Take our free online Merger IQ Test to find out how much you know about merger management.
Once you start the test, you will have only 5 minutes to answer 16 True/False questions.
Good Luck.
The following numbers will represent questions about managing under merger conditions. To reveal a question, click a number, and then answer "True" or "False".
Click "Submit Quiz" when you have answered all 16 questions.
You have 3 minutes and 30 seconds to complete the IQ test.
Question 1:
Moving quickly during merger integration is reckless. It is a critical situation ... there's too much at stake not to take the time to "do it right the first time."
You answered :
Correct Answer: FALSE
The longer you take to integrate, the closer you move to the edge. Disappointing deals correlate highly with slow consolidation.
It is essential, that you combat the natural tendency to study the situation and try to craft the perfect integration plan. There are no perfect solutions in the game of mergers. Only good and timely ones.
Background information: Mergers: Growth in the Fast Lane, pages 7-8.
Question 2:
When the organization has had all it can take and starts to resist, the best strategy is to back off, regroup, and let things settle down.
You answered :
Correct Answer: FALSE
Opposition surfaces as soon as the integration process gets underway. People gripe, whine, and complain about your objectives, as well as the way you are trying to reach them.
These are signals that you are approaching a super-critical junction in the merger integration process. You are approaching the "yield point," one of the make-or-break stages en route to merger success. Everything you have done up to this point is on the line. But if you quit now, you get nothing. Now is the time to hang tough.
Background Information: Mergers: Growth in the Fast Lane, pages 13-14.
Question 14:
Clear indicators of a poorly conceived and badly executed merger include productivity slippage, low morale, lack of job commitment, and loss of loyalty.
You answered :
Correct Answer: FALSE
These are the predictable dynamics that typically come into play during any merger. They are simply signs that a merger is taking place.
Productivity drops because people can't get the answers they need. Employees waste hours thinking, talking, and worrying about the merger. In their frustration some employees may throw up their hands and quit trying. Others will jump ship.
Don't interpret these dynamics as signs that the merger is being poorly executed. The most successful merged companies experienced these pains at some point as they worked through their integration issues.
Background information: The Employee Guide to Mergers and Acquisitions, pages 4-7.
Question 4:
It is important to try to keep people happy during merger integration by focusing on the win-win aspects of the situation.
You answered :
Correct Answer: FALSE
Instead of investing so much mental energy and air time gushing about the "good news," managers would be better off to present a more balanced viewpoint. So be realistic. Far better for you to get employees mentally prepared for the hard work and emotional strain that lie ahead.
Background information: Mergers: Growth in the Fast Lane, pages 17-18.
Question 15:
In order to maintain productivity, management needs to focus attention on re-recruiting those employees in greatest resistance.
You answered :
Correct Answer: FALSE
You can expect a certain amount of resistance from some people. If you focus most of your attention on those employees resisting changes the most, you will, in effect, be ignoring your most talented employees. And ordinarily the most talented group is the first to leave the company. The good swimmers are most likely to jump ship. This can drain your work group of its most capable employees at the very time when you need top performers more than ever.
That's why you should move quickly to re-recruit your best people, not those that are making the most noise.
Background Information: Business as UnUsual, page 9.
Question 6:
It is very important for managers and leaders to make sure they are "politically correct" during the merger integration period.
You answered :
Correct Answer: FALSE
People often tiptoe around one another's egos, trying not to ruffle any executive feathers. Management is afraid of coming on too strong so they go overboard trying not to antagonize anybody. Intent on staging things ever so carefully, they come off the line much too slowly. Valuable time slips away. Mergers cry out for strong leadership and demand more management direction.
Background information: Mergers: Growth in the Fast Lane, pages 19-20.
Question 16:
There are many decisions that need to be made in planning for the integration where cost shouldn't be a factor.
You answered :
Correct Answer: FALSE
A merger is based on a financial proposition, a commercial viewpoint ... it's not a "feel-good" activity. Success is measured in numbers - dollars and cents, cash flow, net worth, stock price, market share, P/E ratio, debt figures, tax savings, and so on. Your job is to help play the financial angles and to help deliver a bottom line characterized by black ink and big numbers.
Background information: Smart Moves, page 20.
Question 8:
One of the most significant reasons many mergers fail is that the organizations do not attain a common culture.
