Risk Management Resources
  

Integration Key When Merging Business with Smaller Innovators
Be Prepared for Route Changes When Driving Company Toward Merger
One of the Costliest Risks is Acquiring an Unknown Culture
Choosing an Ethical Partner Requires a Deeper Look
Benchmarks for Truth-Telling: Transparency, Full Disclosure, Timing
Keeping Secrets and Telling Lies. A Sure Recipe for Problems
Integration: Which Process Survives When Two Become One?
The Business Case for Change  is That It Has to be Worth It.
Managing People-Related Risk Requires Managing Expectations
When it comes to Cultural Alignment, Don't Force the Fit
Building Strong Relationships Critical to Building Strong Companies
The Financial Cost of Workplace Conflict
Keeping Newly Merged Leadership Teams Healthy Requires Awareness
Integrating Company Cultures Effectively Requires Employee Buy-In
Disaster Recovery Planning
"Risk" Is A Four Letter Word, But Doesn't Have To Be
Falling for a Pretty Face Could Lead to Future Marital Problems
Speed Dating Increases Merger Acquisition Risk
Cultural Integration can Be a Difficult Goal to Accomplish
Acquiring Patents in an M&A Transaction
Drug Testing and Employee Screening Essential to Risk Management
Bad Hires are Always Bad News
Buyers and Sellers Should Know Tax Implications of the Deal
Common Information Technology Merger Mistakes
Define Company's Culture to Avoid Post-Merger Clashes
Stabilized Value Key Tactic to Avoid Lost Clients After Merger

Increasing Productivity May Prevent Having to Cull the Herd

M&A Experts Agree...Due Diligence May Miss Significant Risk

Cultural Misalignment: The Unmeasured Risk in M&A Deals

Managing Organizational and Project Risks

 

 

 

 

 

 

 

 

 

M&A Risk Management

M&A Failures

One of the shared characteristics of failed mergers and acquisitions is that the merged company tends to lose value in a relatively short period of time following deal close and the decline in performance tends to be dramatic.  For half of these companies, the decline occurs so quickly that the value of the merged company a year following deal close is less than the combined value of the two companies at the time of the deal. This poor financial performance defies logic since the business marriage was the result of two financially healthy companies with a strong track record.

Interrelated Risks

Dominoes, Risk Management in Houston, TX

The research points to an element of risk that changes the approach taken to risk management with M&A transactions.  The element of risk that poses a challenge for managing the integration of business operations is the high degree of interrelated risk.

When one risk is triggered, it tends to trigger additional risk exposure in one or more related areas which, in turn, triggers risk exposure in other related areas causing a chain reaction of events like falling dominoes.  The impact is sequential, simultaneous, and cumulative creating relentless downward pressure on the key performance indicators.

This phenomenon places management in a reactive posture directing more and more time and attention to the recovery of internal operations and less and less focus on the business strategy until the strategy must be significantly altered or abandoned altogether.

Traditional Risk Management Doesn't Work

The traditional approach to risk management is to identify the risk exposure and the level of exposure and then determine what risk must be avoided, what risk may be transferred, and what risk can be tolerated.

What appears to be a cost-effective approach is an ineffective approach with these transactions because an isolated risk, viewed as insignificant in terms of its singular impact, could set into motion a series of events with a significant cumulative impact.  As a result, effective risk management necessitates a comprehensive approach in which all identified risk must be mitigated.

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Dominoes, Risk Management in Houston, TX

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