Post-Merger Integration and the Management of Information and Communication Systems: An analytical framework and its application in tourism

318 Pages·2004·18.83 MB·English

by  Alexis Papathanassis (auth.)

Alexis Papathanassis
Post-Merger Integration and the Management
of Information and Communication Systems
GABLER EDITION WISSENSCHAFT
Strategie, Marketing und
Informationsmanagement
Herausgegeben von Prof. Dr. Klaus-Peter Wiedmann
Die Schriftenreihe gibt Einblick in den aktuellen Forschungsstand zu
den Themenfeldern Strategie, Marketing und Informationsmanage
ment. Sie behandelt vor allem auch solche Fragen, die fOr die Unter
nehmenspraxis von Bedeutung sind.
Besonderer Wert wird auf die Praxisrelevanz und -anwendbarkeit der
Beitrage gelegt. Die Reihe will den Transfer wissenschaftlicher Er
kenntnisse in die unternehmerische Praxis fOrdern. Zielgruppe sind
daher sowohl Studierende und Wissenschaftler als auch Marketing
praktiker und Entscheidungstrager.
Alexis Papathanassis
Post-Merger Integration
and the Management of
Information and
Communication Systems
An analytical framework and its application
in tourism
With a foreword by Prof. Dr. Klaus-Peter Wiedmann
Deutscher Universitats-Verlag
Bibliografische Information Der Deutschen Bibliothek
Die Deutsche Bibliothek verzeichnet diese Publikation in der Deutschen
Nationalbibliografie; detaillierte bibliografische Daten sind im Internet Ober
<http://dnb.ddb.de> abrufbar.
Dissertation Universitat Hannover, 2004
1. Auflage Dezember 2004
Alle Rechte vorbehalten
© Deutscher Universitats-Verlag/GWV Fachverlage GmbH, Wiesbaden 2004
Lektorat: Brigitte Siege I 1 Nicole Schweitzer
Der Deutsche Universitats-Verlag ist ein Unternehmen von
Springer Science+Business Media.
www.duv.de
Das Werk einschlieBlich aller seiner Teile ist urheberrechtlich geschOtzt.
Jede Verwertung auBerhalb der engen Grenzen des Urheberrechtsgesetzes
ist ohne Zustimmung des Verla.9s unzulassig und strafbar. Das gilt ins be
sondere fOr Vervielfaltigungen, Ubersetzungen, Mikroverfilmungen und die
Einspeicherung und Verarbeitung in elektronischen Systemen.
Die Wiedergabe von Gebrauchsnamen, Handelsnamen, Warenbezeichnungen usw. in diesem
Werk berechtigt auch oh ne besondere Kennzeichnung nicht zu der Annahme, dass solche
Namen im Sinne der Warenzeichen- und Markenschutz-Gesetzgebung als frei zu betrachten
waren und daher von jedermann benutzt werden dOrften.
Umschlaggestaltung: Regine Zimmer, Dipl.-Designerin, Frankfurt/Main
Gedruckt auf saurefreiem und chlorfrei gebleichtem Papier
ISBN-13: 978-3-8244-8245-0 e-ISBN-13: 978-3-322-81879-9
001: 10.1007/978-3-322-81879-9
Foreword &Contents v
Foreword
Large-scale system-related projects are becoming increasingly important and visible in
the business world. This reflects the accelerating convergence of IT with business and
its importance in today's competitive economic environment. Extensive and complex
system landscapes exist, and have existed in companies (and between them) for quite a
while, serving adequately and unproblematically, organisational objectives. It is
arguable that such historically-evolved constructs do not represent a novelty.
Nonetheless, their re-design, adaptation and management, driven by strategic-intent
and events, is indeed a field well-worthy of research. A merger is likely to reveal such
a situation. Namely, the challenge of re-defining, adapting and managing the "wiring"
of the newly-formed organisation to enable the corresponding synergy realisation.
The inherent difficulty of researching in this field is posed the uniqueness
characterising each and every merger-situation. For standardised solutions / recipes
are likely to be too high-level to be of significant practical value, while highly
customised solutions are by definition limited to their wider application and coverage.
