Merge Ahead Before you go full-speed into a merger, read this.
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The business pages lately have been filled with announcements ofheavily monied mergers--from MCI and British Telecom to aerospacegiant Lockheed Martin-Northrop Grumman. Massive,multibillion-dollar corporations are becoming the norm, leaving anentrepreneur to wonder whether a merger ought to be in his or herplans, too.
But be warned: For every merger that works, there are othersthat fail, and the entrepreneur who rushes into a merger may justbe stepping into despair. Software company Novell Inc., forinstance, never successfully digested WordPerfect (it was spun outlast year to Corel Corp., another software firm); The Quaker OatsCo. couldn't swallow Snapple (which was divested earlier thisyear); and Japanese electronics giant Matsushita Electronics Corp.threw up its hands after several years and disposed of Hollywoodentertainment giant MCA Inc.
Why do mergers go wrong? A large but rarely discussed reason isthat when business marriages are hurried into, sometimes the resultis a loud clash of styles, say corporate culture experts JacalynSherriton and Jim Stern. "[Business owners] focus on thefinancials and usually ignore the potential culturalincompatibilities when considering a merger," says Sherriton."But when troubles arise, often the root is in cultureclashes."
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