"The managerial impact of Post-Merger Integration: the Fiat-Chrysler case"

Abstract

The economic and financial crisis that broke out in the United States in 2008 and all over the World in the immediate subsequent periods, has deeply affected the sense of making business, reverting theories considered as pillars of the business administration up to that time. The Merger and Acquisition practices are increasing year by year since the financial crisis, both in the overall number of transactions and, above the rest, the value “moved” during each of these operations. It seems like that the companies have started to prefer the shared and joint effort rather than the individualistic one: businesses have developed a sort of veiled risk adversity toward the instability of the market and global economy, preferring then to share the results with partners willing to share the risk as well. The union of forces is strengthening the power of the economic actors in the market, while reducing their number: less and less actors are showing themselves able to resist to nowadays market rules, but the lower the number of competitors, the higher is the percentage of market share held in their hands. The purpose of this paperwork is to analyze the reality of the Merger and Acquisition (M&A) practices under a twofold light: theoretically and practically. It is fundamental understand the rationale behind an M&A process, to have a general illustration of which are the basic notions and concepts of the reasons why companies put strengths together to compete in the market. It is necessary to understand how an M&A develops and which is the process that managers need to carefully program. Carry on and administer to create the basic conditions for the success of the future unification. The scope of this paper is to investigate posing the most of the attention on the core moment of an M&A process, the Post-Merger Integration (PMI) that is the fundamental point since which all the merger process can end with a success or with a failure. The PMI phase needs to be handled carefully by those in charge to finalize the M&A, because especially if we are talking about an international operation, the risk is to underestimate the differences between the organizations and cultures involved in the unification process, as well as to make mistakes in the administration of timings and the involvement of the right actors in the right place. A good “integrator” is required to observe and consider the degree to which integrate the two companies and evaluate whether totally absorb one into the other or let the two coexist at the same time, to preserve the diversity of businesses and then exploit it as a source of competitive advantage. The other side of the medal for this analysis has a more “practical” nature and will be centered on the study of a real case of M&A that has been carried out in the last year: the Merger between Fiat S.p.a. and Chrysler LLC, which gave birth to Fiat Chrysler Automobiles N.V. . The FCA Merger represents an emblematic point in the evolution of the automotive sector and particularly interesting it is to observe how this unification process has been different (in both the nature and conditions of development) from the previous partnerships that Fiat and Chrysler have tried to set up with General Motors and Daimler, respectively. One of the points of biggest interest in this paper is the study concerning the evolution of the managerial team of FCA, trying to understand the overall structure and isolate the provenience of each Officer to identify whether there is or not a balance in the number of managers coming from the former two organizations.