The author has correctly identified this difficulty and subsequently embarked in
achieving an optimum balance: A holistic conceptual framework allowing and calling
for customisation as to best serve the problem at hand. The main premise here is that a
solid and situation-specific understanding is the very first, and often underestimated,
step in dealing with the post-merger res challenge. The value of the author's
proposition is demonstrated through its application in practice. In a similar manner,
we believe that the proposition's usefulness, as demonstrated by the included real-life
case-study, will be replicated to other business instances. Last but not least, our hope
and ambition with this piece of work is to help increase awareness regarding the more
general notion that nowadays "wiring" is not just about "wires".
Prof. Dr. K.-P.Wiedmann
Foreword &Contents vii
Preface
Post-merger integration (abbr. PMI), not to mention information and communication
systems (abbr. ICS) in this context, constitutes the unglamorous part ofM&A practice.
It is analogous to the difference between a 100 meter sprint and a marathon. PMI does
not involve a small number of "top athletes" competing for "world records", "first
positions", "fame" and "high premiums"; it involves a large number of people at all
kinds of "competing levels" seeking to meet the marathon challenge... Which is to
cross the finishing line, regardless of rank! Like a marathon, PMI is an undertaking
where the event overshadows the individuals in terms of visibility, fame and status;
where preparation, pacing and stamina determine success; and where those who
actually do meet the challenge remain in anonymity. While the "big deals" are
extensively covered in the press, with their protagonists enjoying high status and
returns, those working in the PMI background, often for many years and with
continuous set-backs, have often only their own personal satisfaction should the
undertaking succeed... and a bum-out, to say the least, should it fail!
Despite all the above, PMI in general and managing post-merger ICS in particular,
represent a tremendous challenge for those involved and have very significant and
tangible consequences to everyone else. For that very reason, it is my belief that the
topic warrants research, which could be beneficial to many business professionals.
Given the increasing role of ICS in daily business life and success, they are the main
focus of my research in PM!. The starting points here are that:
Each PMI represents a unique and complex situation. Thus, there are no "recipes"
for success
ICS are detrimental to the realisation of synergies
Success comes through effective action enabled by a deep understanding a each
particular PMI situation and context
Accordingly, the objective, and hopefully the deliverable, of this piece of work is the
construction, demonstration and validation (i.e. case-study application) of an analytical
framework aimed at enabling a deeper and purposeful and holistic understanding of a
particular PMI situation and the ICS issues involved. Such a proposition, even though
"unglamorous", could assist with the conception and planning of the post-merger ICS
viii Foreword & Contents
integration effort, while contributing to the evasion of misguided and I or simplistic
activities and counter-measures.
This doctoral dissertation is the tangible product reflecting countless hours of study,
contemplation, and research. Even though I feel very privileged for having the
opportunity to conduct academic research on the chosen field, I cannot claim the full
credit for myself. Apart from those setting the theoretical foundation on which I could
build on, there those special few who have contributed their time and insights, guided
my efforts and supported me during my efforts.
First and foremost I would like to express my gratitude to my supervisor Prof. Dr.
Wiedmann, for offering me the opportunity to do this and for his academic guidance.
Not to mention the continuous coaching and encouragement. Particular thanks, to
Prof. Dr. Breitner, for his insights, feedback and support regarding my work
In addition, I would like to thank the "long-distance runners" ofTUI, the professionals
who took the time to share their knowledge and granted me with their trust by
speaking openly and honestly about their experiences concerning a long and
challenging integration journey.
My appreciation also goes to Andrea Loos and Stefan Krummaker for helping me deal
with the formalities and informalities of university life in Hanover. And last but not
least, I would like to dedicate this piece of work to my wife Anja, the "wind behind
me" in the "doctoral marathon", as well as to my daughter Valia who unwittingly
motivated me, with her arrival in this world, to complete my research in a reasonable
amount of time.
