A Successful Merger and Acquisition (M&As) seems to be the magic answer to the globalization of the economy. Every day new business operations of this nature are announced in newspapers all over the world. However, only 30% of the M&As are successful. This means that, in most of the cases, when you add 1 plus1 is not equal to 2, but 1,5.
Studies of numerous cases of M&As have shown that the formula of success is made up of, at least, three basic fundamental factors.
First, you have to think about the strategic vision that you will have with this new entity and of the value added that will contribute to this new merger. Second, choose the best similarities of the different cultures that shared same or similar values and that will make or empower your organization. Finally, make the integration process to be well managed.
This last statement is very delicate. Because if you think carefully the value of a company is changing from the tangible value factors in the past to intangible factors, that are appearing to be extremely valuable, e.g., the clients and the personnel. Of course, those are obviously the ones that we don't buy. We should change our way of thinking and we should convince them that the merger will be profitable for them; otherwise, they simply leave and or are fired because they create chaos in the process and leads to the destruction of value of the company.
The integration is not a mere arithmetic operation, but rather it requires, to be very careful, and especially to have tact in order to avoid a rupture between the winning assumptions and the presumed losers.
The first step is to define who will be the "Architect of the Merger" and quickly clarify the situation to the top management level, to avoid the concern of a future stagnation in the main level of executives of the company. The decisions taken should be objective and applied with judgment in order not to generate a "war of clans." Also, it means to constitute a mixed and quite balanced team that will really do the job for you "all the way, just for the success of the merger."
The next step is defining the rules of the game clearly, where the fairness and impartiality of the Architect is completely reliable, with no question, whatsoever. At the same time, during the whole process is required a good plan of communication, without it, the field is left free for all kind of speculations and uncertainty. The speech should be coherent with the acts and vice versa.
The management team should define their plan of action quickly and put it in progress immediately, in order to avoid deception and the risk of being left in the middle of road.
The biggest problem, is that all the energy could be absorbed solving internal problems of the M&As. If this happen, it is possible that when you loose control of the administration and of the business, this will create a great benefit for the competitors.
So, in order to completely successful, the merger cannot be a mere absorption of one company to another. On the contrary, the result should be "in the creation of a new entity that arises with their own culture, that emerges with the best of each one of the parts, and able to develop new internal process in order to be more efficient."
Under these conditions; all "clients, personnel and shareholders will be winners."

