Mergers and acquisitions are supposed to be seamless, creating a greater, more efficient, leaner whole. The reality, more often than not, is that workers and managers from both sides end up fighting like cats in a bag.
Research by HR consultancy Hay has suggested that more than nine out of 10 mergers fail to achieve their stated objectives, and virtually all Ė 97 per cent Ė of UK mergers and acquisitions fail in the same way.
In fact, senior executives regularly described the early months following an M&A as, at best, a "culture shock" and, at worst, as "trench warfare".
Just as worrying, fewer than a third business leaders believed all this M&A pain had created any significant new value.
The analysis of more than 200 major European M&As since 2003 has warned companies that using M&As as a key growth strategy, as so many now do, can be short-sighted and dangerous if managers fail to grasp the bigger picture of what they are doing.
Last year saw M&A deals exceed Ä1.35 trillion, while $90 billion of new deals were announced during the first week of October 2007 alone, said Hay.
Successful integration therefore continued to be an ongoing challenge for many global businesses, it added.
The primary cause of M&A failure was normally critical omissions made in companies' due diligence and post-merger integration strategies, it added.
Firms too often prioritised financial and systems' due diligence at the expense of the intangible assets critical to a merger process, such as business culture, human capital, organisational structure and corporate governance.
More than nine out of 10 business leaders polled made traditional due diligence a high priority, and more than half focused on IT systems' integration.
Yet nearly six out of 10 admitted that over-prioritising systems' integration had resulted in an insufficient focus on intangible assets and cultural integration.
More than half of the business leaders polled believed this subsequently made the risk of failure more likely.
Some 54 per cent also felt that neglecting to audit non-financial assets such as business culture increased the danger of making a wrong acquisition.
"Integrating intangible assets six months after a deal has gone live is too late," argued David Derain, a director within Hay and leader of its M&A work in Europe, the Middle East and Africa.
"Companies should be examining the compatibility and differences between the two firms well before the deal is made public, in order to have a clear plan of action in place right from the start," he added.
Another key failing was a lack of clear information. Seven out of 10 of the senior executives polled believed it was too difficult to obtain intelligence on the corporate culture and human capital of M&A target companies.
Half pointed to the need for a robust form of reporting on intangible assets, while two thirds saw internal indicators such as workforce performance as more reliable predictors of success than financial data.
"Companies which fail to take into account the cultural, human and structural assets of the target firm will fail to deliver against their objectives in the long-run," said Derain.
While business leaders paid lip service to the need to audit and integrate intangible assets, there was a worrying lack of focus on these not only during the due diligence stage, but also as part of post-merger integration strategy, said the research.
Just over a tenth of business leaders felt that engaging and integrating senior management and the workforce was given high priority as part of their company's integration strategy. And as many as 70 per cent admitted they had failed to prioritise such intangible assets.
Slightly more than a quarter analysed the cultural compatibility of the firms to be merged.
Just over a fifth carried out a human capital audit. And two thirds failed to make a leadership capability review a priority.
All this was having a disastrous impact on the success of the integration process, according to the executives polled.
More than three quarters of acquired company employees opposed their mergers, half of them actively, the research found.
And more than a third of business leaders expressed dissatisfaction with the post-merger climate.
A fifth described the early months as "culture shock" and a further 16 per cent even went so far as to label the atmosphere as "trench warfare".