You answered :
Correct Answer: FALSE
Forget about building a common culture. Corporate culture is something you deal with indirectly. You should keep your eyes trained on achieving hard results, rather than letting your attention wander off into the soft, vague fog of culture. Keep the organization on course. Quickly determine the key cultural differences between specific parts of the organization. Then, communicate to your people what the key differences are. Be
up-front. Talk in specifics.
Background information: Mergers: Growth in the Fast Lane, page 15.
Question 9:
With all of the instability that a merger creates, the number one priority should be to stabilize the organization to its pre-announcement condition.
You answered :
Correct Answer: FALSE
During the early months of merger integration, about the best you can do is manage the blur - ride the waves, so to speak, instead of trying to be boss of the ocean. You can't avoid the rough water, so you might as well make the most of it.
Question 10:
The best way for leaders to help people deal with the merger pressures is to temporarily relieve employees of some of their responsibilities.
You answered :
Correct Answer: FALSE
Leaders wish they could do this ... but they can't. Why? Because customers don't care that we're going through a merger.
The strategy of temporarily relieving people of some responsiblities might make employees feel better in the short term, but in the long term, it only puts a team further behind. There is simply more that needs to be done now. Consider an athlete's training program: If he doesn't demand more from himself, how much longer will it take for him to achieve higher goals?
Background information: Business As UnUsual, page 10.
Question 11:
The best indication that a leader is managing a merger effectively is the absence of resistance.
You answered :
Correct Answer: FALSE
Again, leaders wish they could do this ... but they can't. Why? Because resistance is a normal, predictable reaction to a merger, at least for some people. It is important to get resistance out in the open, to talk about it, so that you can work on overcoming it. And keep this in mind ... if resistance is virtually nonexistent, it may mean the organization is too complacent.
Background information: Business As UnUsual, page 9.
Question 12:
When things are changing as fast as they can in a merger, managers need to look for what is going right, not what is going wrong.
You answered :
Correct Answer: FALSE
Ask the team to be looking for the best in the merger AND for what is going wrong. Problems are a normal, predictable part of every merger. Ignoring them won't make them go away; it only prolongs the problem by extending the time it takes to deal with them.
Background information: Business As UnUsual, page 20.
Question 13:
To maintain productivity during mergers, managers need to be more "hands on," providing more specific directions than usual.
You answered :
Correct Answer: TRUE
Who hasn't been frustrated in the past hearing, "Oh, you're still working on that project? Didn't you hear? It got changed yesterday."
Because information, decisions, and directions can change on a minute-to-minute basis during mergers, managers need to spend even more time clarifying work roles, specifically defining each individual's critical priorities, decision-making authority, personal accountability, and performance standards. It prevents wasted efforts by keeping everyone focused on the "critical few" make-or-break priorities.
Background information: Business As UnUsual, page 7.
Question 3:
On average, employees in acquired companies spend about 2 hours per day distracted and worried about the merger.
You answered :
Correct Answer: TRUE
According to a study at Honeywell and other research (Cabrera and Wishard), employees spend roughly one-fourth of the work day obsessing over the potential impact of the merger rather than performing their work. The resulting decline in productivity is especially dangerous because it is not always obvious. Employees may be putting in long hours, but the hours are not spent doing productive work.
Question 5:
One-fourth of senior managers in target companies leave in the first year after a merger.
You answered :
Correct Answer: FALSE
On average, 50% of acquired senior managers leave in the first year after a merger. And three out of four leave within the first three years.
The cost to replace talented individuals may run 50% to 150% of their salaries. Therefore, re-recruitment training will most likely pay for itself many times over if it helps a business retain just a handful of key players that would have otherwise left.
Question 7:
According to a study reported by Harvard Business Review, 90% of senior and middle managers in acquired organizations are psychologically unprepared for the changes in status and organizational structure they encounter following their mergers.
You answered :
Correct Answer: TRUE
Unfortunately, there’s little in the routine day-to-day operations of an organization that prepares managers for managing the kind of corporate upheaval and uncertainty that a merger creates. Even battle-scarred, seasoned veterans can feel like rookies in this situation. A merger is not a good place for a trial-and-error approach. There’s simply too much at stake, including people’s careers. Prior to close, managers should be trained on what to expect and how to get themselves and their teams ready for the M&A challenges that lie ahead.
