Appendix 1B

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1+1= Optimization TACtH, 2004 Amstelveen 1

Appendix 1A

Figure Appendix 1a: A System model of change

Organizing Arrangements

Policies Procedures Roles Structure Rewards Physical setting

Social Factors

Organization culture Group processes Interpersonal interactions Communication Leadership

Methods

Processes Work flow Job design Technology Goals

Desired end results Priorities Standards Resources Linkage through- out organization

People

Knowledge Ability Attitudes Motivation Behavior Internal

Strengths Weaknesses

External

Opportunities

Organizational level Department/

group level Individual level Outputs Inputs

Target Elements of change

Strategy

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Appendix 1B

Figure Appendix 1b: the situation of a company

Environment

Internationalization Competitive environment

Strategy

Goal setting Generic strategies Inter-organizational relations

Structure

Organization structure Production systems &

Technology development Innovation & R&D Planning & control systems

Information systems Human resource management

Performance

Objective & subjective measures

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Appendix 2

Case Anne

Type of Cooperation Acquisition Acquirer’s modes of

acculturation

Assimilation

Geographic scope of the integration

Global

Type of Industry Services Start of the cooperation 2000

Proportion between the parties The acquired party was much bigger than the acquiring party

Cooperation goals To become a significant worldwide market player Enter new countries

Leverage management best practices and purchasing power

Important issues They have obtained a very valuable amount of clients but they are not benefiting as much from these clients as they might.

Important drivers for IBO They possess a big part of the market and there are numerous opportunities to earn more money.

The market is changing very quickly; the wishes of the customers are changing rapidly.

IBO measures A younger CEO was appointed to fit in the young employee profile of the company.

They entered into several partnerships to be able to widen their product and increase the turnover per customer

Current results of the cooperation

The company is still performing really well and is one of the world’s biggest players on the market.

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Case Bart

acculturation

Integration

Global Type of Industry Production Start of the cooperation 2000 Proportion between the parties 2:1

Cooperation goals Global presence

Reinforcing the product portfolio

Important issues There were no big issues discussed during the interview.

The executive made clear that due to constant monitoring the bigger problems could be tackled before they became an issue.

Important drivers for IBO The executive did not really believe in one IBO moment, he meant that it was important to keep improving all the time.

IBO measures

The cooperation is performing pretty well; the anticipated synergies are achieved. The company’s new strategy might cause some hick ups at the moment.

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Case Bart 2 (second interview with different executive) Type of Cooperation Acquisition

Acquirer’s modes of acculturation

Integration

Global Type of Industry Production Start of the cooperation 2000 Proportion between the parties 2:1

Cooperation goals Global presence

Reinforcing the product portfolio

Learn from each others’ core competencies

Important issues The integration of both people and cultures was mainly done due to journeys in the first year of the cooperation.

During these journeys a representation of both companies came up with a new strategy.

Important drivers for IBO The integration of both cultures brought a culture that did not really suit the other department of the acquiring party.

IBO measures A new corporate strategy for the two original departments of the acquiring company should bring the whole company in line again.

The cooperation is performing pretty well; the anticipated synergies are achieved. The company’s new strategy might cause some hick ups at the moment.

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Case Carin

acculturation

Assimilation

Germany

Type of Industry Production and distribution Start of the cooperation 2000

Proportion between the parties 85:15 in value

Cooperation goals Reinforce core business

Implement new overall strategy quicker Financial synergy advantages

Important issues To integrate the acquired company they changed the structure of the whole company

Now they have acquired more companies and are going to change the whole company structure again.

Important drivers for IBO The market did decline after the acquisition; this meant that the performance of the combination was not as anticipated and extra measures had to be taken.

IBO measures Extra acquisitions

Extra cost reduction programs Changes in the board

Changes in management Restructuring of the company Current results of the

cooperation

After a bad market situation in the beginning of the cooperation, the combination does now provide the anticipated benefits.

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Case Derek

acculturation

Integration

Dutch Type of Industry Production Start of the cooperation 1998

Proportion between the parties 100:35 employees Cooperation goals One stop shop

Increase ability to minimize time to market Higher added value and less risk

Financial synergy advantage

Important issues The market was not performing as expected when the deal was made

Important drivers for IBO One of the most important markets for the acquired company did collapse just after it was acquired

IBO measures Numerous employees of the acquired company had to be fired to ensure that the company would stay profitable even though the market did decline

The decline of some markets was a bit unlucky but the integration went smooth. The current operating result of the company is also up to standard.

