Siva Prasath B
To be fair, I think that corporations are getting better at cultural due diligence (CDD) lately, though there is a long way to go. Following reasons come to my mind:
1. CDD is the most difficult of all the different due diligences. It takes an enormous amount of effort if one has to do justice and be confident about the outcome.
2. Since it is a relatively new field, the available frameworks have several limitations. Most of them do not provide objective scores or black & white answers.
3. Merging organizations are over-optimistic about the commonality in their cultures. For instance, every organization thinks they are customer focused, and that they are not bureaucratic. If one doesn’t get into the details, both in terms of the dimensions of culture and the depth in each of those dimensions, the cultures look more alike than they actually are.
4. If an acquirer finds the target suitable in all other parameters, they go ahead thinking that cultural issues can be “managed”. But they grossly underestimate the intensity of those conflicts as well as the need for timely interventions to manage such conflicts.