Introduction

This article examines the extent to which organisations address issues of corporate identity and corporate communications
during the various stages of mergers and acquisitions and the effect this has on the result/outcome of these "business
marriages". The broad hypothesis underpinning this article is: "Management time and attention to best practice in corporate
identity and corporate communications increases the chance of a successful merger/acquisition".

Recent research undertaken by Mercer Management Consulting (1997) indicates than an alarming 48 per cent of mergers
underperform their industry after three years and that failure to unlock value is often due to poor implementation of mergers .
The research therefore had a sub-objective of establishing the main reasons why mergers fail, and to what extent this could
be attributed to a lack of attention accorded to corporate identity and corporate communications.

Among the authors' major findings are that a long-term approach to mergers may lay sounder foundations for the post-
merger company than the more frenzied short-term approach familiar to the UK, and that congruent corporate
communication is an essential element of effective corporate identity management. The authors conclude that a commitment
to effective management of corporate identity and communication should be treated as a key element in the successful
implementation of mergers and acquisitions, particularly given the amount of confusion, uncertainty, and media attention that
tends to surround such events.

A similar finding was found by Professor Sirower of New York's Stern Business School (Morgenson, 1998) who, in a large-
scale study found that roughly two-thirds of mergers left shareholders relatively worse off. Other studies and reports also
paint a negative picture of the resultant effects of mergers (Bleeke and Ernst, 1993; Kitching, 1987; Porter, 1987).

Merger mania: an overview

The phenomenal growth of mergers and acquisitions over the last year is a characteristic of the current business
environment and appears to have impinged on every industry and country: even within mainland China there are examples
of merger activity. Few sectors are immune to the wave of consolidation sweeping the global economy, impinging on both
the private and public sectors. This trend is particularly acute in sectors such as petroleum, pharmaceuticals and financial
services. The trend is also global, for example: in the UK Lloyds and TSB, Commercial Union/GA, British Petroleum and
Amoco; in mainland Europe UBS/SBC (Switzerland, Pharmacia (Sweden) and Upjohn (USA); in North America Citicorp with
Travellers Group (USA), Bank America and Nations Bank. The main drivers of such activity are industry consolidation,
economies of scale, cost saving, synergies in distribution, synergies in marketing, economic factors and so on. The following
serves as a brief overview of the key drivers of merger and acquisition activity in five major sectors: financial services, airline
industry, aerospace and defence, pharmaceutical, and food and drink.

Key drivers in M&A activity

The international financial services industry is reshaping into one where it appears there will soon remain a handful of
extremely large companies, supplemented by a number of niche players, but with little scope for the existence of medium-
sized firms. The merger of Swiss Bank Corporation and Union Bank of Switzerland at the end of 1997 was the biggest
merger in a sector transformed by a recent wave of mergers and acquisitions.

The airline industry is a highly competitive industry with low margins and huge capital costs, and subject to vagaries in the
global economy such as the Asian crisis, or to political events such as the Gulf War. This sector is characterised by the
creation of alliances rather than formal mergers, due to the attention of legislators anxious to prevent the emergence of
monopolistic global firms.

In the aerospace and defence industry, the end of the Cold War and the resultant reduction in defence spending has led to a
polarisation in the fortunes of the two sectors since the end of the Cold War. NATO members' defence budgets have fallen
considerably since the end of the Cold War while manufacture of passenger aircraft is booming. Merger activity in the
defence sector especially is constrained by governments' reluctance for political reasons to collaborate with foreign-owned
companies, although Lockheed Martin is an example of a recent merger driven by consolidation due to increased
development costs. The recently mooted merger between British Aerospac e with GEC reflects British and European
attempts to compete effectively against their North American competitors.

The trend among pharmaceuticals companies over the past three years to merge appears to be a means by which they can
offset the huge costs involved in developing new drugs, a period which has seen the mergers of Glaxo with Wellcome,
Pharmacia with Upjohn, and Sandoz with Ciba to form Novartis. More merger activity in this sector is anticipated.
Cost savings, and synergies in marketing and distribution, appear to be the key drivers of M&A activity in the food and drink
sector. The Pounds 32 billion merger in 1997 of Guinness and Grand Metropolitan to form the controversially named Diageo
should act as the catalyst for further consolidation within the alcoholic drinks sector.

