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Integrating Management Information Systems Following Organizational Mergers or Acquisitions Work in process Fred Niederman, Saint Louis University [email protected] Elizabeth Baker, Virginia Military Institute Abstract Mergers and acquisitions have become a normal business occurrence for companies large and small. Integration of entities following mergers and acquisitions are often more painful and less successful than they could be. The integration of information technology functions plays a vital role in the ultimate results of such a merger by actualizing product and customer synergies, establishing best practices drawing from the best of each organization, and providing smooth transition to integrated reporting and decision systems. This study proposes to investigate best practice for information technology leaders for both large scale mergers and more routine smaller acquisitions considering technology portfolios, intellectual property, data assets, personnel, culture, and other key issues in such integration. Deliverables will include development of grounded theory suggesting patterns of activities that lead to more successful merger and acquisition outcomes. From a practitioner perspective, such theory will be presented in the format of a taxonomy of critical success factors forming a comprehensive "checklist" of issues for CIO consideration in approaching future integrations. The authors are grateful for the funding provided by the Lattanze Center @ Loyola College in support of this research. Please do not quote or reference without explicit permission from the authors. “Studies and experiences have shown that a major reason why many mergers and acquisitions fail is because of problems that occur during the implementation stage of the transaction. Information technology (IT) has emerged as one of the most critical aspects of integration and successful implementation.” (Popovich, 2001) “When dealmakers are trying to knit together a transaction, managing all the details can seem like death by a thousand cuts. But experts insist that deal principals must look beyond financial and other models when evaluating deals and include information technology (IT) on their short list of concerns.” (Shearer, 2004) Introduction Merger and acquisition activity is extensively found and of extraordinary consequence in the business world. Based on statistics published in IDD Magazine derived from the consulting group 451 which maintains a database regarding merger and acquisition events, some 4000 mergers and acquisitions were reported in the technology and telecom space in just the year 2006 (Miller, 2007). However, on average, when adjusted for market effects, the value of both the acquired and the acquiring companies tend to fall rather than increase as a result of merger and acquisition. They frequently result in a loss of value sometimes ending in divestiture. McKiernan and Merali (1995) report that estimates of the proportion of such divestitures range between 33% and 60%. They reference Violano (1990) claiming that 80% of merger deals ended up, “destroying the value of the organization for the acquiring company.” This is of importance in the MIS world because a major reason for poor results from mergers and acquisitions is the difficulty and complexity of integration of the entities (Srivastava, 1986) and, as noted in the quotations at the top of this paper, information technology and the MIS functions play a crucial role in effective integration. The management of mergers and acquisitions at the operational level should be of great interest to CIOs and senior MIS managers. It should be no surprise to be called upon multiple times in an active career to evaluate an acquisition or merger opportunity prior to one taking effect. Even more likely the CIO will be called upon to lead the integration of MIS departments following a merger or acquisition. Although other factors, such as the negotiated price of the transaction and merging of cultures and business processes are also important in the outcome of a merger or acquisition event; the integration of MIS assets are also important influences on outcomes from the transaction. This is so for several reasons not least of which are: (1) the newly merged entity may take advantage of increased bargaining power to renegotiate with vendors and other suppliers in a way that significantly reduces cost or increases services (or may miss such an opportunity: (2) the MIS function provides critical support for business processes whether they be in operations, marketing, research and development, or elsewhere the integration of which relies on smooth uniting of MIS infrastructure and technical support; (3) the MIS function provides the continued supply of accurate, timely, and relevant operational data formatted, aggregated, cleansed, and presented for on-going business decision making; and (4) the MIS personnel in an organization represent a substantial knowledge asset for maintaining existing technology, providing innovation, and moving to a stronger platform in the emerging new business entity formed of acquired and acquiring firms. From an idealistic point of view, the goals of MIS professionals in a merger and acquisition will include preserving and expanding value to the organization and, ultimately, society. From a pragmatic perspective, mechanisms for achieving these goals are not necessarily clear. A scarcity of research on the role of MIS in merger and acquisition events provides little guidance in this area for practitioners. This study proposes to examine in detail issues involved in the phases of merger and acquisition from pre-event discussions to finalizing consolidations; to identify critical factors, actions, and policies, and to map patterns of relationships between factors, actions, policies, and the outcomes of merger and acquisition events. Background on Mergers