Understanding Mergers, Marriages & Mishaps

Ok, all those happy bachelors who are in no hurry to get on this side, unhappy bachelors who are desperate to get on the other side, unhappily married men who want do a RCA (root cause analysis) of their miserable state and the rapidly vanishing breed of happily married men who are curious to understand why they have been chosen to stay happy; here are some of the answers.

It’s probably no coincidence that the Tata Group which has been, of late, on a merger spree has a bachelor chairman. Sure that was tongue-in-cheek, but it’s more than likely that corporate mergers and social mergers have a lot in common and by extension failed mergers and broken marriages are alike in more ways than one. Let me add a couple of disclaimers here. Firstly this post is a male point of view (isn’t that obvious?), hence it’s not meant to be construed as anti-feminist. Secondly, this post is a positive statement, not a normative one (for the uninitiated, ‘the way the world is rather than the way it should be’)

Let’s look at the Indian scenario first. For centuries men in India married purely for the purpose of outsourcing some of their functions such as household work, rearing children etc. and it was believed for long that men had a comparative advantage in terms of earning livelihood. Now this model worked for a variety of reasons; there was tremendous social pressure that kept it that way, both partners did not compete for the same resources (there was an implicit non-compete agreement), so it became in some sense, an evolutionarily stable strategy. Things changed, of course primarily because of increasing complexity in the environment and the institution of marriage as it exists now in India is akin to the Jurassic Park , which could collapse (or mutate) because it is, in the words of Ian Malcolm, the chaos theorist, ‘ an unsustainably simple system forced bluntly upon an incredibly complex system.’ In corporate terms the relationship was more on client-vendor terms, clearly putting man in a stronger negotiating position. Now of course vendors have upgraded and evolved, thereby changing the balance of power significantly. Now you have co-sourcing and partnership models which again mirror the changes in the social world, vendors (and wives) increasingly participate in strategic decision- making.

Let’s look at mergers (and therefore marriages) from another perspective- one of the most (mis)used terms in MBA lingo- synergy. I wont dwell at length on the corporate ones except to say that shareholder viewpoint is often marginalized before empire building and agency issues and the often-quoted reason of ‘diversification’ for mergers is often a dumb one since the shareholders can themselves diversify at much lower transaction costs. Let’s look at the more interesting parallel in the social world. We have heard this before; for example marry a partner who’s from a different industry, so as a unit, your risk is diversified. Sure your risk is halved, but so are your rewards. But there are better ways to diversify your risk; all you have to do (after considering other things) is to invest in a sector which has no correlation with the sector you are working in. Child rearing is an issue, I agree, but there is already an increasing trend towards a single-parent model. I am not sure if there is enough empirical evidence to suggest that children reared in single parent homes are worse off than the rest of us. Assume that on an average partners fought 1/3 of the time, were very happy 1/3 of the time and did nothing for the rest of the time, I am reasonably certain that the expected impact on the child, on average is same as living in a single parent home where there was no upside, sure, but there was no downside either. Sure, my thought experiment made some assumptions, but I don’t think I am way off the mark.

So do I see an equivalent for the on-demand (pun intended) model emerging in the social world? Sounds attractive conceptually, but then, who knows? I’m no Alvin Toffler.