Resumen
AbstractCorporate growth through merger and acquisition is one of the many growth strategies open to the firm. Such a growth strategy can be divided into three stages: formulating the merger/acquisition strategy; screening and evaluating potential candidates; and implementing and integrating the merger/acquisition. In this article, the second in a series of three, the focus is on the second stage. Research findings into the evaluation practices utilized by twenty acquisition intensive South African companies are reported. Broadly speaking, evaluation in the South African context is seen primarily as a team effort, and the domain of top management, assisted by staff personnel where necessary. Taking between one to three months to complete, the evaluation practices of organizations represented display considerable variance. Some adopt a structured approach, and utilize formally developed evaluation checklists, while others rely on an ad hoc, informal approach. While several methods to evaluate managerial competence were suggested, no process to evaluate either managerial compatibility or the culture of potential candidates were discovered. Understanding of the concept of organizational culture was found to be minimal, though the research findings indicate a contingent role for organizational culture in the merger/acquisition process. The article is concluded by making some suggestions which, while not guaranteeing transaction success, should lessen the chance of failure being attributable to inadequate candidate evaluation.