and Acquisitions Two extensive research literatures have developed regarding mergers and acquisitions. In broad terms, the first is financially-oriented looking for structural factors that correlated with rising or falling value as measured by stock prices. Such investigation will consider, for example, the degree of similarity in product lines, marketing skills, or other factors and correlate such measures with stock prices at various points in the future. Alexandridis, Antoniou, and Petmesas (2007) show that an optimistic view in approaching mergers and acquisitions is largely unsupported by observation of prior financial results when reviewed from a variety of methodological and conceptual perspectives. Pautler (2002) takes an economic approach from the perspective of investigating whether or not mergers and acquisition create dangerous anti-competitive trust activity. This study considers only the net impact of mergers and acquisitions on the overall economy and is not much concerned with issues that would increase or decrease the probability of any particular merger being successful. A second literature attempts to investigate in more detail the dynamics by which some mergers prove more successful than others. The underlying premise is that quality of management of the merger process influences the outcome. Even where structural factors are extremely favorable, poor management can “blow” the integration of the two firms whereas even where structural factors are unfavorable, excellent management might transform the situation into a success. Over a large number of mergers, such management characteristics may prove to simply average out and be viewed as part of a natural “error” term in regression equations. However, from the perspective of any given merger, management quality and effectiveness of integration may account for significant variation in outcome. Moreover, if standard approaches to effective management of such change are discovered and diffused to become norms the percentage of successful mergers may be increased. The overall nature of a merger can be described as two sets of competencies and assets moving through a series of transitions from pre-deal assessment through being legally combined into a single new entity and through a set of additional transitions that restructure an emergent new entity from two separate components. In an abstract sense, this can be viewed as a series of moves through a problem space from a “current state” characterized by the un-integrated set of assets brought by each of the new partners to a “future state” characterized by a new set of assets representing a single combined entity. Clearly some of the original assets may remain unchanged, others may disappear, and still others will be recombined in various ways into new asset packages. While this describes the general pattern of mergers and acquisitions, much variance can be found in the original goals motivating the merger and in the amount of integration to be found in the new emergent entity. Differences on this dimension of integration can be viewed as a continuum from low to high levels of intended integration. At one extreme, the acquired entity is left very much as a stand alone and independent component. This alternative can be described by an ownership holding company with little interaction among components. At the other end of the continuum, mergers may seek to fully integrate business processes, product lines, staffing assets, and physical plants into a single new combination. Naturally, in practice, particular mergers may take intermediate positions representing integration of some but not all business components. For example, IT systems and information may be combined but marketing or manufacturing may be left distinct. Where lower integration is sought, the firm is likely to be minimizing short term integration costs. It may be able to reinvest profits from one organization into the capital needed for investment and expansion in another product. Over time, however, with enough acquisitions, some costs may appear. For example, a firm with many acquired parts may find itself with many duplicative personnel, supply acquisition, warehouse, and other assets. It may, in fact, be more costly to integrate such replicated assets at a later date when the initial unfreezing phase of the change cycle associated with the merger announcement has passed. On the other hand, with a goal of higher levels of integration, the new entity has many challenges involved in the integration. Such challenges involve the quantity and timing of changes. Issues tend to be interrelated and involve personnel (retaining key personnel, making sure that the needed skills are allocated to the right tasks), culture (moving toward common decision making and conflict resolution approaches), and communication (conveying transitional messages quickly but also accurately). Greater efforts to substantially integrate at operating levels will, in the short run, engender more cost and more risk, but will also afford the potential for positioning for significant long-term benefit through creating synergies and reducing duplications. In general firms are faced with the M&A management paradox. Paruchuri, Merkar, and Hambrick (2006) describe this as “one of the central dilemmas in managing acquisitions.