Does planning pay? The effect of planning on success of acquisitions in American firms

Abstract This study, performed at Carnegie-Mellon University, under a grant from the McKinsey Foundation, offers to the best of our knowledge, the first quantitative and statistically significant proof that acquisition planning pays. Although subjective evaluation of results by management does not differ greatly between planners and non-planners, objective financial measurements show a substantial difference. On virtually all relevant financial criteria, the planners in the sample significaftly out performed the non-planners. Not only did the planners do better on the average they performed more predictably than non-planners, thus planners appear to have narrowed the uncertainty in the outcomes of acquisition behaviour.