1. Leadership in the acquisition of companies versus a theoretical approach
The company’s entry onto the path of the accelerated development following the mergers and acquisitions entail radical changes forcing a revision of opinions and practices in the field of human resources management. An ability to convince people to cooperate in order to achieve difficult aims and a capacity to attract the supporters become key managerial skills. Radical changes make it necessary to reevaluate the paradigms of leadership both in theory and in practice. “For many organizations- as G. Avery notices- this means a passage from a traditional model of control towards alternative models where the attention is put on the cultural competencies, organizational learning and the skills to support communication and cooperation within a group. It is taken for granted that leadership is one of the key success factors in the processes of mergers and acquisitions, which are a tool of the exogenous development of the organization. They are an alternative for the internal growth based on investments. The acquisitions and mergers are mainly associated with the diversification strategy. The adoption of the concept of development by means of mergers and acquisitions is connected with the acceptance of the high risk which appear on every stage. The reports of the consulting companies Deloitte
and KPMG International
show that the discussed transactions often end with a failure understood as a decrease of the company’s value in comparison to the value before the transaction. The problems with personnel connected with the management, relations between employees and the cultural differences of the companies-transaction partners are among the most important factors which constitute a barrier for the process of the merger. While looking for the reasons of failures and the ways of limiting these problems, as the effect of the conducted research the list of the so-called critical success factors was defined. On this list the factors which have contexts connected with the quality management and leadership (“a proper choice of the managers”- 59% of answers and “leadership and the clarity of responsibility”- 48% of answers were enumerated as key success factors:) are clearly marked on this list.
Generally the leadership is understood as: personal power, authority, role in a system of power, capacity to create and change a structure of informal power or a specific way of executing power in the organization. On the different levels of the organization there are the differentiated mechanisms of the phenomena of leadership described within the different theoretical concepts. Some of them concentrate on a single leader (“the concepts of great people”, the concepts of features and behavioral concepts). The approaches of the following researchers can be considered as such: B.M. Bass or G. Yukl. A dynamic approach by S.J. Zacharro falls also within this trend. The second group are socio-cognitive theories within which a conviction was adopted that the leadership does not result directly from the features and behaviors but is implied by the perception of the supporters. The third group of the theories concentrate on the process of exchange between a leader and subordinates (leader-member exchange theory).
A group of situational theories is also clearly marked (situational leadership model by Horsey and Blanchard, a model of “situational adjustment” by Fiedler, a success path theory by House). A lot of attention is also devoted to the model of transformation leadership built by Burse at the end of 70s developed in the 90s by B.M. Bass and B.J. Avolio. A concept of servant leadership proposed a few years earlier has a marginal meaning.
This concept represented by J.E. Barbuto and D.W. Wheeler putting emphasis on such issues as: a sincere interest in serving others, knowledge and help in solving the emotional problems of employees was not interesting neither for the theorists nor for the practitioners of the management. The analysis of this problem in the literature leads to a conclusion that the issues of leadership constitute a central element of the analysis connected with the issues of the organization effectiveness. The basic question which the researchers are trying to answer is: does the leadership have a real impact on the organization result. Numerous research devoted to it did not give so far an accurate answer. Some of the analysis showed that this relationship is very important (compare: Bertrand and Schoar). However, there are also such research results which show that this influence is not particularly important.
The research conducted by Lieberson and O’Connor show that the leaders of the lower level have a small influence on the results of the organization. Also the research on visionary companies conducted by Collins and Porrasouse showed that there are no proves that the “perfect leadership” results from the development of this type of companies.” (…) the theory of the great leader does not explain sufficiently a difference between visionary companies and comparable companies”. The concept of M. Chamers falls also within the trend of the effective leadership. The effectiveness is categorized within three mutually dependent spheres: a vision of management, an image of the organization and a vision of the leader.
A situation of the company’s change of the strategy is one of the situations in which the leadership effectiveness is the most important. In this trend the research on the succession of top managerial positions were conducted. They showed that an appointment of a new president facilitates an implementation of changes and obtaining support on the lower levels of the organization hierarchy (compare: Collins, Porras, Aditya, Wasserman, Anand, and Nohria). The research showed that leadership was one of the key success factors in the processes of mergers and acquisitions. A creation within a period of time which was as short as possible of a management team which will implement a strategy of a new organization operating in the post-merger structure is an equally important element which influences the transaction success. The research of the company Hay Group
showed that the organizations which appoint a new management team already in the due dilligence phase are twice as likely to have a full integration within one year. It is also important to provide this team with a proper level of decisiveness to help it implement a strategy of a new merged organization. The understanding of the leadership influence on the transaction effectiveness requires a simultaneous consideration of the different levels of leadership in the organization. It is common in case of acquisition processes to talk about a leadership vacuum on the lower levels of the organizational structure. A review of managerial skills of the employees of the acquired organization should be a priority activity, already at the stage of due diligence analysis. It is necessary to remember that the competencies required for managerial positions in the process of mergers are often one or two levels higher than the current skills of the managers. In order to diagnose a staff potential and to counteract the indicated problem of the leadership vacuum it is possible to use a few tools to check the competencies of managers and the results of their actions remembering that the leadership quality can have an influence on the process of the acquisition, mainly at the stage of the post-transaction integration. It is worth underlining that the management of the process of integration should be treated as a “separate business function” and the supervision of the described process should be given to the experienced managers. The acquisitions of companies should be approached from a business point of view with a conviction that the different phases of the described process create a demand for the different categories of leaders.