Corporate identity/corporate communications explained

The nascent field of strategic corporate identity studies (Abratt, 1989; Balmer, 1995, 1998; Gray and Balmer, 1998; Van Riel
and Balmer, 1997) views corporate identity as referring to those attributes which make an organisation distinct or, explained
differently, refers to "what an organisation is". Typically, corporate identity is seen to be multi-disciplinary in perspective
which embraces a number of management disciplines including corporate communications, corporate image and reputation,
corporate strategy and organisational structure and organisational design. As such, the authors suggest that both
companies, when considering a merger, should address the following questions of themselves and of their partner company:

- Where have we come from?

- Why are we here?

- What are we now?

- Where are we going?

- What do we want to be?

Corporate identity, because is transcends disciplinary boundaries is, therefore, particularly efficacious in addressing the non-
financial aspects of the pre-, during, and post-merger phases. Corporate identity, as such, brings to the fore merger issues
which, though complex, must be addressed. The benefits of a robust corporate identity is of pivotal importance to the newly-
merged company:"A powerful corporate identity enhances the likelihood of identification or bonding with the organisation.
This applies both to internal and external target groups (Van Riel, 1995, p. 29)."

When two companies enter into the merger process, they are, in effect, creating a new corporate identity, and this new
corporate identity must be nurtured in order to allow its various stakeholders to identify with the new organisation. Corporate
identity and corporate communication consultancy may, therefore, be seen as providing a mirror and a window, reflecting
and revealing the organisation's culture and personality. Balmer (1995) provides an example of such a process, taken from
the pharmaceutical industry:"When Britain's second largest pharmaceutical group, Beecham, merged with SmithKline
Beckham of the USA one of the major concerns for the senior management was how to reconcile the two corporate cultures.
It was no longer appropriate to view the organisation as British or American since the organisation was, in effect, a global
brand. To assist them to make this change the organisation appointed corporate brand consultants Landor with the task of
ascertaining the core values of the new organisation and reflecting these in a new visual identity."

The interface between corporate identity and strategy therefore assumes critical importance during the merger process.
Many firms choose to address this issue through the creation of a powerful new visual identity. Balmer (1995) noted th at
changes in visual identity can symbolise a change in corporate strategy or strategic communications and as such can be
powerful.

The distinct literature on corporate communications is more developed than that relating to the related paradigm of corporat e
identity and typically is concerned with integrated marketing, organisational and management communications (Van Riel,
1995). In addition to co-ordinated "controlled" communication it has also been advocated that attention should be given to
the communication effects of product performance, service performance and staff behavior. This has given rise to the
related concept of total corporate communications (Balmer, 1998).

As a leading corporate communications expert has observed:"A company needs to take a holistic view of communications
because it is communicating all the time (even if it doesn't want to realise it) to all of its publics. The communication which is
taking place even if unplanned or unconscious, is creating impressions and images are being f ormed (Bernstein, 1986, p.
118)."

Methodology

Primary research comprised a series of in-depth individual interviews with senior executives and consultants involved in the
merger and acquisition process including a chief executive officer, an investor relations manager, a strategic management
consultant, an internal communications manager, a corporate publicity manager and a human resources consultant. All have
considerable experience of recent mergers in the UK.

The topic guide used for the interviews focused on the emphasis given to corporate identity (CI) and communication (CC)
during different stages of mergers.

The data were analysed drawing on the principles of content analysis. This method is useful when a broadly deductive
approach is followed and where hypotheses are being tested (Easterby-Smith et al., 1991). This was the case with this
research which, based on the authors' analysis of the literature, resulted in the broad hypothesis: "Management time and
attention to both practice in corporate identity and corporate communications increases the chance of a successful
merger/acquisition".

