Acquisitions flounder because of the people side, the soft side. That is the reason for failure in three out of five cases.
Therefore, it is essential corporations take into consideration the general factors in acquiring company such as, the target company's market position; its products or services; the degree of customer satisfaction with these products/services; the uniqueness of the product/service line; and potential threats to or weaknesses in the product/service line. In short, look at how viable the company is. Since the goal is also to integrate the acquired company into, a lot of time should be devoted to examining how to ensure a smooth integration of cultures. This means paying close attention to people issues. If people are not united around a common vision, and they don't understand their individual roles, responsibilities, measurement systems and reward systems, the confusion that results can be both demoralizing and inefficient. .
In practice, an acquisition integration manager is appointed whose full-time responsibility is to integrate both organizations. This executive acts as the liaison between the acquired company and the business leader who is responsible for the acquisition. So vital does a corporation consider the integration manager's function that the individual is identified well before an offer letter is sent to the Target Company. This lets the integration manager become familiar with the Target Company, while also ensuring that if an offer is made and accepted, the acquirer can hit the ground running. For example, the integration manager can be prepared with a communications plan that announces the takeover to employees and answer their questions. It is best to be proactive.
Another non-trivial aspect of managing the human side of acquisitions is coping with executive egos. These are generally dealt with during the negotiation process. Unless this is done, an acquisition can fall apart for as seemingly trivial a matter as whose name is on a certain parking space.