…” Because firm experiences costs and risks in aggressively pursuing integration immediately, there is a temptation to allow the merging organizations substantial independence to mitigate these costs and risks. However, in providing such independence, the opportunity to create synergies, which is often at least part of the rationale for merging, may be reduced or lost. In the short run, extending the time period for managing change may allow for targeted use of limited resources, but over time the accumulation of redundant business processes may be more difficult to integrate as the organizational “unfreezing” caused by the M&A will have refrozen into patterns less easily modified. The mechanics of higher levels of integration would seem to require (somewhat in this order) (1) an inventory of assets brought to the new entity by the acquiring and target companies; (2) a strategy for their restructuring; (3) reallocation or combining of redundant resources; (4) coordination of related but different resources, and (5) creation of resources for “gap-filling” and exploitation of new opportunities. This view is consistent with a phased perspective where activities in each phase of integration are potentially important. At least five distinct time periods have been recognized. First, there is a pre-merger period where each firm consists of a distinct set of competencies and assets. Second is a negotiating period where terms for merger are considered, where at least one side investigates the assets of the other and estimates the potential for increased value through integration. McKiernan and Merali (1995) suggest that as a result of various pressures, line managers eventually to be responsible for implementation are generally not included in these first phases. They suggest that this results in the failure to discover poor organizational fit at an operational level. Third is the period of announcement and approval seeking from stakeholders including shareholders and government regulators. Fourth is the early implementation including planning and building relationships. Fifth is the longer term implementation where new arrangements are to be exploited. These phases are referred to directly and indirectly in the literature but without analysis of the unique dynamics that differentiate each stage. A subset of the literature focuses on staffing. Much of this literature is about the attitudes of employees after a merger and techniques for improving the probability of achieving desired results regarding employee attitudes. For example, appropriate levels of helpful communication as well as high quality human resource practices are advocated to bolster morale (Nikandrou, Papalexandris, and Bourantas, 2000). This literature doesn’t appear to address a number of related issues including how different sets of job levels might be recombine; how differently organized sets of job descriptions might be reorganized; how future staffing needs are determined and how existing staff are evaluated for fit with future positions. There does not appear to be any literature on how to look for complementary skills for new team building or expanding implicit human knowledge capabilities. All of these issues would be relevant to a discussion of the merger of IT capabilities within the overall process of both human resource and technology integration. Another subset of the literature deals with the influence of variations in culture between the initial organizations. In principle, companies with cultures that are more alike should be easier to integrate, but complementary cultures may provide more opportunity to extend the range and power of the initial entities into a stronger emergent entity. Teerikangas and Very (2006) review literature showing mixed outcomes based on similar or different initial entity cultures. They consider both organizational and national culture and conclude that difficulties in grasping the multi-level nature of culture, the complex dynamics of the merger and acquisition process, and measurement issues contribute to the diverse results. Their conclusion calls for close examination of the underlying complex dynamics of mergers and acquisitions in the field as a base for observing stable relationships and presenting emergent theory in this area. In essence, they point out the difficulties of predicting outcomes from an initial set of variables without considering the mediating effects of managerial actions and the “micro results” and feedback loops that derive from these. Although some inferences can be made from overviews of integration in merger and effects of merger on staff attitudes, no similar subset of literature focuses on the role of MIS in the integration of organizations following merger nor on the effects of merger on the MIS function. This is in spite of an acknowledgement of the potentially critical role played by management of technology (James, 2002, p. 301). The Role of Information Systems There are two distinct facets of the role of the MIS function in the merger. These roles pertain first to MIS as a service provider to other organizational functions and second to the structure and assets of the MIS function as a division or department. Increasingly organizations are integrating MIS capabilities with business processes. The sequencing of activities, the use of information to support these, and the technology enabling them are becoming increasingly intertwined. Prior to the integration of merged or acquired firms, many high level business processes, with integrated information and technology elements, are loosely duplicated between the independent entities. For example, both entities are likely to have marketing, accounting, human resource, and production functions. It is equally likely that under the surface the business processes enacted by each entity differ from one another. In some cases these differences may be marginal, in other cases substantial. Within the same merger activity, the various business processes may range in their similarity or difference between organizations. As noted earlier, some organizations may allow the continuation of separate business processes while others may aim to integrate these rapidly into single new ones. It is likely that organizations will aim to integrate some rapidly and others more slowly within the overall portfolio. Strategies for such integration at the level of individual business processes may take a number of forms. Such forms include: (1) eliminating one approach and expanding the other for use