Findings

Why mergers fail

The authors' analysis of secondary data, case histories, and in-depth individual interviews with a range of senior executives
reveals that mergers and acquisitions which fail are attributable to the following nine factors:

(1) Undue attention is given to short-term financial and legal issues to the detriment of long-term corporate identity and
corporate communication issues.

(2) There is inadequate recognition of the impact of leadership issues on corporate identity and corporate communications
during the merger and acquisition process.

(3) Unsuccessful mergers are often characterised by failure to secure the goodwill of a wide range of stakeholder groups
common to both companies.

(4) Unresolved naming issues can reflect unresolved corporate identity and corporate communications issues.

(5) Integrated corporate identity and total corporate communications structures are rarely in place early on in the merger an d
acquisition process.

(6) Dominant players give little attention to cultural issues, especially at the outset.

(7) Recognition is not given to the potential conflict between individual and corporate objectives.

(8) Corporate identity and corporate communications consultants are brought in too late.

(9) Reputations can be damaged, maintained or enhanced during the merger process.

Each of the nine issues will be discussed in the following section.

First finding

Undue attention is given to short-term financial and legal issues, to the detriment of long-term corporate identity and
corporate communications issues

The army of advisers which is routinely assembled by companies which have entered into the merger and acquisition
process overwhelmingly comprises legal and financial consultants, whose primary interest is to secure the deal. Ensuring
the long-term success of the newly merged company is given insufficient attention. This approach fosters a narrow, short-
term approach to mergers, with inadequate attention given to post-merger concerns. These include corporate identity and
corporate communication issues, as evinced by the following quotations:"If any concern is given to identity issues, it's
usually too late, when conflict has broken out... (Wendy Hall, Strategic Consultant)."

A number of key authors and practitioners have emphasised the importance of corporate communications. Larry Snoddon,
president of Burson-Marsteller Europe (1990) notes:"More than finance or natural resources, communications are the key
enabler of business strategy today."
Second finding

There is inadequate recognition of the impact of leadership issues on corporate identity and corporate communication during
the merger and acquisition process

Questions of leadership are frequently a cause of friction between merging companies. Partisan allegiance to the pre-
merger companies, the accommodation of executive egos, and the placing of narrow managerial objectives over corporate
objectives constitute important corporate identity/corporate communication issues which can all contribute to a quagmire in
which the merger process slowly sinks. A vivid illustration of these pitfalls is provided by two recent cases - Glaxo
Wellcome/SmithKline Beecham and Citicorp/Travelers Group. With the former, the proposed merger foundered on the
thorny issue of agreeing a clearly established division of roles at the very highest level of the company. On the other hand,
fudging the leadership question, as has been seen in the case of the proposed Siticorp and Travelers Group merger, where
John Reed of Citicorp and Sany Weill of Travelers Group will be co-chairmen and co-chief executives, merely postpones the
need to acknowledge the fact that ultimate responsibility has to reside with one individual within the organisation. This was
supported by statements made by interviewees during the research:"The leadership issue is more complex than appears in
the papers. The balance of the management structure is really complex. It's not just a clash of egos that is critical (Wendy
Hall, Strategic Consultant).""It's not the two leading personalities that count, it's the managem ent structures behind them
(Investor Relations manager of a major pharmaceuticals company)."

Third finding

Unsuccessful mergers are often characterised by failure to secure the goodwill of a wide range of stakeholder groups
common to both companies

Although a huge corporate communication effort is made towards company investors, the level of corporate communication
directed at other key stakeholder groups is often inadequate. It would appear that many firms underestimate the time, effort
and resources that must be devoted to key external audiences, of which regulatory authorities are among the most
important. For mergers on a global scale, there is the added challenge of meeting the demand of an array of potentially
unsympathetic regulatory bodies. An illustrative case here is the British-based foods and drinks giant Diageo, formed by the
merger of Guinness and Grand Metropolitan. While the merger offered synergies in marketing and distribution and
enhanced its competitive advantage, its dominance of the spirits market raised concerns with US regulatory authorities, who
insisted as a pre-condition of the deal that in the US market it divested some of its famous spirits brands, including the
number-one selling Scotch Whisky in the USA, Dewars, along with a major gin brand, Bombay Sapphire. Although the
regulatory ruling was US-specific, a review of brand strategy by Diageo led the company to the conclusion that dual
ownership of these two brands was undesirable. As a consequence, the company felt that there was no option but to sell the
global rights to these brands to one of its major competitors, Bacardi-Martini.