A. Papathanassis
Foreword &Contents ix
Table of contents
1.0 Introduction 1
1.1 Research topic 2
1.1.1 Dissertation title elaboration 2
1.1.2 Key definitions & underlying assumptions 2
1.2 Research imperative 5
1.3 Research methodology 8
1.3.1 Research methods: Opting for a post-positivist approach 9
1.3.2 Appropriateness of case-study choice: World of TUI 10
1.3.3 Research techniques adopted 11
1.4 Structura110gic of the dissertation 13
2.0 Literature review 15
2.1 Merger literature and research: Theoretical context 15
2.1.1 Merger value: Empirical data and the synergy limitation perspective 17
2.1.2 Merger motives: Socio -psychological motivation theories 24
2.1.3 Merger management perspective 26
2.2 Merger theory and practice: Evaluation and implications 39
2.3 The role of post merger integration in mergers 40
2.4 The importance of information & communication systems in post merger
integration 41
2.5 Establishing the basis for the creation of a management framework for
post-merger IeS 43
3.0 ICS Management within post merger integration: analytical frame
work construction 46
3.1 VIP concept: The path from vision to process 46
x Foreword & Contents
3.2 Towards an integrated concept for ICS management within mergers 48
3.2.1 The dynamic nature of value creation in mergers 48
3.2.2 PMI visualisation 50
3.2.3 Rules of the integration game 51
3.2.4 ICS management competence 53
3.2.5 ICS integration strategy 56
3.2.6 ICS development process 58
3.2.7 ICS programme organisation 65
3.3 Post-merger ICS management concept overview: Managing systems for
integration value -POMICS 68
3.4 POMICS application variants 70
3.4.1 Initiation: Merger feasibility and integration planning 70
3.4.2 Mid-way: During integration 71
3.4.3 After: From integration experience to knowledge 72
3.4.4 Applying POMICS in the context of the case study 72
3.5 Synergy equals syskepsis and synpraxis 73
4.0 Concept of value in tourism mergers 75
4.1 Mergers in tourism: Historical overview and rationale 75
4.1.1 Vertical integration in European tourism: Historical success
challenged by the future 75
4.1.2 Horizontal integration in European tourism: Meeting future
challenges 79
4.2 Key sources of merger value in tourism 80
4.2.1 Value generation in tourism: Complexity and dynamism 80
4.2.2 Integration synergy levers: Accommodation & carrier 88
5.0 Integration meaning in the world of TUI 98
5.1 Integration visualisation: The Y model 98
5.1.2 The world of TU! and the Y model of integration: Brief description 99
5.1.2 The Y model as a communication instrument 101
5.1.3 The Y model as a tool for achieving commitment 102
5.1.4 The Y model and the risk of misalignment 103
Foreword &Contents xi
5.2 Y model ofIntegration: Strengths and risks 107
5.3 Rules of the game in the world ofTUI: Integration of equals 108
5.3.1 TUI's integration rules: An overview 109
5.3.2 Rule awareness: Implicit understanding & intention-perception gaps 112
5.3.3 Rule validity: A reality check 115
5.3.4 TUI's Integration rules: Strengths, weaknesses and change
management needs 117
5.4 Evaluation of visualisation - integration game rules relationship:
Implications 119
5.4.1 The need to critically evaluate the Y model 119
5.4.2 The need for change management: Resolving rules - reality conflicts
& bridging intention-perception gaps 121
6.0 ICS integration potential in the world of TUI 122
6.1 The importance ofICS for integration in TUI 122
6.1.1 Dependence of operations on existing systems 122
6.1.2 From Titan to Apollo: Establishing ICS in the overall integration
effort 123
6.2 ICS management competence 126
6.2.1 A pre-merger independent assessment of IT capability 126
6.2.2 IT Human resource assets: "The curse of Sisyphus" 127
6.2.3 Consolidation of technology bases, system landscapes & data
structures: The burden of history 128
6.2.4 Consolidation equals standardisation: The challenge ahead 134
6.2.5 Relationship between IT and business: Strong separation between
responsibilities and the need for business analysts 136
6.2.6 ICS Competence in the world ofTUI: Interplay offactors 138
6.2.7 ICS competence in the European tourism sector: Similar issues
facing the rest large integrated groups 142