| Chapter 1: | Introduction |
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Data available for European M&As are broadly in line with those of the United States.
Citing Kitching’s (1974) study of U.S.-based companies’ acquisitions in Europe, Bleek, Isono, and Ernst’s (1990) studies of cross-border acquisitions and acquisitions of U.K.-based companies on Continent (1992), Angwin and Savill (1997, p. 427) noted that between 43% and 54% of M&As are “considered failures or not worth repeating”.
Definitional and other measurement problems notwithstanding, there seems to be a weight of data and anecdotal support for the view that between one third and half of all acquisitions fail. Moreover, while no time series of comparable data is available, there are indications that the failure rate has been substantial, at least in the United States, since the very first wave.3
Given the importance of M&As and the high failure rates, a substantial body of knowledge has evolved addressing issues related to performance improvement. The traditional view of the way to improve acquisition performance emphasises avoiding failure. In this book, a complementary view is taken which focuses on increasing the total number of successful acquisitions by not forgoing opportunities that are identified as potentially sound.
1.2.3. Limits of the Traditional View of Performance Improvement
Processes are mostly studied to find out why the acquisition failed and to find a formula to avoid future failures.
—Risberg (1999)
The performance improvement literature, like the performance measurement literature, is multidisciplinary, fragmented, and characterised by a multiplicity of paradigms and approaches. Much of this literature tends either to build upon or to reflect suggestions that are expressed or implied in the performance measurement literature.
Contributions of the strategic management discipline are divided into those relevant to the content of the acquisition strategy and those dealing with the process by which the strategy is developed and implemented.