There are many advantages when two companies merge to become one entity or when one business acquires another. Assumed cost reductions, economies of scale, an increase in market share and access to a wider consumer base are just a few of the reasons that mergers can be an attractive proposition. However, the process of merging and acquiring can be very challenging as leaders are confronted by numerous pitfalls along the journey.
Not Conducting Comprehensive People Due Diligence
One of the common mistakes that buyers make when they are keen to seize an opportunity is neglecting to comprehensively undertake people due diligence. This can lead to making assumptions regarding employment instruments, industrial relations environment, OHS and wellbeing status, leadership capabilities, remuneration arrangements and more. The potential outcomes of neglecting people due diligence are higher legal costs, dissatisfied shareholders, stressed out employees and a drawn-out process that doesn’t end up being as beneficial as expected.