Distortions and deceptions in strategic decisions | McKinsey

Distortions and deceptions in strategic decisions | McKinsey:



The chief executive of a large multinational was trying to decide whether to undertake an enormous merger—one that would not only change the direction of his company but also transform its whole industry. 



He had gathered his top team for a final discussion. The most vocal proponent of the deal—the executive in charge of the company's largest division—extolled its purported strategic advantages, perhaps not coincidentally because if it were to go through he would run an even larger division and thereby be able to position himself as the CEO's undisputed successor.

 The CFO, by contrast, argued that the underlying forecasts were highly uncertain and that the merger's strategic rationale wasn't financially convincing. Other members of the top team said very little. Given more time to make the decision and less worry that news of the deal might leak out, the CEO doubtless would have requested additional analysis and opinion. 

Time, however, was tight, and in the end the CEO sided with the division head, a longtime protégé, and proposed the deal to his board, which approved it. The result was a massive destruction of value when the strategic synergies failed to materialize. More



'via Blog this'

Crowe Horwath Jamaica (www.crowehorwath.com.jm) is one of the largest public accounting, consulting, and advisory firms in Jamaica . Crowe uses its deep industry expertise to provide audit services to public and private entities while also helping clients reach their goals with tax, advisory, risk and performance services. Crowe Horwath Jamaica serves clients worldwide as an independent member of Crowe Horwath International, one of the largest global accounting networks in the world. The network consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world.