Due diligence is a phrase that has been traditionally used to reflect the analysis activities that occur during merger and acquisition activities. Recently the due diligence process has been extended to include the evaluation of business affiliation and partnership agreements.
Due Diligence is generally comprised of legal due diligence and financial due diligence. At this time, research into financial assets, articles of incorporation, market share, technology, hardware and business competencies are examined and as a result, there is a need for businesses to engage with Gravis Risk who have vast experience so as to deliver professional due diligence partnerships for businesses making new investments or proposing to merge or buy other companies.
Statistics indicate only 15% to 25% of all mergers and various business combinations live up to expectations. 25% to 30% are reported to be outright failures, with the acquired entity being liquidated at a loss within 3 to 5 years of acquisition. The remaining 45% to 60% result in little or no apparent benefits to the buyer's shareholders to prevent this and similar occurrences, there is need to contact Gravis Risk.
In today's merger activity, we see an alarming trend of companies paying too much for the organisations they are acquiring. Declining equity prices are creating a disconnect between what owners want for their businesses and operating companies will pay.
We help study key cultural and organisation effectiveness domains and they include:
- Leadership: vision. mission. values, business strategy development, leadership effectiveness and ethics.
- Relationships: trust, collaboration, inter/intra group relationship, community and customers.
- Communication: feedback, information sharing, employee trust in information
- Infrastructure: formal procedures, processes, system, policies, structure and teams involvement and
- Finance: perception of financial health and the role of the employee and the level of financial comprehension and impact on the business.
- Cultural Descriptors: a list of predetermined values which can be customised to reflect the organisation's values.
- General Climate: open-ended questions that capture the stories and suggestions from employees.
The outcome of this is a cultural resume. This document shows that results of a cultural diagnostic and lays out the unique organisational culture of each business unit inside the target entity. The Cultural Resume helps stakeholders going forward and creating the measurable action plans for the cultural integration efforts for those going forward.
Some of the tips we use to increase the potentials of our success includes:
- The use of an appreciative inquiry when examining the culture of business units.
- We use a validated assessment tool that collects both quantitative and qualitative data.
- We include culture as a part of your due diligence process and be prepared to addresses the issues between business units with action.
- We involve employees in the integration effort.
- We allocate dedicated time and resources for the project.