Assessing the decision making dynamics of shareholders during mergers and acquisitions of engineering consulting firms

Abstract

The essence of this study is to capture the dynamics of decision-making. The context of this study is the engineering consultant industry consolidation in South Africa over the last five years. Decision-making is a complex phenomenon and highly influenced. To understand the dynamic nature of decision-making, it is important to understand the rationale or process that was followed to derive to the decision made. This can be simplified or better understood when evaluated at the hand of a context. In South Africa, consolidation activity was relatively high during the last five years when compared to previous years – engineering consulting companies – with international groups teaming up with well-established domestic entities to create new African-focused organisational platforms. The research questions are predominantly “how” and “why” questions and this is best answered through a qualitative research approach. The research design uses a multi-case study design in that participants in this research study are employed by different engineering consultant companies. It does not follow the traditional multi-case design which determines similarities and differences between the cases or similarities and differences in the same case, but rather a view gathered on the same context from different perspectives. The participants are defined as key role players with a responsibility to make strategic, financial and/or commercial decisions in a company and individuals who directly faced decision-making in the context of this study. Data collection is primarily by means of interviews. The key findings indicate that decision-making is highly influenced and that personal disposition is a prominent influencing factor. Another finding was that industry consolidation was a global trend that could no longer be ignored in South Africa and that companies had to strategically respond to a number of key issues that they have been facing. It is clear that decisions are made in context. The continuously changing environment in which the engineering consultant industry operates means that opportunities are never static and that decision making is always dynamic. It is important to have strategic objectives and a list of expected outcomes at the start of a decision making process and to monitor and control progress constantly against these as one advance through a life cycle of events, such as a consolidation transaction. This research study concludes in a sense that the engineering consultant industry is looking forward, some recommendations to the industry and recommendations for further research.