
to our target company, explore and show to the management the richness of the
new territory (at this point, our Christopher Columbus showcases the
opportunties of the discovered territory, in other words, what he found using
the data room).
- We decide
to conquer (or buy, in other words) and we approach the new territory.
Normally, little effort is done at this stage to understand the culture of the
acquired company (our Hernán Cortés or Francisco Pizarro decides to conquer the
new territory and to get the most out of it).
- We do the integration, and expect to extract the treasures of the new
territory (sinergies). At this stage, we can approach the PMI in several ways
(as a comparison, I will use part of the glossary shown in the paper “A Definition of Colonialism” by Ronald J. Horvath):
·
Domination: is the control by individuals or groups over
the territory and/or the behavior of other individuals or groups. It means, which is the dominant and dominated side of the merger
equation.
·
Intergroup domination: is the domination process in a culturally
heterogeneous society, intragroup domination that
in a culturally homogeneous society. Typically,
it is an intergroup domination.
·
Colonialism: is that form of intergroup domination in
which few, if any, permanent settlers in significant number migrate permanently
to the colony from the colonizing power. In the comparison, we send a
big group of C-level and workers to dominate the new company with the culture
and way of doing things of the acquiring company.
·
Imperialism: is a form of intergroup domination in which
few, if any, permanent settlers from the imperial homeland migrate to the
colony. I.e. we send some C-levels to control the new company.
·
Administrative Imperialism: refers to that form of intergroup domination
in which formal (direct) controls over the affairs of the colony exist through
a resident imperial administrative apparatus. We send a CEO and its C-level
from our ranks, in order to control the operation.
·
Informal Imperialism: is a type of intergroup domination in
which formal administrative controls are absent and power is channeled through
a local elite. We convince the current leadership, or a new
one, to manage the company in the way we defined.
We expect
that at some point, the different cultures merge in a new one, the colony gains
its freedom and become a prosperous and independent country that may be part of
our administrative Empire... In what type of PMI have you have been through?
