A Brief Note On Mergers And Acquisitions

Over the past decades, mergers and acquisitions (M&As) have become increasingly common as a means for organizations to grow fast and offer an alternative to internal, organic growth (Teerikangas & Very, 2006). Nonetheless, although M&As provide unique opportunities for expansion, their success rates are relatively low and many do not meet expectations. Since financial and strategic aspects fall short in explaining these mediocre outcomes (King et al., 2004), researchers have shown a growing interest on the human factors during post-merger integration (Cartwright & McCarthy, 2005). Indeed, employees’ perceptions of the operation are important in the integration phase (Zaheer et al., 2003), and academics frequently refer to organizational culture

Indeed, Haspeslagh and Jemison (1991) state that value and synergies are created during the integration phase, but when it is possible to create synergies and value it is very likely that value destruction happens during the integration phase as well.

Post-merger integration is the integration required after two separate entities come together to form a new organization (Epstein, 2004). In order to achieve the expected synergies, the merging companies have to integrate effectively, hence the integration phase is responsible for the merger success or failure (Haspeslagh & Jemison, 1991). According to Birkinshaw et al. (2000), the integration challenge is twofold, as it involves the two parallel processes of task integration and sociocultural integration. Task integration is defined as the realization of operational synergies, measured in terms of capability transfer and resource sharing. Sociocultural integration, also referred to as human integration, can be defined as the actions taken to build trust, satisfaction, and a shared identity among employees of both

According to Schein (1985), organizational culture has a minimum of two levels: objective and subjective. Objective aspects include office location, physical setting, office decor, etc., while the subjective level includes shared values and beliefs. Singh (2005) argues that the culture is unique to each organization and is simply reflected in the way things are done. Corporate culture therefore consists of the beliefs and practices, such as values, communication patterns, policies, religion, leadership style, motivation factors, and rituals that are shared my most members and influence their behaviour (Baker, 1980; Singh, 2005; Deal and Kennedy, 1982).

National culture and organizational culture are tightly interrelated, because values, beliefs and norms that are rooted in a country’s culture influence that of an organization originating or located in this country (Lindell and Arvonen, 1996). Lees (2003) even categorizes organizational culture as a subculture of national culture, and argues that in practice, it can be difficult to discern whether cultural differences come from national or organizational