In today's world one of the mayor reasons that we are seen so many Merger and Acquisitions (M&As), is due to the fact of the economic globalization of the world. The world is becoming smaller and we will continue to see more and more M&As in the future. As the financial and economic world integrates more and more, companies must compete globally, and they will have to merge to find and use in the best way and in different parts of the world low cost labor, low cost raw material, but in the other hand, they are to transfer advance technology and knowledge to poor areas in the world, and in return will help society to develop and integrate faster as whole. Companies are certainly searching the cheapest sources of labor, and raw materials, but yet there must be consensus of how we do things. Many experts explain that the growth is due to economies of scale, other that companies become better, more efficient becoming bigger and producing more. My personal view is that they merge because in order to compete globally and gain market share they have to compete with larger companies and if they do not act jointly they simply cannot compete. In my opinion in order to achieve this important task you must take into consideration "Strategic Management and Good Leadership" in order to be successful. Now, the most important question is how do you find the perfect fit to make this possible. So the main issue is "How to fit".
An important factor to mention in here is that unfortunately not all M&As have been successful, for the contrary they have been a disaster they continue move forward. They are not finding the perfect fit (see attachment I). There is an entire process that companies go through when they merge together. Some of them worry over personal matters, administrative matters, and others about implementing their way of doing procedures, equipment, styles, culture, philosophies and many others factors. We could say that M&As are becoming a common word in the business world today. Therefore, how a Theory is defined in dictionaries and encyclopedias, we must understand it. A theory: is the act of viewing, the contemplation of reality, a belief, a policy or a procedure proposed or followed as the basis of action. "A man could learn better from actual experience than from a book". It is also a coherent set of hypothetical definitions, conceptual and pragmatic principles forming a general frame of reference for a field of inquiring as for deducting actions such as the importance that the research undertaking will be significant; and how its findings will contribute in the world of business knowledge. Also, in how should be considered and undertake the correct actions in order to be successful in a Merger and Acquisition process. Therefore, based on abstract knowledge v/s practical experience, we could say that based on abstract knowledge, in theory, M&As is the easiest way to provide a rapid method of creating corporate strengths, gain competitive advantage, correct weaknesses, synergies and many other problems or solutions. But we could also say that in practical knowledge a theory of M&As are not so easy to achieve. Because, before you take the decision to enter in the M&As process; the success of it will only depend in finding the perfect fit of both companies, reaching that perfect fit and how to taken into action that perfect fit, it must be accompanied by a very well orchestrated strategic plan and by it must be guided by a brilliant Leader. Mistakes are most common, because nobody is perfect. But you can prevent things from happening; you can take measures in order to succeed. In my opinion there are two basic principles that you must adopt in order to maintain the process on track, alive and achieve the real goal: "One of them is Strategic Planning and the other one Good Leadership". Otherwise, you cannot make things happen.
This mergermania wave has taken place in the USA in last few years, and now, Europeans are entering in the game (strongly), and finally, both Americans and Europeans are the main players. The Economist states in one of its articles. " This consolidations do make sense - at least on paper (Exxon - Mobil hopes to save several billions of dollars a year). But study after study of past M&As has showed that two of every three deals have not worked. The only winners are the shareholders the acquired a firm. Who sell their company for more than it really is worth". The real success will depend in their ability to create added value. One of the main problems is the culture, philosophy, and these differences can poison collaboration. The future in the M&As process is going to be a fascinating field of study, now and in the future. Powerful people will be needed to clean up the mess when thing go wrong. Stars in negotiations, brilliant speakers, and charismatic personalities. People with a lot of wisdom, people with Leadership. Imagine that M&As affect the lives of many individuals in the company acquired and the one that is acquiring another, affects business and communities, represent substantial changes to industry & organizational structure. In one hand the society as a whole. In the other, impacts efficiency and competition, additionally the Target Company has to be worth more to acquirer than anyone else is. To maintain a balance you must establish good leadership, open channels of communication, indicate what is happening to personnel, explain why it did occurred, have the will to answer questions, invite people to meetings be simple and transparent, create new things to be innovated, motivate people, involve people in decisions create policies of transition and most importantly create vision of future. A clash of culture and values often occurs when one organization acquires or merges with another. This clash or difference in culture and values is the primary reason for disappointment and failure in acquisitions and mergers.
Taking in consideration that there are a lot of failures, the graphic (see attachment II) it shows that despite the fact that there are a lot of failures; M&As continues to growth.
Perhaps is not too difficult to explain: the reason is simply: "Globalization", if you do not get there first, your competition will.

Suffice, is to say that strategic management refers to the set of managerial decisions and actions that determines an organization's long term future. It is about designing the corporate organization to provide a product or service that will have value for customers or clients. It focuses on positioning an organization relative to other organizations to ensure competitive advantage. Strategic management provides a rationale for coordinating activities throughout the whole organization. Sometimes, you must look strategy like in a war basis, you must look what is behind, you cannot make a move until you are sure that you have a superior force. You must learn the rules of the game, and when everybody thinks that you are good at it, change them that it will surprise them. In terms of risk, always do something that someone else thinks you will never do. (Of course always, limited by a fare play), taking into consideration, laws of ethics, policies and resources. A good strategist always assumes several situations. Must gather information, create scenarios, consider the external and internal environments, look into your strengths and exploit them search for your weaknesses and protect them. Look what is best for you. Study the Industry, do an analysis, look for issues, recognize if there are problems, search for alternative solutions, select the best one, implemented a Corporate Strategy and control it (see attachment III). Involve managers, make them participate, teach them, tell them that they are paid to take decisions, teach them about the organization. Teach that they are responsible for their job, give incentives, teach them that they must delegate, that they have to teach others about their job if they want to advance, look for people that make an effort in make people advance. Teach people about loyalty if you are loyal to your employees, they will be loyal to you. Must give a vision -- If you are going from A to B, you must understand and know why you are moving there. There are so many factors, tools, and ways to search for good strategies, but most importantly, there are too many issues but try to concentrate in basics of Strategy seeks to, because Strategic Planning helps you to:

- Find and exploit your competitive advantage

- Strategic planning helps to implement and maintain advantage

- It helps you to develop tactics, take actions and achieve goals

- Give you efficiency doing the right things.

