The Culture Factor in M&As
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Organizations today undergo mergers, acquisitions, and joint ventures for many reasons: among them, to acquire technologies, products, and market access, to create economies of scale, or to establish a global presence. However, culture has emerged as one of the dominant factors that prevent effective integrations, and talent consistently ranks as one of the top reasons keeping CEOs awake at night during the annual survey of CEOs at the Davos Economic Forum. Making appropriate, timely decisions and operating effectively becomes extremely difficult when merging companies with different cultures. This, in turn, can undermine the potential value created through the newly integrated company.
The question then is: Why do issues of culture continue to derail the success of M&As despite all of the published research?
I would like to share some thought what could be the reasons:
– A lot of companies have a lack of manager, experts or business unit being responsible for corporate culture – so they are challenged with missing knowledge and responsibility to manage the culture factor of M&As.
– Furthermore I think, a lot of companies are not aware of their own culture because of missing assessments, so they have nothing to compare or align before/after a merger.
– Also, maybe there are no capacities for action after a cultural assessment took place.Happy to discuss!
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