by both former entities; (2) picking and choosing stronger elements from each approach (e.g. using the prospect approach from one marketing organization and the sales approach from another); or (3) defining a more optimal future approach and evolving both individual entities processes toward that new system (e.g. replacing different sales systems with a new more comprehensive CRM). Note that in the spirit of fractals which replicate at various systems levels such an approach can be mirrored at the business process level and at the overall departmental level. It stands to reason that a variety of capabilities will allow firms during an integration activity to perform this task more effectively. Such capabilities can be expected to include: (1) the ability to quickly analyze and understand existing business processes and how they are interconnected with information and technology capabilities; (2) the ability to select a strong approach at business process and departmental level toward achieving integration; and (3) the ability to dismantle older systems and implement new ones including approaches to expanding technology capabilities, testing, change management, and personnel training – both IT specialists and end-users. It is interesting to ponder whether theories regarding absorptive capacity, essentially state conditions that facilitate or retard the absorption of innovations, would be applicable in terms of the task of business process, information, and technology integration. The second perspective for considering MIS in the merger integration process pertains to the MIS delivery units as entities unto themselves. It is estimated that 2040% of MIS activity pertains to new projects and development, the rest to “keeping things running”. The importance of integration of MIS itself is emphasized by McKiernan and Merali (1995) who suggest that much of the failure of merger and acquisition integration results from poor management of information systems in the integration process. Issues include “definition of the new corporate information systems (IS), infrastructure requirements, the high cost of integration and development of information technology (IT) systems, and a reluctance to define both IS and IT in the ex-ante stage. (p. 55)” As alluded to earlier, the strategies available for integration at the business process level are mirrored at the department or divisional level. Organizations can (1) retain a single MIS department and continue providing all service from it; (2) pick and choose elements from both original entities for combination into a new entity; and (3) evolve both toward a single new entity, again this is easier to visualize where each entity is based on legacy capabilities and a new entity is perhaps designed around ERP or other organization-wide platforms. These alternatives are consistent with those proposed by Wijnhoven, Spil, Stegwee, and Tjan A Fa, (2006). Researchers have applied at least three theoretical lens to the examination of changes in MIS during merger implementation, though, perhaps a number of others remain unexplored. IT alignment lens (Henderson and Venkatraman, 1993; Hirschheim and Sabherwal, 2001), the resource-based lens (James, 2002), and attribution theory lens Vaara (2002) have been used to examine this phenomenon. The IT alignment lens posits that alignment of four elements will produce better results in IT strategy. These are the business mission and goals, the business infrastructure and processes; the IT mission and goals, and the IT infrastructure and processes. Wijnhoven et al (2006) examine the variables commonly associated this theoretical lens and, based on empirical evidence from three cases, expand this list of organizational elements that can vary during merger implementation. The resource based lens is more general in looking at firms as collections of assets which, for various reasons are difficult to transfer. In a merger or acquisition a new combination of assets is created. The role of MIS has not yet been studied in detail in the literature. Such study would require consideration of MIS as both a set of assets to be reorganized and as a supporting component of various other organizational assets. Another less clearly related view emphasizes attribution theory. Essentially this theory holds that people attribute success to themselves and failure to external circumstances. This lens played a large part in the investigation of Vaara (2002) regarding understandings of success and failure of mergers and acquisitions. This approach highlights the perception and interpretation of meaning used in evaluating events rather than in external or “objective” evaluation. For example, in a situation where a particular plant thrived but the acquiring and target companies both diminished in value, some representatives of that plant felt that the merger was a success. Clearly such judgments can be influenced by the position of different stakeholders and variation in their criteria for success. In seeking an overall measure of success in merger and acquisition activity, one is tempted to consider overall change in value, however, even this can change over time as the effect of the merger or acquisition blends with an increasing number of additional factors. Some additional prior research pertains specifically to how the MIS functions ought to be integrated among merging entities. An exemplary case study (Brown, Clancy, and Scholer, 2003) describes both IT organizations prior to integration, key decisions at the point of merger, headquarters decisions, applications decisions, and staffing decisions. It also describes management of the integration over the first 12 months focusing on internal project management, data center relocation, and equipment movement. Finally, it describes the next 10 months implementing an advanced call center routing system and migrating to PeopleSoft financials. The study presents 14 lessons of