Could the Diamler-Chrysler Merger Failure Be Avoided? Bernard WorthingtonApril 27, 2014BUS135_OLFC-2014_02TERM_CProfessor Joe CoxStratford UniversityMerging companies fail to develop a set of guiding principles related to the strategic intent of the merger. These principles should capture the very logic of the transaction: is the merger an absorption of one company into another, or a combination designed to bring out the best of both? Perfection may not be possible, but these principles will ensure that all decisions steer the combined entity in the same direction. In a best-of-both-business transaction, for example, one principle might be: “Bring together IT organizations by selecting the most up-to-date systems and deploying them across the combined entity.” The planning ground rules provide practical guidance on how planning teams should act when they begin to put the face of the merged entity on paper. These rules should include processes for how decisions are made and how conflicts are resolved. It's hard to believe, but detailed post-shutdown transition plans can be lacking even when two companies work hard and have closely engaged senior leadership. Why? To some extent, this reflects the daunting complexity of any integration. It can also, however, reflect companies' culture and a resistance to detail and top-down accountability. The acquirer may suffer from acquisition fatigue, management distraction, reluctance to share information, or simple reluctance to follow a methodical decision timeline. All relevant stakeholder groups, both internal and external, must receive communications about the transaction, promptly and often. While employees, customers and regulators find themselves in the middle of paper, there is a natural hesitation to share information and current regulations put pressure on what management can say to the organization without making it public. However, in the absence of real facts, rumors will fill the void. Tell employees what you can. Also, tell them what you can't tell them right now, why, and when you will be able to. After all the hard work and despite meticulously avoiding sins one through eight, some companies still miss the mark. The popular trend towards empowered line managers and decentralization carries the risk of handing carefully designed plans to new decision makers who are not immersed in the balances and considerations that made the plan feasible in the first place. After the handover, every company needs clear decision rights on who can change the agreed plans, under what circumstances and with what approvals.