- Helps you discover on time critical factors

- To design
In another words, there are so many things that we do not see because most people and companies learn meanwhile thing occur. In another words in a day-to-day basis. Without Strategic Planning and knowing your surroundings, it is very easy that you will not be able to achieve your vision and your goals.
William Werther, professor at University of Miami states that "The purpose of Corporate Strategy is to gain a sustainable, competitive advantage over competitors." Corporate strategy is and will remain changing, because the environments are constantly changing.
The most important factor is always to gain a sustainable competitive advantage. He also states in summary the following:

• Strategy: seeks to find and exploit a competitive advantage.
• Strategic Planning: identifies the actions needed to effectively obtain and maintain a competitive advantage.
• Tactics are the day-to-day actions taken to achieve the overall strategic plan.
• Efficiency is concern with the conservation of resources, more directly, "Doing things Right".
• Critical Factors for Success are those limited number of business variables that make the most substantive contribution to business success.
• And finally, Strategic Fit is the match between customer’s needs and organizational Strengths.

If you have to review the Merger & Acquisition process of this two companies they must understand that they have to go through it, and must make sure that in order to be successful in the integration process. Loctite and Henkel and in their Strategic Management plan, the companies must check and must monitored at all levels their activities. The Management teams must find at these stages its Core Competencies & Capabilities (of each company) their perfect fit. (It will be analyzed and described, further down in Porter’s Five Forces Model).
Therefore, in Strategic Management the fundamental Basic steps are:

• To define the mission statement: a company must answer where are we, where we want to be, and how do we get there. To answer this in turn, you must make a detail analysis of the firm internal strengths and weakness, external opportunities and threats to confront it.

Identifying, nurturing and capitalizing on a firm's core competencies and capabilities are key elements in the development of a strategic posture are likely to lead to superior performance. Core competencies/capabilities are bodies of expertise, organizational skills or systems, which are perceived by the customer as providing exceptional value. They are substantially unique, and they typically lead the company into new products and/or markets. Medium sized companies are likely to have few things, which meet these criteria; but in fact, few are needed, as many competitors will be found totally lacking in this area. High performance companies will have clearly understood core competencies, medium to low performers either will not have such competencies, or will fail to recognize and capitalize upon them. As it builds its Strategic Plan, a company should systematically identify its position with regard to its core competencies/capabilities. Management tends to focus on their own areas of responsibility and fails to see their own company's larger picture. Often, rephrasing the question to identify a firm's "competitive advantage" can help the identification of their structure. Having identified current competencies, the company needs to carefully assess the likely viability of them into the future. In this world of rapid change, competencies, which provide superior performance today, could well be eclipsed in the future by newer competencies more highly valued by the customer. Corporate Strategy must be skilled in helping other individuals accurately to assess their position with regard to core competencies/capabilities. More importantly, they provide important guidance in the development of appropriate strategies for building and capitalizing on those competencies. This is where the path to superior performance often begins and adds value and to give the right organization to your company, there are three classic strategic structures:

• Ethnocentric: Typical of a multinational structure (centralized Hub), mainly flows of goods, tight, simple controls key strategic decisions made centrally.

Basic rationale: relies on scale economies and learning to develop and sustain a low cost cutting via learning curve effect transmitted by parent to subsidiaries.
Key Features/Implications: the company strives for globally standardized products, targets market niches that are similar internationally. Strong headquarters involvement at all levels, often the co. Overlooks new markets, extensive communication needed (hard to achieve over long distance

• Polycentric: a polycentric organization is managed in a decentralized manner, local affiliates have a high level of autonomy in decision making therefore they are very responsible on their local market conditions.

Decentralized Federation

• Geocentric: an organization management style in which the firm views the whole world as its relevant market for decision making, and in which no one country dominates these decisions.

