When Cultures Collide: The Anatomy of a Merger

Abstract

An extended case study of a recent merger between two mutual savings banks is studied from the perspective of organizational culture. Data on organizational culture and organizational climate are analyzed from pre- and post-merger interviews, observations, archival information, and survey questionnaires. Results suggest that even within the same industry, there are major difficulties in trying to merge two different though viable organizational cultures.

Cultural Conflict and Merger Failure: An Experimental Approach

“…One possible source of merger failure is exactly this type of conflict (Buono et al 1985). The first piece of evidence that this occurred in our experiments is anecdotal.…”

Do synergies exist in related acquisitions? A meta-analysis of acquisition studies

“…However, other authors find a negative effect in cultural relatedness (Buono et al 1985;Chatterjee et al 1992). They explain this finding by the knowledge advancing effect of diversity.…”

“…The M&A-literature discusses the impact of four major kinds of relatedness on acquisition success: business relatedness (Kusewitt 1985;Rumelt 1974), size relatedness (Hagedoorn and Duysters 2002;Hitt et al 1991), cultural relatedness (Buono et al 1985;Chatterjee et al 1992), and technological relatedness (Cassiman et al 2005;Hagedoorn and Duysters 2002).…”

“…When the 'way the work is done' is similar, misinterpretations of motives and intentions as well as interpersonal conflicts are reduced (Bruton et al 1994). Cultural distance should be avoided (Larsson and Lubatkin 2001) because the target's culture tends to be changed according to the acquirer's cultural preferences (Chatterjee 1986) with dysfunctional consequences for the integration process (Buono et al 1985).…”

Deculturation

“…In the 1980s, focus was placed on mergers and acquisitions (M&A) as a type of opportunity for members of an organization to come into contact with a new culture, and the "organizational culture fit" in M&A came to be regarded as an issue (Buono, Bowditch, & Lewis, 1985). Later, attempts were made to analyze the propriety of M&A 1 A broadly accepted definition of "acculturation" is as follows: "those phenomena which result when groups of individuals having different cultures come into continuous first-hand contact, with subsequent changes in the original culture patterns of either or both groups" (Redfield, Linton, & Herskovits, 1936).…”