Mergers and acquisitions takes place the business with the aiming at strategic financial and managerial motives. Most of the takeovers and mergers today are big failure. This article focus on the reasons that are pulling today’s mergers and acquisitions into big failure. Merger happens when company combines with the other and the acquisition takes place when the dominant company takeover the small company. The current articles aims at enlightening the reader about the reasons for failure of merger and acquisition.

Culture Clash

This stands as the major reason behind the failure of M&As today. Most the companies think that culture will iron itself over the period of time but, this does not happen in reality. The policies and procedures adapted from the management of one company will not be in line with the culture of other company. This cultural difference stands as major block between the employees of two companies to work together. Human resource in the company is reluctant to the immediate changes that happen with the merger or acquisition of the company.

Leadership Conflict

This stand as one the major reason for M&A failure from the managerial prospective, the clash of leader ship enters the picture when two equal companies merge together to form a big entity. It is important to manage these leadership differences during the merger. A successful company always looks towards merging with other successful company. If the both the business are big failures, there is no question of merger at all. As the leaders of both the companies have invested their efforts to run the business in the successful path, none of them wanted to comprise on taking the leadership position so, leadership clash is sure shot in mergers and acquisitions.

Strategic Focus

The strategic focus one company is different from the other as they will in line with the objectives of the company. One of the merger company might have been running with the production quality goods to niche group where as other might have concentrated on grabbing the huge mass market by producing goods at cheaper price. Being unable to club the strategic thinking of the leaders of these two companies, a merger or acquisition here is a big failure.

Unable to Understand Business

Most of the mergers and acquisition in the economy fail due to these reasons. This big deals happens at managerial level. When the leader is not able to have due diligence in the aspects like including IT systems, supply chain, customer service and existing contracts before acquiring or merging will end up in a big disaster. The leader should be able the clearly understand the reason behind other firms interest for merger and acquisition before signing the deal.

Eliminate Redundancy

if the acquire is seeking for the takeover of the company to protect the survival of the company from the losses. The acquirer should be able to eliminate redundant process or machines that slows down the productivity of the company. If he fails to do, it is a big disaster again.