Distributed, specialized resources and capabilities
Large flows of components, products, resources, people, and information among interdependent users
Complex process of coordination and cooperation in an environment of shared decision making
Basic rationale: optimized ethnocentric and polycentric systems. Key Features/Implications: The company is typically organized on a matrix basis – product and geographic divisions. . Best structure for handling changing market preferences and new products, internal communication is critical, Key personnel developed over the long term and on the basis of global experience.
These strategies aim at capturing companies’ best growth opportunities and defending against external threats to its
This is the firm that it is called "think global, act local", or Transnational well being and future performance. A well-conceived strategy attempts to build upon both companies’ strengths and correct important weaknesses! At the same time, at the strategic planning process i.e., you will do a study of the Industry based on an exhaustive detail of the industry and give recommendations for the companies which type of strategy to be implemented. e.g., a corporate strategy in terms of what are you good at (in marketing for example or low cost manufacturing), or by Business Units (Competitive), or a functional strategy (support) or outsourcing. To do this study you usually do apply a Porter’s Five Forces Model analysis.
In simple words, Strategic Planning is best described simply as: "How to get where you want to go, with what you have or can get." But you must study your environment internally, as well as externally. Another, way to measure your company value added is by measuring the Traditional Value Chain, (see attachment IV) it describes, how most companies evaluate their value added or how other companies are changing their way of evaluating their Value Chain Model, as in the case of Ikea Company.
But global competitiveness in the new Information Economy is forcing us to change some of our basic business paradigms. Increasingly, information and communication technologies are stripping out time and distance from the value chain of organizations all over the world, and are often a part of a distant ‘local’ value chain. Companies are using the new global information infrastructures like Internet to outsource work everywhere, even to their customers! New emerging electronic commerce is changing the future of organizing your company structures, today must start thinking in the future you end up even to have a company with a Virtual Organizations Structures in Internet. Global information and communication resources are becoming available to everyone at extremely low cost. This shrinking importance of bigness is creating an explosion of small and medium sized business around large conglomerates. For the conglomerate the management of alliances with these multiple business partners and the challenge of tying the whole together into a ‘business network’ that adds maximum value to the customer is a new management challenge and requires new corporate competencies and organization.
From a business view this mutating value chain may appear chaotic and exceedingly complex. However, from the customer’s view this new attitude to the marketplace provide the best of all worlds - providing products and services any time, anywhere, and a world of unparalleled choice. Finally, in strategic management you must also take into consideration the mentality of the company and they vary from:

- International: Home Market Dominates (Coca, McDonalds, replicate everywhere)

Combining these strategies guides you in how to optimize and structure your company. And in my own personal opinion the world is moving towards that way.

