Western companies expect to resort to M&A to drive growth - in Asia and LA will be able to grow organically

Europe, North America expect M&A to fuel growth. By Joe Light
WSJ, Dec 21, 2010
http://online.wsj.com/article/SB40001424052748703395904576025791526387806.html

Many North American and European companies expect to resort to mergers and acquisitions to drive growth next year, while companies in Asia and Latin America are more optimistic that they will be able to grow organically, according to a survey by human-resources consulting firm Towers Watson.

The September survey of 743 companies found that 37% of HR executives in North America and 36% in Europe believe that M&A will be one of their three top strategies for driving growth.

That might indicate executives in those markets see few other promising ways to expand their businesses. Such moves "may well be more of a defensive play to consolidate market position or gain sufficient scale to weather continuing tough times than an aggressive expansion strategy," the study said.

By contrast, only 20% of Asian-Pacific companies and 23% of Latin American companies believed M&A would be a key way to drive growth. Instead, companies in those markets said that hiring staffers who deal with customers, such as salespeople, would be among their most important growth drivers. Under the total global tally, 27% of respondents checked off pursuing a merger or acquisition as a top priority for driving growth.

"Executives in emerging economies are far more willing to invest in hiring new salespeople because the growth of those markets assures you that the investment will pay off," said Ravin Jesuthasan, global practice leader for talent management at Towers Watson. Only a quarter of North American executives picked hiring in roles that deal with customers as a top strategy. Nearly 40% of companies said so globally. "India and Asia really think about growth differently than in the U.S. They'd much rather grow capabilities from within than acquire them," said Peter Cappelli, management professor at the University of Pennsylvania's Wharton School and co-author of "The India Way."

http://www.towerswatson.com/assets/pdf/3371/Towers-Watson-Strategies-Growth.pdf