Less successful, the case of the planned merger between accountants and management consultants KPMG and Ernst &
Young was met with swelter of regulatory resistance in the USA, EU, Canada, Australia, Switzerland and Japan. Such was
the strength of opposition to the merger than the regulators appeared to co-ordinate their efforts to block it. Also within the
financial sector, Ralph Pitman of the Halifax (financial services institution) described the problems regulators can pose:"One
of the big difficulties was the fact that any merger is subject to all kinds of regulatory things. We had teams of lawyers an d
advisers, we had the Building Society Commission watching us, and so on, and that was a difficulty for us. We had to be
absolutely certain that what we said could be defended later (Ralph Pitman, Internal Communications, The Halifax)."

Fourth finding

Unresolved naming issues can reflect unresolved corporate identity and corporate communications issues

The Pounds 23 billion merger between Guinness and Grand Metropolitan to create Diageo was driven primarily by the
desire to reap cost savings, but also to benefit from synergies in marketing the newly formed company's portfolio of leading
global brands, such as Gordon's Gin, Johnnie Walker, and J&B. However, a great deal of negative media comment and
coverage was generated when the name of the new company was announced. The merger between Guinness and Grand
Metropolitan serves to illustrate the danger of imposing a new visual identification system on an organisation without
preliminary consultation of the new entity's stakeholders. When the name Diageo was announced, it was greeted with
ridicule and disbelief by the shareholders of both Guinness and Grand Metropolitan.

The lingering afterglow of a pre-merger company identity was felt particularly strongly in the Diegeo case, where shareholder
loyalty to the Guinness name was so powerful that Diageo's directors had to acquiesce to demands to preserve the
Guinness name for the new company's brewing subsidiary.
Van der Lugt, the CEO of Dutch bank ING (1998), highlights the dangers of imposing a monolithic visual branding structure
on diverse acquired companies, underlining the value of the brand equity that will be lost if the parent company insists on
asserting its own name in inappropriate situations:"The moment you try at the highest management level to change such
good, local brand names because you think the name of the parent is better, you make a huge mistake, not to mention a
serious management error. You destroy capital and it is also a sign of arrogance which the market will not accept. As a
result, the clients will distance themselves from their old accustomed brand name."

The degree of emotional attachment felt by various stakeholders to a company's name should therefore not be
underestimated. The recent proposed merger between Daimler-Benz and Chrysler illustrates the sensitivity that needs to be
shown in this area, as reported in The Financial Times:""Everything was going fine, and then the name came up", says one
participant. The Germans were adamant the title should reflect Daimler-Benz's history, and the fact that their company was
the bigger part of the merger. The emotional issue of the eventual name would almost scupper the deal at the 11th hour
(Simonian, 1998)."

Fifth finding

Integrated corporate identity and total corporate communication structures are rarely in place early on in the M&A process

There is an important caveat given the amount of uncertainty that prevails during the M&A process, since it is clearly not
possible to integrate fully the two merging companies' corporate identities and corporate communications functions right
from the outset, as was pointed out during one interview:"You can't really merge the IR/communications departments before
the deal is done. Nobody knows if they are going to have a job when it's over, the situation is too uncertain (Executive
director of a major IR company)."

However, there needs to be some effort at integration of the corporate communications functions immediately following the
decision of a merger, in order to ensure consistency in the messages that are sent from both organisations to their
respective stakeholder groups. This was done in the case of the merger between The Halifax and The Leeds as the
following quotations from the research reveal:"I was asked to produce a weekly newsletter to report on the progress of the
merger from the point at which it was announced. It was sent to all members of staff, of both organisations. We decided right
from the start that we would commit to regular communication about the merger. And at the same time we maintained each
organisation's ordinary communications media (Ralph Pitman, The Halifax).""I think that the best advice to companies
entering into the M&A process is to commit to communicating regularly and jointly, and to maintain that no matter what.
Even if you have nothing to say, at least tell the staff what you are working on. I think that's important (Ralph Pitman, The
Halifax)."