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Case Ellen

Type of Cooperation Merger Acquirer’s modes of acculturation

Integration

Global Type of Industry Distribution Start of the cooperation 1999

Proportion between the parties 9:1 in turnover

Cooperation goals Positioning; to become a powerful global player Financial power; more money to invest

Cost reduction

Important issues They tried to integrate the two company but it were two completely different businesses

Important drivers for IBO The integration of the two companies was very difficult if not impossible, due to the lack of fit between the different businesses

Not everybody in the company was very happy with the performance of certain board members after the deal

IBO measures There was a split-off; the company was divided into two parts that could perform separate. This resulted in two new companies. It was not a de-merger because the two companies after the split were different from the two before the merger.

The split did cost a lot of money but both companies are now better performing separately than when they were together.

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Case Frenk

acculturation

Integration

Europe and America Type of Industry Services

Start of the cooperation 1998

Proportion between the parties 100:15 employees worldwide, but in the domestic country of the acquired party: 17:100

Cooperation goals To become an important player on a new market without funding costs

Economies of scale as well financial as in knowledge Important issues The employees of the acquired company were even

more willing to cooperate than expected

Important drivers for IBO The competitors were growing faster in the region of the acquired party than the acquirer expected, and this did not suit the initial intention of the cooperation

IBO measures There were extra acquisitions necessary to become a really big player on the, for the acquirer, new market.

The combination has been very successful thus far; it reached its anticipated goals.

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Case Gepke

acculturation

Integration

European and American Type of Industry Services

Proportion between the parties The acquired company was twice as big as the acquiring company

Cooperation goals To become a big and important pan –European player

To learn from the acquired company all sorts of process related matters

Important issues When the market turned against the cooperation it became clear what sort of company actually was acquired.

Important drivers for IBO The market and the deal did put the cooperation in a difficult situation

IBO measures A person who could be able to make the company perform again replaced the CEO.

The present makes the company perform relatively well.

But he is still haunted by the problems caused by the acquisition.

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Case Hans

acculturation

The intention was integration but it became assimilation

European Type of Industry Production Start of the cooperation 2001

Proportion between the parties About the same number of employees, but in turnover the acquiring party is almost twice as big

Cooperation goals Combine the two portfolios to be able to compete with the big players

Combine production activities

Share product development knowledge, management structure and learning environment

Important issues Due to the fact that the acquired company got some operational problems just before the deal their negotiating power shrunk. This gave the CEO of the acquiring party more power

Due to the power of the CEO of the acquiring party the mutual learning experience has only really been a one way learning experience.

There are still two headquarters, this causes that there is very little communication between the two boards

Important drivers for IBO The extreme control of the CEO of the acquiring party does frustrate the management of the acquired company IBO measures The management of the acquired company is very

unhappy with the whole situation but due to the lack of power they have not yet really been able to act.

Financially the company is performing really well.

There only is much more mutual learning potential. This does particularly frustrate the old headquarters of the acquired company.

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Case Isabelle

Type of Cooperation Successive acquisitions Acquirer’s modes of

acculturation

It started as a separation with some deculturation. At the moment the real integration is started.

Europe and the USA Type of Industry Production

Proportion between the parties After the acquisitions the acquiring party was three times bigger

Cooperation goals To compete with the few other big players Access to new markets

Combine the talent and knowledge of industry leaders

Important issues For a large amount of money companies were bought, but they were not really integrated since the separate companies were bought over the last five years.

Important drivers for IBO The network of the company was not optimized due to the lack of integration between the different companies.

IBO measures The CEO retired and was succeeded by a CEO that had a lot of experience with integrating companies. He gave the integration a stronger client focus.

The company is performing very well, but there might still be a lot more potential when the companies are really integrated.

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Case Jan

acculturation

Assimilation

European Type of Industry Distribution Start of the cooperation 2001

Proportion between the parties 8:1 between the division where the acquired party is integrated

Cooperation goals To be able to offer a complete product To expand activities to another country

Important issues The results of the acquired company were not as anticipated especially after 9-11 the results started to decline.

Important drivers for IBO There was a hire and fire culture at the acquired company this caused that the company not to perform as it could

IBO measures At the acquired company there was a new CEO appointed. This CEO was a young high potential that came from the acquiring party. This CEO stopped the hire and fire culture and made sure that there would be a positive and productive culture. He was assisted by another high potential from the acquiring firm.

With the new CEO the company is performing as anticipated when the company was acquired.

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Case Kees

acculturation

Integration

Global

Type of Industry Production and distribution Start of the cooperation 1998

Proportion between the parties 3:2

Cooperation goals To become a significant market player Optimize the portfolio

Prevent competitors from buying the company they acquired.