which some are likely to be robust across situations and others idiosyncratic to this particular case. Practitioner literature on this topic presents a discussion of legal issues pertaining to IT, contracts, and intellectual property (Montana 2000) and notes the complexity of integrating customized ERP technologies that may look similar but contain significant structural differences (Shearer 2004). The elusive dependent variable It is worth noting that the outcome of interest in the merger and acquisition is not as well defined as might be implied from the heavily financial orientation of such activities. In part this is because so many influences on organizational performance occur at the same time that it is difficult to isolate the impact of a particular event such as the merger. It is also because there are many different stakeholders for such an activity and it is unlikely that even the most successful merger will benefit all equally or the most unsuccessful work to the disadvantage of all equally. It is not unobserved that in some circumstances a merger can dissipate stockholder wealth, but create significant benefits for the management of one or both merging entities. In the financial stream of merger and acquisition research, stock price with various tactics for accounting for other influences such as overall market movement is used as a surrogate for whatever assessments investors take into account when judging value. This is based largely on the notions that large groups will combine individual judgment into accurate collective assessments and that information quickly distributes through the continual feedback loops of reporting and action that comprise an active market. Stock price, however, can be influenced by many factors unrelated to the merger such as shocks in supply of complementary goods, development of new products and production innovations, and many macroeconomic factors including interest rates, exchange rates, and trade deficits. Although statistical approaches can attempt to distinguish the effect of various influences on stock prices, this remains a fairly blunt instrument for measuring the variety of outcomes of the merger as they affect varied stakeholders. In the personnel stream of merger and acquisition research, the attitudes of individual employees following the merger are used as an outcome variable. For example, Nikandrou, Papalexandris, and Bourantas, D. (2000) measure levels of post merger trust as an indicator of success. Though it is logical that one would find alignment of positive worker assessment of the merger and the ability to create future value, there is little in the literature linking these attitudes to the financial value of the merged entity or to its change in potential for future value creation. It is also clear that the DeLone-McLean success model is also difficult to apply in this circumstance. Issues of system quality, information, and service quality might be reasonably used to contrast post-merger states of multiple organizations, however, the variations in quality among pre-merger entities, differences in expectations regarding service levels, and contingencies based on differing merger strategies present a staggering array of combinations. Contrasting post merger states may well mask a wide range of levels of challenge faced by different merging entities. Is the important characteristic the final result or the distance moved? Use is also difficult to apply to an organizational function in contrast to its use in assessing a particular technology. User satisfaction tends to line up with the personnel view if we consider satisfaction of both IT personnel and users of IT services. All this said, net benefits is still the difficult construct to conceptualize, much less measure. A potentially valuable outcome of this study will be the examination of what principals in the merger of IT functions themselves consider success to be comprised of. We would anticipate a combination of financial and personnel measures which may be instantiated through a set of goals achieved or not achieved, rather than through more direct measurement. The purpose of this research paper is to explore the range of aspects involved in the integration of MIS functions following merger and acquisition activity. To that end, more specific questions include (see appendix 1 for interview protocol): How do firms define and measure successful integration following merger and acquisition? What are the apparent outcomes of varied strategies for MIS function integration following merger and acquisition? What specific actions and tactics facilitate efficient and effective MIS function integration following merger and acquisition? What specific actions and tactics facilitate efficient and effective MIS support for merged business processes and other organizational assets following merger and acquisition? Method Based on a grounded theory approach (Glaser and Strauss, 1967; Locke 2000), the researcher will generate a comprehensive catalog of CSFs. Data will be collected through interviews with a wide variety of MIS and business professionals who have directly experienced integration of MIS functions between acquired and acquiring firms following merger and acquisition. See appendix one for the interview protocol. Where permitted by research participants, interviews will be tape recorded and transcribed. The study uses human subjects and been approved by the Saint Louis University Institutional Review Board (15379). Sampling of interviewees grounded theory studies is targeted to maximize the diversity of observations and test the robustness of tentative findings across related but not identical situations. Sampling is continued until data ‘saturation” or the unearthing of no new ideas is observed. Although the required number of interviews may vary from one study to another, users of this method tend to find saturation with approximately 30 