Sixth finding

Dominant players give little attention to cultural issues, especially at the outset

Conflicting corporate and national cultures can also lead to facullines developing in newly merged companies. Cultural
issues are a core concern to an organisation's corporate identity (Balmer and Wilson, 1998; Hatch and Schultz, 1997). The
lack of attention to cultural issues can ultimately cause the demise of the merger. Whereas some companies are highly
centralised, others take a more hands-off approach. Some are marketing-led, other are research-led. Some have a history of
stability, others of turbulent change. Attempting to meld together such companies may represent an unsurmountab le
challenge. Two cases illustrate this point.

The first case concerned the acquisition of Barings Bank by Dutch-owned ING. Barings, long considered to be a bastion of
the finest traditions of English merchant banking, was acquired by ING in a successful attempt to raise the latter's profile.
However, the recent insistence by ING that Barings should mirror the parent bank's way of operating, through the forced
introduction of the previously unknown practice of cross-selling, has resulted in defections and widespread dissatisfaction
among Barings' staff vide supra Van der Lugt. As reported by Connon (1998), such moves were "anathema" to Barings'
corporate finance team:"The team were accustomed to the British tradition of investment banking based on long term
relationships rather than transactions. Selling derivatives and bond service was never part of the deal."

In discussions with the researchers, strategic consultant Wendy Hall indicates the extent to which the significance of cultur al
issues is underrated by executives during the M&A process:

- 1/10: importance given by senior executives to cultural issues pre-merger;

- 8/10: importance given by senior executives to culture as an issue post-merger, after they had been through the merger
process.
During the merger between The Halifax and The Leeds, such issues were addressed during the merger and may have
contributed to its eventual success:"There wasn't protest about The Leeds losing its name, but there was a kind of sadness
among Leeds staff... I think people were more concerned about losing not the public face of our identity, i.e. the name and
the logo, I think they were more concerned about losing the culture and the inherent, the deeper identity issues. For
example, The Leeds was very proud of its friendliness, and perceived The Halifax to be very efficient and very big but less
friendly. And it was qualities like that that they were more concerned about losing (Ralph Pitman, The Halifax)."

Key to successful implementation is an awareness of the importance of corporate culture, as reported in The Wirthlin
Report:"When two companies come together, many employees are suddenly faced with an unfamiliar corporate culture.
Research to identify the core values of the merging companies is important, to recognize both potential synergies and area
in which the corporate cultures may clash (The Wirthlin Report, 1998)."

This crucial aspect of merger and acquisition practice is further emphasised in the following unattributed quotation appearin g
in the management brochure @hand (1998):"It's not enough to invest up front in due diligence and assessment. The real
challenge is post-merger integration."

Seventh finding

Recognition is not given to the potential conflict between individual and corporate objectives

In some ways this may be considered an intractable problem how can staff be expected to focus on the long-term objectives
of the company if they are unsure of whether they will even have a job within that company? However, the problem can be
alleviated through sensitive, regular, and consistent communication, as the interview with Ralph Pitman showed:"It is hard
for people to focus on the corporate objectives if they're worried about their own position. And I think that probably, that' s
one of those problems that's impossible to solve, because you can't move straight from announcing a merger into saying,
"and by the way, you're going to do this and your pay is going to be that and your office is going to be situated here..." But
until you've got that sorted out, there is a feeling of unease and that will manifest itself all the time. So, I think that's an
intractable problem but we tried to deal with it, we tried to be honest, we said, "well, we hope to be able to sort this out by
such and such a date and we're keeping you informed" (Ralph Pitman, The Halifax)."

Eighth finding

Corporate identity and corporate communication consultants are brought in too late

Wendy Hall, strategic consultant, cited the example of a recent large oil company merger in Europe in which she was
brought in near the beginning. Corporate identity issues were addressed, and the senior executives of both companies
appreciated the importance of corporate culture. Each company recognised the way their behavioural styles has something
worth keeping, having first gained awareness of the other's style.