Important issues The BU’s structure of the company was very useful for the integration of the acquired companies. But for a new era it is very useful to change the structure.

Important drivers for IBO There were no companies to be acquired anymore and only other forms of cooperation could be started. The competitors had also changed their market approach, and to stay competitive this company also had to adapt to the new situation.

IBO measures The board changed the structure of the company and started new partnerships. From a production push they became more interested in the clients and their needs.

The company does still perform and seems to succeed in introducing the new company structure.

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Appendix 3

Interview with ………

Intro: (5 min)

Hans Bakker Tom ten Hage

Goal of our research: A publication with practices for managers involved in Integration Benefits Optimisation

Interview -Several executives from big multi nationals:

-Strictly confidential -Approximately 1.5 hours

-Concerning the optimisation of the integration of

Goals of the interview: To see how the results of a cooperation are optimised (Show slide)

Agenda:

- Check merger goals

- How the different drivers did influence the cooperation - How you did get to the optimising measures

Goals: (15 min)

We found five main acquisition advantages? (Show slide)

Integration: (2min)

At what level is … integrated within: Corporate, division, regional What happened to the executives from?

Optimisation: (15 min)

What were the most important drivers that stimulated measures to optimise the cooperation? (Show slide)

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Trigger: (5 min)

What were, besides restructuring, the main moments to optimise?

When and how did you notice this? -Ad hoc (good or bad) -Method

Synthesis (…)

What are the biggest challenges?

Which dilemmas, issues are there at the moment?

Diagnosis: (15 min)

How did you get to the problem diagnosis, is there a special routine (Tom)?

Why did you get to this diagnosis?

Which drivers were considered in this process?

With whom did you get to this diagnosis?

Further best practices?

Decision making: (15 min)

Which alternatives were considered?

Why did you choose the specific alternative?

How did you choose the alternative (process)?

How were the drivers considered in the diagnosis used in the decision-making?

Implementation: (10 min)

How are you going to implement the measure?

What might be the biggest challenges?

Results: (10 min)

What do you think that the result of the intervention will be?

Were there maybe any drivers which did not get the attention they deserved during the previous four stages?

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(10 min)

Are there important things that we missed?

Would it be possible to ask additional questions via phone or e-mail?

Confidentiality is guaranteed

You will receive a copy of the final publication Thanks

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Appendix 4

Thesis strategy

In this chapter we will divide the project in steps to show via which route have eventually fulfilled this project in a successful way. These steps were also used to support the project planning.

Even though the project produced two products, namely a report and a thesis, the method and therefore the steps were the same.

1^st step: Agree with the three parties (KPMG,RUG and student) on the thesis plan

2^nd step: Develop a structured way to invite the candidates for an interview in a way that doesn’t adversely effect the KPMG reputation.

3^rdstep: Create a file with information about the cases we want to discuss 4^th step: Approach the different interview candidates for an interview 5^th step: Read literature

6^th step: Make a framework to organize the information from the interviews 7^th step: Make specific questions per case for the interviews

8^th step: Interview the different candidates

9^th step: Place the relevant information from the interviews in the framework 10^th step: Write a theoretical introduction and formulate hypotheses

11^th step: Answer the hypotheses to structure current practices 12^th step: Write the conclusion and recommendations

13^th step: Finish the concept report and thesis 14^th step: Finish the final report and thesis

15^th step: Present and defend the final report and thesis for the directly involved persons

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Appendix 5

Identification of resource requirements

The thesis is not only being based upon secondary data but also on primary, namely the interviews. We depended on the willingness of the interview candidates to cooperate.

That is why the process of inviting the candidates for an interview was very important.

The following persons were also essential for the quality of the thesis.

Name Job Title Role within this

thesis

Hours dr ir M.N.F.Babeliowsky Manager KPMG

B.I.

KPMG coordinator 2x one hour per week

dr J.A. Neuijen University Lecturer

RUG coordinator One hour (phone) contact per week

Prof.dr. J.C. Bakker Managing Partner KPMG BI

Prof. University Nyenrode

Member of steering committee

After every finished chapter

& incidental F.J.W. Stevenaar MSc Advisor

KPMG BI

Member of steering committee

After every finished chapter

& incidental Drs. E. Gnirrep University

Lecturer

Second reader of the RUG

Two or three meetings

KPMG specialists Providing all sorts

of relevant information

Incidental

Post Integration experts To provide

information from a different angle

1.5 hours per expert

Interviewees Managers/

Executives

To provide primary information

1.5 hours per interviewee

T.A.C. ten Hage Student Researcher and author of the reports

40 hours per week

End

*