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Business Executive | February 2012 | PAGE 25


Across the Editor’s desk: A brief review of some of the most interesting current management research


Successful mergers


Why do some mergers work better than others? Recent research from INSEAD found that mergers were most successful, and resulted in improved profit margins, when a firm merged with a target that was similar to itself. Key to the research was the ability to measure relatedness of firms accurately. This was to assess whether firms would produce more synergies when merged. They attempted to capture whether there is sufficient complementarity in firms to make their merger or acquisition a success. There need to be enough differences from potential rival firms so that they cannot replicate the benefits of the merger. However, if two firms merge in a field already


crowded by established companies producing similar products, then nothing new may be produced by the merger. But, if the organisation already has competitive products, it may be able to merge with a somewhat distinct firm that allows it to produce new products that are not produced by rival companies. The researchers measure relatedness


between various pairs of firms then classify them into “relatedness clusters”. These variable industry clusters can then capture how organisations are related to each other, and which firms share enough descriptions to be classified as producing in the same industry. It is never possible to predict with certainty that mergers will be successful. Many mergers


do fail. However the gains from success can be substantial. Firms may also lose if they do nothing and do not attempt to introduce new products by the merger route. Contact: www.insead.edu.


Stress is number one cause of


absence For the first time stress is considered the most common cause of long-term sickness absence for both manual and non-manual employees, according to a recent CIPD survey. It also reveals a link between job security and mental health problems. Employers making redundancies report an increase in mental health problems among their staff. Although overall absence levels show little change, the proportion of absence that is stress-related has increased. Nearly four in ten (39%) employers report an increase in stress- related absence, compared to just 12% reporting a decrease. For manual workers, stress is now the top cause of long-term absence, while, among non- manual staff, stress has moved ahead of acute medical conditions. Public sector respondents identify organisational change and restructuring as the number one cause of stress at work. Job insecurity is also reported as a common cause of work-related stress in the public sector. To a large degree, managing stress is about effective leadership and people management, particularly


during periods of major change and uncertainty. The survey recommends that line managers focus on regaining the trust of their employees by openly communicating throughout the change process. This could avoid unnecessary stress and potential absences. They also need to be able to spot the early signs of people being under excessive pressure or having difficulty coping at work, and to provide appropriate support. Many organisations are looking for ways to save money. However, employee health and wellbeing shouldn’t be overlooked. Benefits that engage employees do not have to be expensive. For example, by introducing a recognition scheme, or equipping leaders with the skills they need to care for the wellbeing of their teams, employers can make small, affordable changes that make a positive difference. Contact: press@cipd.co.uk


Sustainability – the “Embracers”


have the advantage How fast are businesses adopting sustainability- driven management? A recent report from MIT Sloan reveals two distinct camps: “embracers”, those who place sustainability high on their agenda, and “cautious adopters”, who have yet to focus on more than energy cost savings, material efficiency and risk mitigation. The study provides a snapshot of the future of management. Seven specific practices of embracer companies


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