Everywhere we look we see leadership, in politics, local government, regional, national, global, religious, military, home and of course in business. According to Ph.D. Professor, Sanford Ehrlich from San Diego State University. You do not need a formal position to be a leader. A leader does not manage things, a leader leads people. Not because you earn a paycheck makes a difference in the measuring people’s life. "Leadership is a noble pursuit". When you find a real leader you will see that is not power or money what he/she is after on the contrary they are searching to leave a mark, a statement "Javalquinto was here". Pillars of profit by Shlomo Maital. "The New General Manager", a real leader their wildest dream with is to say the impossible is possible, to make the world better, to give opportunities and the pay is secondary. (see attachment V)
What characterizes great leaders: High capacity to store information and data, and how to associate them to extract logic and rational responses out of it and at the right time. Another, characteristic is the assimilation of a clear vision of things and is able to go straight to the point or problem. But must importantly, is to express his/her feelings strongly and with determination, which demand in reality a lot of energy and a lot courage.
Definition of Leadership: Leadership is a process between leaders and collaborators through which we achieve appropriate actions beyond the expected.
Basic principles of Leadership: Desire (assume a role), Commitment (lead with example), Responsibility (to your self and your team), an Accountability (Believe in your word). In the world that we live, you will have to select the right leaders. They must require, a clear vision, respect different aspect of leadership such as power distance, masculinity v/s femininity, individualism v/s collectivism, strong v/s weak. He/she will require modeling the way, to encourage the heart, search for justice and lot knowledge.
Evaluate yourself, and find you’re individual values, and that will clarify the purpose of your life. In an M&As process you must find Leaders of Change that will lead you and your teams to find the perfect fit. Leadership and Innovation, Ph.D. Professor, Sanford Ehrlich states that "leadership is inextricably committed to the process of innovation, of building ideas, methods or solutions into use. He adds further that the leader must be able to make decisions under conditions of extreme uncertainty. Therefore, how do you find or create a leader. You star with yourself. Then with others. Are they self-made, are they born, did they gained by experience. It really does not matter how Leaders arise, what it matters is that when you are leading people you could find out more or less if some people can be leaders or if they can not. There several ways, and one of them is having them taking the "Leadership Practices Inventory Test" (see attachment VI) This test at least will help you to see their behavior and skills. The test will guide you to find the leaders that you need especially in M&As process.
Leader of Change, is a person that with his/her attitudes will be able to make an organization to change. The process itself has only three parts to be considered in order to influence people organizations or change: The Final goal is to give have a Clear Vision, to people follow thoroughly, otherwise uncertainty create chaos and take your company go down. Be clear to people and show them that you are a Change Leader and tell them:
First, Where are we? / Where Do We Want To Be? / How can we get there?
Planning work is far from easy. "Is it, senior management's responsibility to plan for the future; no one else in the organization can do this job?" Is that a fair statement, should it really be that way or should more people be involved? Second, the payoff is high because strategic planning alerts an organization to opportunities and dangers in the world around it and focuses everyone's efforts toward a planned future. Strategic planning and leadership can save companies in trouble or keep things under control when a company is growing explosively. Let us consider each part of the process:
Where Are We?
Here, management looks at financial history, marketing position (products, competition, and market share), problems and opportunities. Although companies ought to have this information available, they often do not and a lot of hard digging is required to build a reliable foundation for planning decisions. That is bad.
Where Do We Want To Be?
A time for visioning, creativity, and looking beyond present issues. We ask the corporate equivalent of the age-old question: "What do you want to be when you grow up?" An exciting vision galvanizes everyone: Ford declares, "Quality is Job One!" Then we make our vision concrete by setting measurable goals for profit, market share, and the like.
How Can We Get There?
Here Leaders must develop strategies to accomplish your goals. The planning team uses all they know about their companies and their business plus all the creativity and strategic thinking they can muster to conceive new directions that will carry them into the future. Leaders of Change, their decisions will be continuations of the tried and true, they are determined and some will astonish the competition. All are tightly connected to the goals. Finally, they will develop action plans to execute strategies. Each has costs, staffing, payback, and a time line. The sum of action plan projects over, say, the next three years, represents the expected value of your planning effort. Start on them at once, remembering: Planning is not about what it will be done in the future, it is about what you will do now to make the future all you want it to be.
Second, Market Focus
Leaders of Change will not loose Market Focus Strategic Issues; they are fundamental to the long-range viability of most firms. In fact, the Strategic Issue in many firms is a lack of Market Focus. That is, the firm has not systematically defined its target market segments and their priority. Effective decision-making is based on good data on existing markets, including the current position in the market. Henkel had a clear idea "Enter in the USA market", the profitability obtained from serving that market and the outlook. Of it was great. Often this data is severely limited, requiring substantial preparation for effective decision-making.
Good Leadership will continue to search for new market opportunities is an Strategic Issue for both companies to help in that perfect fit that is frequently encountered, obtain the most of it. Requiring an understanding of the firm's capabilities and competencies, this area demands good external vision, seeking out previously untapped opportunities and an understanding of the impact of environmental changes. While the issue for some firms is finding new market opportunities, others need to focus on their target market, as they find themselves spreading their resources over too many different market segments. Careful analysis of existing segments will add value to the firm and their outlook will lead to the best decisions required.
