Upping the Likelihood of Merger & Acquisition Success Through Intercultural Synergy

Abstract

The intense concentration process taking place in the financial system across the world has attracted substantial attention from stakeholders and academicians. The impact of M&A on value creation and efficiency/effectiveness improvements of companies involved appears to be on the whole, disappointing and hard to create value for customers. The reason seems to lie in the difficulty of governing a post-merger integration process. Post merger integration generally requires good governance, management practices, significant experience, and attention to cultural profiles and individuals’ behavior. More in detail, management literature recognizes the importance of corporate culture to be considered as the set of values and decisions that drive individuals’ behaviors within organization for explaining alliance’s success in M&A operations. In fact cultural clashes could determine conflicts and negative effects on the timing and the effectiveness of the post-merger integration processes. Also it can help solve problems relating to motivation and turnover of employees. Corporate culture is measured using an ethnographic approach focusing on language as its special artifact. The assessment is based on the definition of some key concepts that are relevant for the industry such as competencies, competition, customer, disclosure, human resources, innovation and risk.

This article shows the relationship between the organization culture and Mergers and Acquisitions, it emphasizes on the effect of inter-cultural synergy of organizations post merger. This article is discussing how the inter-cultural synergy can be incorporated in the organization to achieve success through Mergers & Acquisitions.

Keywords: Inter-Cultural Synergy, Mergers & Acquisitions, Organisational Culture, Cultural Due Deligince