The Merger Plan Simulation
Areas: Strategy and Management
Authors: Maurizio Zollo, Associate Professor of Strategy & Management and Alastair Giffin, Co-founder of Prendo Ltd
Minimum time required: 3 to 4 hours
The Merger Plan Simulation (© Prendo 1999) is the first business simulation designed to develop participants' skills in addressing the challenges and trade-offs typically found in post-acquisition integration planning contexts and other major change management situations, including the consensus building process with a plurality of internal and external stakeholders. It can be run over a half-day (including intro and de-brief), with between 6 and 60 participants.
The context is as follows: Northern Bank is a small commercial bank that has just announced the acquisition of Southern Bank. Participant teams play the role of Northern's Integration Manager. A formal integration plan (with decisions on branch closures, systems conversion, product alignment, layoffs, etc.) is to be developed by the time the transaction is expected to clear regulatory and shareholders' approval (in about 2 months' time), and needs as much support as possible from a number of stakeholders at the two banks and some external organisations.
To successfully accomplish their mission, participants need to identify the determinants of each stakeholder's opinion of the project, and use the available actions (modifications to the plan and a broad range of communication possibilities) to find a tradeoff between the maximization of theoretical value generation and of stakeholder support.
The Merger Plan Simulation was designed and authored by Prendo Ltd, in collaboration with Maurizio Zollo, Associate Professor of Strategy and Management at INSEAD, on the basis of Professor Zollo's dissertation work. Prendo was founded by Alastair Giffin, INSEAD MBA 1992 and former Research Associate at CALT.
The simulation has already been run at INSEAD in the SIMA (Strategic Issues in Mergers and Acquisitions) programme, and in Maurizio's MBA elective on M&A, as well as in a number of other business schools (MIT, LBS, Cranfield and Ashridge), and consulting firms (KPMG, Cap Gemini Ernst & Young, PA Consulting).