As a Leader or as the New General Manager (Shlomo Maital) most knows a lot. I think that decisions need to be communicated horizontally and people simply need to be certain of all the facts. In some cases they do not know what was happening in the company. A leader must help your employees, guide them and lead them demonstrating awareness of their feelings and reassuring them changes will not devalue past contributions. In this case, Henkel - Loctite are a tremendous corporation but there is a lot of lack of communication, and most importantly uncertainty in the future. As mentioned above, the basic principles of leadership states that you must Have Desire, Be Committed, Be Responsible, and Be Accountable. In the global aspect I believe that both company have achieved that, but at the local level not, there are to many cultures. e.g., just think for a moment in the Exxon – Mobil merger. They are already talking that they will cut 7,500 employees. How do you think people is reacting right know. As a Leader of Change you must watched your planning team develop Action Plans to meet corporate objectives. Whether or not they recognize it, they have become change leaders: your people are going to have to do things differently - - like the Leader. Understanding what they and their people are going through will make implementation better and faster and your leadership more effective. The basic issue is that although the rate and intensity of change has escalated over the years, human nature has stayed the same. Research shows that people goes through an inescapable cycle in dealing with unsought change. After all, change means the end of old ways and the start of new ones. Even though your planning team initiated many changes, they are not immune; they just start farther along in the cycle. To begin with, people do not change because they are told neither to nor because of information: labels have small impact. Rather, people change when they feel that their anxieties about loss of competence, territory, and control are understood - - that's human nature. As mentioned above, your job is selecting Leaders by the LPI test and makes your team's job demonstrate how important is the understanding of change, but "as a team". At first, people focus on things as they were and deny the change; be very clear that change will happen and allow time for the news to sink in. As Leader of Change you will find yourself repeating the vision and its objectives again and again. Next, people turn inward preoccupied about what will become of them; they get angry and resist. This is a time to listen, acknowledge feelings, and deal with some of their concerns. When the need for change has been made clear and feelings acknowledged, they begin to explore what is new and consider how they might deal with it; energy is released. This exploration phase is chaotic but here is where opportunities live: every soldier knows that war means medals and promotions. Give your people resources; set short-term goals, train and brainstorm. Finally, they are ready to commit. Now you can set longer term goals, build the team, and look ahead. When 5% of your team commits, change is embedded; when 20% commit, it is unstoppable. Reward and celebrate innovation and accomplishment. As a Leader of Change you must detect those who cannot change; they are the casualties of war. Successful change management means understanding that change is difficult, treating your people humanely, allowing time for them to turn the corner, and trading your control for their individual self-direction and ingenuity. For the Leader of Change, it means being a champion among champions managing the company in a whole new way. As Leader of Change you must find stars and they have to become Team Managers:
Third, Team Project Managers: must: specializes in assisting organizations in crystallizing the real culture and values of an organization, modifying, where appropriate; communicating effectively throughout the organization and winning the commitment is very essential to continued success. To find what are your real "Strategic Issues in the company", create Cross-Functional Teams. Top performing organizations provide some great lessons about managing strategic change and the benefits of employing teams for that demanding responsibility. Leaders in those firms demonstrate the obsession toward performance by broadening and elevating the responsibilities given to teams (action plan teams, cross-functional teams, and self-managed teams). Teams—starting with the CEO's team—represent a leadership tool or discipline that serves as a basic building block upon which the entire organization and its change management rests. The cross-functional team is simply a group of people who come from (and often represent) different parts of the organization and who are committed to a common purpose. The team will approach achievement of performance goals in a manner in which they hold themselves mutually accountable. Within each cross-functional team are the implementation skills and business knowledge necessary to seize opportunities and / or wrestle with complex strategic issues. To be successful, select the team participants with care, gain the support of those affected, and give equipment to all with prerequisite skills and tools. "Sooner or later Strategic Planning degenerates into work…" an acid test is the ability to accomplish the demanding or risky programs that are critical to future success. Real implementation requires translating the strategic issues down into the organization and energizing all levels by providing a sense of realism and trust. A cross-functional team may be the essential ingredient to establish genuine commitment and ensure results.
Fourth, The selected leaders: after taking the Leadership Practices Inventory (LPI) test will have the criteria to guide people in tailoring the teams to approach work in the context of your culture, your vision and your strategic issues. "And how they make the perfect fit". How could you define Strategic Thinking, people often ask, "What is Strategic Thinking?" To define what is strategic thinking: Most people would agree that it could be said that is in" Thinking about the Future - - not just random thoughts - - but specific thinking about specific future issues". It means setting aside time, preventing interruptions and just thinking. What is it we want in the future - - and how are we going to get it. Strategic thinking sets the stage for you to take action now in order to impact specific future issues. It encompasses a whole range of topics, from the values and vision to the plan for organizational development. From strategic market positioning to capital planning to leadership succession. From corporate culture to leadership styles. All those are far off things that you can make choices about today so; you can influence what they become tomorrow. For strategic thinking to work well, you first must understand your business purpose. This means understand the things you do well, the products or services derived from them, and the markets for those products and services. This defines your basic business, and sets the stage for strategic thinking - - thinking about how you will go about the business. In short, maintaining focus, thinking long term, sorting out what is important versus what is "noise" and acting accordingly does strategic thinking. As a basic rule companies should try to integrate and make more participative all of its employees in the world of both companies. Because Loctite stands for the same goals as of Henkel's ones. That is what Loctite stands for and at the top management people in the company, they know that their goal is to help people, and business so they can be successful, to manage the entire business operations, manufacturing, logistics and physical distribution of products, the management provides key measurements to ensure control, focusing on areas that requires corrective action, driving cost and quality improvements programs in order to become a real partner to customers. Therefore, in order to accomplish successfully integration between each SBU, either at Henkel or at Loctite the company must established the following set of standard procedures:

