“Strategic alliances a new reality for Sri Lanka”: Expert tells CA Sri Lanka, IPM CEOs Forum

Monday, 2 June 2014 00:00 - - {{hitsCtrl.values.hits}}

Over the next 20 years, strategic alliances will play a major role across Sri Lanka’s private sector, declared Prof. Vasanthi Srinivasan, Associate Professor in Organisation Behaviour and Human Resource Management while addressing the CEOs Forum organised recently by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and the Institute of Personnel Management (IPM). Prof. Srinivasan who specialises in offering her expertise on strategic alliances across South Asia also said that strategic alliances are going to be a new reality for Sri Lanka. “I can see very clearly a lot of consolidation happening in the banking and insurance industry in Sri Lanka, and I expect this consolidation to spill over in the next 20 years to the private sector in the country,” she told the forum which revolved around the theme ‘A New Beginning Through Strategic Alliances’.

Elaborating on the importance of maintaining the success of such alliances, Prof. Srinivasan emphasised that continuous and consistent executive sponsorship along with cultural compatibility played key roles in the sustenance and success of a strategic alliance. She highlighted that 90% of the time in joint ventures and mergers and acquisitions a lot of effort is put on financial and legal aspects, while less time is spent on organisation structure and organisation culture. “While finance and legal aspects are important, focus should also be given to the organisational structure and organisation culture,” she added. “All successful and effective partnerships are based on structures, processors, systems, norms and values. The same applies for strategic alliances as well,” Prof. Srinivasan noted. She also highlighted on the importance of reviewing the alliance periodically both the alliance purpose and intended outcomes. “Sometimes once the deal is done, the commitment and stamina tends to diminish, so it’s important that this doesn’t happen,” she adviced. Prof. Srinivasan highlighted that the typical reasons for the failuresin acquisitions were unrealistic expectations, failure/inability to unify behind a single macro message, losing or mismanaging talent, along with culture clashes and defensive motivation. She also emphasised that three key dimensions were imperative for the success of an alliance; they were due diligence, integration and communication. “It is important for the CEO to address all employees on the upcoming alliance,” she said highlighting the importance of communication at all stages of the process. “Allay fears proactively. Be frank at all times, painful decisions are inevitable in a merger and acquisition, so be open and transparent, while being willing to acknowledge that some decisions will evolve,” she said. “No one died of over communication,” Prof. Srinivasan added. CA Sri Lanka President Arjuna Herath noted that his institute was always very committed to facilitate corporate growth. “In keeping with this objective, one of the first initiatives we took was to relaunch our syllabus this year which aims to deliver chartered accountants who will add value to business,” he added. Speaking at the event, IPM Vice President Rohitha Amarapala said that the CEO forum held much significance for the history of CA Sri Lanka and IPM as it was the beginning that marks a fruitful partnership between the two prestigious professional bodies. The CEOs Forum concluded with a panel discussion comprising The Neilsen Company Lanka Managing Director Shaheen Carder, IPM Past President Janaka Kumarasinghe, National Development Bank Chairman Sunil G. Wijesinha, Prof. Srinivasan and Arjuna Herath. The session was moderated by Daily FT Editor Nisthar Cassim.