Such is the sensitivity of pre-merger negotiations that this can mitigate against identity consultants being brought in before
the merger is announced, as one interview revealed:"There's not really any possibility for identity consultants to become
involved at an earlier stage. It's too sensitive, very few people know about the deal they could be brought in when the deal is
announced (Executive director of a major IR Society)."

Ninth finding

Reputations can be damaged, maintained or enhanced during the merger process

The aborted merger of Glaxo Wellcome and SmithKline Beecham was a bruising encounter from which neither company
emerged covered in glory. This may impact on their fortunes when seeking potential merger partners in the future.

The reputation of the chief executive can also play a decisive role in affecting the outcome of the merger. If the chief
executive is known and respected by both companies' workforces, then that can allay fears of scepticism ab out the merger,
as the following quotations illustrate:"The chief executive of The Halifax at that time, Mike Blackburn, has previously been
chief executive of The Leeds, so that helped. There was an understanding on his part of the organisation he was mer ging
with. But there was also an element of trust on the part of The Leeds' workforce that he was a man that they know
something about (Ralph Pitman, The Halifax).""The stereotype of the CEO can put merger partners off (Wendy Hall,
Strategic Consultant)."

Finding the antidote for merger madness

The authors' research confirmed the importance of corporate identity/corporate communications issues in mergers and
acquisitions. Thus, from the primary data, the authors have concluded that the key drivers for a successful merger should be
identified. The remainder of the article drawing on the results from the authors' interviews will address the following quest ion:
"What are the key elements that are crucial for a successful merger?"

The key drivers for a successful merger: the merger-mix

The merger management process is inherently complicated and problematic since it entails melting down two companies
with their attendant loyalties, and creating a new company whose future is at best uncertain. Managers ignore the
complexities of the merger process at their peril. For other staff this will be a period of uncertainty and anxiety about their
future role - if any - in the newly merged company. It is the task of management to respond to the multiple concerns of the
internal and external stakeholders of both companies during all stages of the merger process. As a means of meeting these
concerns and as a point of departure, the authors have conceptualised the mix of elements that are central to the merger
management process, and present this in the merger mix, as shown in Figure 1.

There is a prima facie case that corporate identity and corporate communicat ions have a major role to play in the merger
management process and can complement the attention given to, rather than focusing only on, the financial aspects of the
process. The merger and acquisition literature emphasises the importance of "due diligence" with regard to the financial
aspects of mergers; however, would appear not to be used as a test for other important management functions and
concerns. This appears to be a major oversight in the literature on the area to date. The authors advocate that a focus on
the two organisations' stakeholders provides a means by which managers can identify those groups necessary to the launch
of a new organisation. Rather than focusing on the already well-documented financial aspects of the merger management
process, the authors advocate that a focus should be on the two organisations' stakeholders. The interplay of corporate
identity, corporate communication, and finance, with the two organisations' stakeholder groups provides the elements
necessary for the successful implementation of a merger. The authors describe this as the merger mix. It is worth reiterating
that the primary objective of corporate identity management is to achieve stakeholder loyalty, through building understanding
of an commitment to the organisation's defining ethos and character as evinced in the following extract from the International
Corporate Identity Group (ICIG):"By effectively managing its corporate identity an organisation can build understanding and
commitment among its diverse stakeholders. This can be manifested in an ability to attract and retain customers and
employees, achieve strategic alliances, gain the support of financial markets and generate a sense of direction and purpose.
Corporate identity is a strategic issue (The Strathclyde Statement, 1995)."

The authors postulate that a quartet of elements should be deployed in managing the merger management process namely:

- stakeholders;

- corporate communications;

- corporate identity; and

- finance.

Each will be discussed in the following section.

Merger mix: the identification of key stakeholder groups

Central to the merger mix is the notion that addressing the demands of the multiple stakeholder groups of both companies is
a prerequisite for a successful merger outcome. A focus on both organisations' stakeholders is central to and underpins the
merger mix for the following reasons:

- Successful mergers and acquisitions rely on the approval of several stakeholder groups; while investors need to see the
advantages of a merger, so do regulatory authorities, as might current partner companies who may withdraw co-operation
due to a perceived threat.