a) Establish good channels of communication

b) Project Manager, or Operations Manager (Facilitator)

c) Assign Resources

d) Check for opposition

e) Check for proper responsibility assignments

f) Plus all implementation methods mentioned above

A study done by The Roughly Park Management Institute: In the graph (see attachment VII) did find that the main reason that M&As fails, is due to the Human Resource factor. That is the key element to avoid failures in the process of an M&As. To explain that The Human Resource factor is not being taken into consideration? They argue that the first reaction is the clash of cultures of work provoking uncertainty on workers. M&As intent to consolidate the central business or the perfect fit of both companies, including the Intellectual Capital. They add that to be successful you must keep people informed. Otherwise, it fails.
e.g., case study from The Harvard Business Review:
Asean Brown Boveri (ABB), how did management Leverage Corporate Performance in one of the most successful mergers so far. In 1987, this is one of the largest M&As at the time. The company introduces with his CEO one of the most radical concepts to take their company into the future. They said tomorrow's most successful companies would have to have a strong integration process to link their diverse assets and resources into corporate competencies and leverage these competencies in the pursuit of new opportunities. It is imperative to a company can coexist at the worldwide level there must be an entrepreneurial management at the national local level. Broader the integration process so it can be built and managed. The elements for an Entrepreneurial process must be: Small (aggressive targets), Rigorous Financial Discipline, A structured new product creation process supported by a flexible multistage resource allocation system, and most important "A clear vision" in the definition of their Strategic Mission, in terms of utilizing its technology strengths, in order to develop products with superior functionality. Creating work units of entrepreneurial corporation – each responsible for specific customers groups of product lines or functional competencies creating an enormous force which integrates the company aligning the company with a clear and motivating organizational values and give incentives to develop and to have a the management group have a company Leader at the same time. This company is based on the Principle of Absolute Equality of Human beings, individual initiative and rejection of authoritarism. Free access of information, Flat structures, with small number of Senior People, in which information "All information", is shared horizontally. In today's world information is the only source of competitive advantage.
This is a co. With a total creative revolution, that pulls together teams and task forces from different parts of the co., to find creative responses to emerging problems and find new opportunities. Providing order and efficiency, it must find the knowledge with the organization by:
i) Rationalization and restructuring existing business to achieve operational performance. Components: Focus – Resource – Effectiveness = Continuous Growth
ii) Revitalization by the creation of new competencies and new business, changing the rules of the game. Ideas increases, Business go up, and the Company Growth fast
ABB believes that there is no long-term success without short-term performance results. The mixture is inevitable but rationalization will provide the resources needed for revitalization and revitalization creates the hope and energy to be successful. To inspire self-renewal companies you must create develop an inspiring corporate ambition. A shared dream about the future and the company’s role in that future. This Leader does not worry about the future is going to be, he is building it, and he is building it because the world is changing. The real point in ABB is that the importance is that the Leader must be able to make is vision to indeed to whole organization.
This is one best M&As cases, never the less in Leadership Concepts you must add the philosophical part of it which is to control the four cardinal virtues "Justice, Prudence, Moderation and Strength" and keep a balance among them. In my opinion, you are loyal because your boss is loyal to you and you will do anything for them, because you know that they will do anything for you.