interviews (Locke 2000). Data will be analyzed using a predominantly inductive approach were close observation of comments by interviewees will lead to elemental identification of factors. These factors will be clustered where similarities exist. They will also be considered in elemental cause-effect pairs (Larsen and Niederman, 2005) that will result in the creation of causal maps at the individual interview level that will be further aggregated across all interviews into an overview of the many interrelated elemental factors leading from management policy and actions to specific results. The use of causal mapping highlights the relationships between actions, policies, and outcomes. It both shows aggregated “big picture” effects while preserving details that may be highly influential yet subtle. The researcher has effectively used this method in a prior study of the role of Unified Modeling Language in project success (Larsen, Niederman, Limayem, and Chan, 2009). This study’s grounded approach will be similar to that taken by Graebner (2004) who looked more broadly at the overall integration issues involved with merger and acquisition activity. However, this study will additionally use a causal mapping technique for interpretation of detailed level findings. Current Status So far 10e interviews have been completed. The last is still in the process of being transcribed. These have included discussions with three CIOs, including one Fortune 100 company, three IT workers involved with the mechanics of completing merger and acquisition integrations, and two heads of departments specializing in MIS post-merger integration specialists at Fortune 100 companies. Initial observations include: Interviewees. Few interviewees have participated in only one merger or acquisitions, some have participated in dozens. As a result most interviewees provide observations on specific actions and policies that work and where their absence does not work; provide observations on variations in actions and policies that result from both varied circumstances and the effect of learning from prior experience. Size Matters. It is clear that the merger or acquisition of evenly sized entities either large purchasing large or small purchasing small differs significantly from large entities purchasing smaller ones. In the latter case, the purchasing organization can set up task forces and regular procedures to minimize the difficulty of such integration and regularize procedures. Generally with this situation the authority for action is in the hands of the larger firm, this is universally recognized, and the issue becomes one of most effectively creating the new IT entity. It can become a challenge in this environment for the acquiring entity to insure that it is carefully screening in the beneficial practices, employees, and assets of the acquired firm. In the evenly matched integration, many more issues need resolution before the integration of IT functions can move forward from a more technical perspective. It is often not clear how the overall new entity will operate, where lines of authority will run, and what the new culture will be like. The unresolved nature of these issues creates uncertainty about the larger needs and preferences that will structure IT decisions. As a result, the integration of IT may be slower, may take steps that need subsequent reversal, and may risk losing opportunities for retaining personnel, improving systems and services, and taking advantage of new license opportunities. Success measures. Success is rarely if ever formally measured per se, however, specific indicators may be measured rigorously and in detail, measurement of on-going organizational indicators continue to provide monitoring of merger activities in some cases, and setting goals and checking off their completion is a frequent approach to monitoring merger progress and ultimate assessment. Personnel. Approaches to personnel vary widely, from dismissing (over some time) all of the acquired firm’s IT workers to programs and bonuses for retention. In one particular case, the acquiring firm did not want to pay severance to the workers from the acquired firm so, reportedly, demoted them and gave extremely un-inviting tasks until the majority of these workers left without the costs of severance. Another tactic seen in multiple examples is the interviewing and assessment of all acquired firm IT personnel with the objective of matching skills to future needs of the post-merger organization. Culture. Virtually all respondents point to cultural difference as a key block to successful integration. The cultures of the firms overall may determine success of the merger. However, cultures of the IT operations do not always reflect the overall firm culture. A main descriptor of cultures that appear to be important specifically related to IT include “entrepreneurial versus reactive [researcher’s terms]” and “service oriented versus technology oriented”. It is interesting how the culture and individual workers’ attitudes tend to overlap. It is worth pondering if the judgment regarding the overall cultural colors the judgment regarding the potential of individual workers. Another aspect of culture pertains to decision making style. Organizations tend to vary on the politicization, the timing and speed, and centralization of decision making. Also organizational MIS varies greatly on amount of outsourcing. Although not frequently seen in interviews so far, where organizations vary greatly on their attitudes toward outsourcing, this provides special concerns for the integration of MIS functions. This is reflected in the findings of Meera and Hirschheim (2007). Where the acquired and acquiring firms vary greatly in these areas, they have a more challenging process to create integration in the new entity, Timing. It is almost universally held that the more quickly the difficult elements of the merger are handled, the more