- In M&A situations, the stakeholders of both companies must be taken into consideration; once the merger process has
been initiated, each organisation has an obligation to stakeholder groups in both companies, since the newly merged
company will rely on the support of all parties involved.

- Simultaneous membership of multiple groups in both companies may occur, for example, an employee of one company
may have shares in the other.
- Stakeholder groups within both companies must be ranked and evaluated according to the degree of communication effort
that is required to overcome potential indifference or hostility to the merger.

- Consideration must be given to the channels available in communicating to stakeholders of both companies in the M&A
process, taking into account the most effective channels required for each stakeholder group.

Single company shareholders are not the only stakeholder group which need to be persuaded of the benefits of the merger.
It needs to be borne in mind that:

- companies have other important internal and external stakeholders;

- once the merger process has been initiated, the stakeholder groups for both companies double in size as a result of the
process; and

- there is a burgeoning in informal and uncontrolled communication between groups which may see the proposed merger in
an unfavourable or threatening light.

Thus, an analysis of stakeholder groups may be formed to comprise a six-stage process:

(1) Who are our internal and external stakeholder groups?

(2) Which groups are crucial to the merger's long-term success?

(3) Which groups will benefit from the merger's success?

(4) Which groups feel threatened or anxious about the merger?

(5) Repeat the above process for the other company.

(6) Compare the results from both companies and break down problem categories into those that may be contained,
influenced, resolved.

The authors advocate that stakeholder reactions to the merger need to tracked over the entire merger process in order to
ascertain whether attitudes have shifted due to changing circumstances. By varying the intensity of the communication effort
made towards specific stakeholder groups at specific periods of the M&A process, the merging companies' communications
managers can contribute substantially to the eventual outcome of the project.

Having undertaken this six-stage process, managers need to address the other three elements of the merger mix by making
cross-reference to the stakeholder groups.

Merger mix: corporate identity

Corporate identity subsumes a number of concerns relating to culture, strategy, and structure and, as such, the authors
suggest that the following questions should be addressed of: both partner companies and of their prospective partners; and
of the envisaged "new" company emerging from the merger. The following eight questions serve to show how this part of the
mix may begin to be operationalised:

(1) What are the strengths and weaknesses in our business and markets?

(2) What are the strengths and weaknesses of our dominant cultural forces within the organisation?

(3) What are the strengths and weaknesses of our leadership style?

(4) What are the distinctive strengths and weaknesses about our history?

(5) What are the strengths and weaknesses of our company structure/organisational design?
(6) Repeat the process for the other company.

(7) Identify and evaluate strengths and weaknesses to be nurtured, maintained and eliminated.

(8) How are the above to be managed in both companies?

Merger mix: corporate communications

The benefits of effective corporate communication are many and varied, as outlined in the five reasons below:

- (1) Identifies multiple stakeholder groups essential to the merger's success, across both companies.

- (2) Identifies those controlled and uncontrollable channels essential to the merger's success across both companies.

- (3) Identifying weaknesses in communication strategy which might lead to a void that will be filled by potentially damaging
rumour and conjecture.

- (4) Setting up communication structures for the new company as a means of avoiding dissonance between the
communications specialists of both companies during the merger process and after the legal formation of the new company.

- (5) Undertaking research to monitor:

- the efficacy of the communication strategy;

- identifying the emergence of potentially damaging issues;

- monitoring perceptions pre-, during, and post-merger; and

- revealing conflicting messages emanating from the two companies.

Merger mix: finance

A good deal has already been written on this other crucial aspect of the mix. The authors are of the view that the importance
of financial concerns vis-a-vis a successful merger outcome needs no further elaboration. Normally economies of scale,
pooling of resources, leaner structures, etc. are used as criteria. What the authors wish to emphasise is that while financial
concerns are important they should not eclipse the important corporate identity, corporate communications and stakeholder
issues which often determine the ultimate success or failure of a merger.