In January of 1997, with Loctite’s with sales in excess of $800 million, and Henkel KGaA, a German company with significant holdings in Loctite, acquired the company in 1.3 billion. Loctite began with a conversation between a father and son and grew into a business that currently generates more than $800 million annually. Today, with 4,200 employees worldwide and operations in more than 80 countries, Loctite manufactures and markets a broad range of high-technology sealant, adhesives and coatings in nearly every country around the world. Computers, automobiles, airplanes, vacuum cleaners, speakers, syringes, cosmetics, and compact disk players are just a small sampling of the items that are made with Loctite products.
The company often develops into complex equipment used for application and assembly as well. Growth through Innovation and Acquisition. Loctite grew rapidly. In 1956, sales totaled $7,000 though net income was at a deficit of $17,000. But by 1964, sales had reached nearly $2 million and net income jumped to $220,000. From 1964 to 1970, sales quadrupled and earnings sextupled. From 1971 to 1975, sales again quadrupled -- to $67 million. On October 26, 1976, Loctite's stock was admitted to listing on the New York Stock Exchange. To fuel its growth, Loctite allocated an increasing amount of money to research and development and to the strategic acquisition of other, related companies, such as Laguna Scientific Industries, Permatex Company and Woodhill Chemical Sales Company. Loctite merged with International Sealant in 1970 and also acquired several of its overseas distributors throughout the 1970s. Bob Krieble, who became as well, liked a leader as his father, led Loctite through acquisitions, reorganizations, a public offering, a merger, and international expansions, before retiring in 1980. From 1980 to 1995, Kenneth Butterworth took the helm, as president and chief executive officer. David Freeman was named president in 1991, added the CEO responsibilities in 1993, and was appointed chairman in 1996. Throughout its history, Loctite has continuously created markets by discovering opportunities where no one knew they existed. From its founding, based on a product that solved an "unsolvable" problem, Loctite has achieved success through innovation. Worldwide simultaneous research, development and engineering (RD&E) are the key elements to Loctite's success. In fact, approximately 25 percent of Loctite's sales for 1996 came from products developed within the last five years. In 1996 alone, Loctite invested $30 million in new product development and dedicated more than 250 employees to working on RD&E projects. It is this kind of commitment that has earned the company's research engineers more than 400 patents and has provided Loctite customers with a constant flow of new products and innovative solutions to the cost-competitive demands of the industry.

Research & Development
Loctite is in the business of solving customers' problems. When a customer buys Loctite, they get more than a product -- they get a partner who will work side-by-side with them to find innovative solutions to their manufacturing problems. From engineering and testing programs to manufacturing products on the factory floor, Loctite brings a world of expertise and experience to its customers. In a design-through-assembly partnership, no one adds value like Loctite. RD&E efforts are located in four Worldwide Centers of Excellence:
Rocky Hill, Connecticut, U.S.A - Munich (Hochbruck), Germany - Yokohama, Japan, Dublin, Ireland
These Centers of Excellence form an engineering nucleus of expertise and test capability that is unsurpassed in the industry. In addition, the company's 30 strategically-located Technical Service Centers offer technical support to manufacturing segments around the globe; and the company's state-of-the-art manufacturing sites guarantee an uninterrupted supply of top-quality products. Loctite manufacturing facilities have earned ISO 9002 Quality System Registration and have won recognition for superior quality systems from numerous companies including:
-General Dynamics, Caterpillar, OSRAM Sylvania, General Motors, Texas Instruments,
- Siemens, Ford, Kelsey Hayes, Motorola, Chrysler, Allied Signal, Borg-Warner.

Organization
Loctite was a global company from the beginning. Distributors were set up in the United Kingdom and throughout Europe in 1956, and products were shipped across the Atlantic Ocean before they crossed the Mississippi River. Today, the company does business in 80 countries in four geographic regions: North America, Europe, Latin America, and Asia. The company is organized not by country but by market channel, which enables Loctite's employees to synergize efforts and expertise worldwide.

These market channels include:
Industrial Automotive - Automotive Maintenance - Electronics Industry - Home Consumer - Industrial Maintenance - Industrial Production - Medical Equipment
Loctite products are "designed-in" at high tech electronics manufacturers. Loctite products keep customer's production lines running. Loctite products provide consumers the performance they demand at the right price.
"The Vision shared in Loctite is the continued development of a company with Global Reach capable of PENETRATING EACH MARKET within that reach, and PRODUCING STEADY PROFIT AND SALES GROWTH over the long term, fueled by a constant flow of new products which provide INNOVATIVE SOLUTIONS for its our customers."
"To secure this vision we will maintain the highest focus on being our customer’s LOWEST COST SUPPLIER, Giving our customer the BEST SERVICE for their current and future needs, Providing a HIGH QUALITY PRODUCT RANGE manufactured to a world standard, Ensuring that we have a RELEVANT ORGANIZATION STRUCTURE staffed by WELL INFORMED and APPROPRIATE TRAINED EMPLOYES, Conducting our business everywhere in the world in an ETHICAL AND SOCIALLY RESPONSIBLE MANNER, Maintaining TECHNOLOGICAL LEADERSHIP, and Ensuring that the BEST ECONOMICS are applied in doing our business".