successful the end result. Learning. Almost no organizations had a formal approach to cultivating lessons from prior merger actions for their application in future ones. However, some organizations that purchase many companies have developed a procedure for managing such acquisitions. In one case a set of “tiger teams” move through a prescribed set of activities aimed at assessing hardware, licenses, procedures, and personnel then acting toward building the new combined structure. However, even in this case the respondents emphasized that all mergers hold surprises – some positive like systems that perform tasks or perform them better than the acquiring firm was aware of and others negative like systems with weaker than expected controls and governance. The key, according to this respondent, is moving through the structured program but with sufficient flexibility to take advantage of serendipitous benefits and minimize negative surprises. Virtually all individuals responsible for integrating IT following mergers use a checklist and everyone using such a checklist reported upgrading it periodically to integrate new learning. Interestingly, this process was always undertaken by the individuals involved and was not an organizational activity. Conclusion Clearly the research remains at an early state. Initial observations are subject to significant revision as the project moves forward. My intentions include finer analysis of specific actions taken in the integration process and the observed results experienced with these; more formal inductive analysis of interview comments; and the development of a contingency theory emphasizing differences in firm and merger strategy on the effectiveness of particular approaches to integrating the MIS functions from pre-merger organizations into the post-merger entity. REFERENCES Alexandridis, G., Antoniou, A., and Petmesas, D. (2007). Divergence of Opinion and Post-Acquisition Performance,” Journal of Business Finance and Accounting, 34(3 & 4), 439-460. Bresman, H., Birkinshaw, J. and Nobel, R. (1999). “Knowledge Transfer in International Acquisitions,” Journal of International Business Studies, 30(3): 439-462. Brown, C.V., Clancy, G., and Scholer, R.J. (2003). “A Post-Merger IT Integration Success Story: Sallie Mae,” MIS Quarterly Executive 2(1), 15-27. Brown, C.V., and Renwick, J.S. 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To add key sales and marketing personnel/competencies? v. To add to a diversified portfolio? 2. What merger strategy has been followed: absorption where the target company ceases to exist; symbiosis, where the strengths of each company are combined; preservation, seeking to retain the independent strengths of each merging entity) 3. What was the role of IS in discussions prior to the merger or acquisition? 4. What IT integration strategy has been followed? a. abolishing all IT of both partners and replacing them both with a new IT b. closing all IT in one partner and using the IT of the other combining the best of both parts c. coexistence with periodic synchronization of redundant parts. 5. How would you describe the culture of … a. b. c. d. e. The buying firm? The buying firm’s IT department? The acquired firm? The acquired firm’s IT department? The process of blending cultures following the merger 6. Changes in the competitive environment during the time period of the integration? 7. What were the corporate expectations regarding MIS integration requirements and associated costs? a. What sorts of measurements were made regarding the inventory of MIS assets and personnel and how were they valued prior to the merger and acquisition? b. What sort of planning was conducted (and when) for the integration of the MIS assets and personnel for the acquiring and target firms? c. What methods were used to implement the integration of MIS assets and personnel following the merger or acquisition? d. How were the integration results evaluated? At what point in time? How were “lessons learned” organized for application to future mergers and acquisitions? 8. Intellectual property a. What steps were taken to assure continuation of intellectual property value relative to IT assets? b. Where any of the following investigated? i. Patents ii. Copyrights iii. Licensing iv. Trademark 9. Process of IT integration? a. b. c. d. Who was put in charge of the integration of IT How was the technology portfolio assessed? What measures were taken to set up communication during the transition? How were physical technologies integrated? i. What special arrangements were made for “day one” performance? (integration of email, intranet, and file transfer, for example) ii. What actions toward consolidation of systems were undertaken? iii. What actions needed to be taken to integrate data and data structures? e. What actions were needed to deal with scalability issues? f. How were staffs integrated? i. How were conflicts resolved? ii. Internal conflicts among key decision-makers between and across the organizations iii. Development of roles and identities at the upper echelons of corporate hierarchy iv. Power relations between key actors v. People’s personal ambitions and projects 10. Outcomes (How would you describe the merger’s effects on a. b. c. d. e. f. g. h. i. Firm Financial performance? Firm Retention of key personnel? IT retention of key technical personnel? IT retention of key IT management personnel? Satisfaction of integrated management? Satisfaction of integrated IT management? Unexpected benefits? Learning from one’s own and others’ experiences Are there other important outcomes of the merger and acquisition process that you observed? 11. Overall, in your view, what actions or policies led to (or inhibited) the relative success of this project? 12. Is there anything we may have left out of the interview that you believe is important for understanding the role of management of MIS in the merger and acquisition process?