Sainsbury's workers should be considered
Dr Rowan Bradford Client director, Kaisen Consulting
Sir; This week's surge in Sainsbury's share price shows that the bid speculation surrounding the retailer is not going to go away any time soon. The headlines have been dominated by Delta Two's acquisition of a 17.4% stake in the business. But that's not to say trade buyers will not throw their hats into the ring. Over the past year there have been billions of pounds worth of mergers and acquisitions. ?In a mature market? the obvious way to increase market share is to seek acquisitions. But mergers and acquisitions are fraught with cultural challanges. A report by the Hay Group found that 86% of mergers in the retail sector failed to meet their objectives because of the culture shock. According to the report, insufficient attention was paid to human and structural assets, or on integrating the business cultures of the merged companies. As a consequence, more than a third of business leaders were unhappy with the post-merger climate. Morrisons' takeover of Safeway, for instance, was initially soured by a clash of business cultures. Morrisons took longer than it should have to realise that for the merger to work, some of the Safeway culture had to be integrated. Manufacturers too face challenges. Robert Schofield, chief executive of Premier Foods, has acknowledged that the company's recent takeover of RHM will transform his company. If Schofield uses his £100m war chest to acquire other businesses, he could inherit a lot of worried junior and middle-rank executives. With the top team, who might have financially benefited from the takeover, there will be other challenges. Negative reactions among senior executives to the acquisition can infect vulnerable staff at a critical time. Corporate buyers can forget to communicate and assume that silence means acceptance. But people need help with endings. They need to feel involved in change and have their sensitivities respected.
Dr Rowan Bradford Client director, Kaisen Consulting
Sir; This week's surge in Sainsbury's share price shows that the bid speculation surrounding the retailer is not going to go away any time soon. The headlines have been dominated by Delta Two's acquisition of a 17.4% stake in the business. But that's not to say trade buyers will not throw their hats into the ring. Over the past year there have been billions of pounds worth of mergers and acquisitions. ?In a mature market? the obvious way to increase market share is to seek acquisitions. But mergers and acquisitions are fraught with cultural challanges. A report by the Hay Group found that 86% of mergers in the retail sector failed to meet their objectives because of the culture shock. According to the report, insufficient attention was paid to human and structural assets, or on integrating the business cultures of the merged companies. As a consequence, more than a third of business leaders were unhappy with the post-merger climate. Morrisons' takeover of Safeway, for instance, was initially soured by a clash of business cultures. Morrisons took longer than it should have to realise that for the merger to work, some of the Safeway culture had to be integrated. Manufacturers too face challenges. Robert Schofield, chief executive of Premier Foods, has acknowledged that the company's recent takeover of RHM will transform his company. If Schofield uses his £100m war chest to acquire other businesses, he could inherit a lot of worried junior and middle-rank executives. With the top team, who might have financially benefited from the takeover, there will be other challenges. Negative reactions among senior executives to the acquisition can infect vulnerable staff at a critical time. Corporate buyers can forget to communicate and assume that silence means acceptance. But people need help with endings. They need to feel involved in change and have their sensitivities respected.
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