3. Why m&a's fail

3.1 Possible reasons of failures in m&a

As stated above, WilmerHale report 2015 shown that M&As are becoming increasingly popular and ever more important for today's economy. According to overview stated in Straub, it is said that M&A failure rates is high (Straub, 2006, p.3). Some sources of errors that cause to the failure are still remain unclear.

The main failure source of M&A's is improper strategic planning (Marks& Mirvis, 2011, p.165). Companies often pay not enough attention toward integration issues and spend not that much time analyzing current and future market trends (Nguyen,p.448). After decades of research on M&A's, there are still no critical success factors found. The proposed critical success factors for M&A are as numerous as the consultants, managers and academics in the field. The authors argue that success rate depends on the factors that may cause significant problems. Four of these factors play vital roles and can be presented as reasons for failures. They are: unrealistic expectations, overconfidence, promoters of external advice, distrust (Kummer, 2007, p.5).

The first one, unrealistic expectations. Expectations is nothing else as beliefs that employees and organizations keep and believe that the will be realized. They are dependent on the environment in which employees operate and interact with other individuals (Garibaldi, p.6). Usually individuals build wrong expectations, due to underestimation of the particular situation, for example integration process. The expectations are influenced by different factors, such as the stage of M&A process and level of its perception by employees ( Kummer, p.6).