Why does culture matter so much?

This topic contains 4 replies, has 5 voices, and was last updated by  aditi chandra 2 weeks, 3 days ago.

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  • #118244


    Participant

    What have you seen as the biggest negative impact of culture mismatch between target and acquirer?

    #118509

    Steve Schwarze
    Participant

    Until I started working with M&A integration, I did not fully understand the importance of culture in good business. I now completely understand just how important culture is because I have seen a lack of merged culture tear apart a few integration efforts. In the end, everything comes down to the fact that integrations are the joining of groups of people. Whether you are trying to integrate finance functions, HR functions, or any other function, the joining together of people to make this integration is what delivers results. If people do not merge to see that they share a culture and are working together to mutually benefit I that shared culture, they will not work to make it happen.

    #118515

    Sarah
    Participant

    The biggest negative impact of culture mismatch is the loss of key talent or key people. The industry of home health is a people business and the loss of a nurse, a patient, a sales person, or a VP could have serious negative consequences to the business you might have just acquired. People tend to follow the culture and the people they have formed bonds with in the home health industry and because the industry is so saturated, there are a lot of different companies for key talent to go to.

    #118545

    Linda Castle
    Participant

    People will only be happy with a culture that reflects their personal values. Some people thrive in dog-eat-doc culture. Some can’t do it at all. If the buyer culture is burn and churn and the target is high employee retention it will not end well.

    #118549

    aditi chandra
    Participant

    The most important key to successful mergers and Acquisition is the integration of two companies. Two companies can be merged and can operate efficiently if the culture of both companies is similar. The employment benefits, policies, HR, management, diversity, etc should be alike for successful integration. More efforts will go into the integration of the companies and instead of creating synergies, it will be a burden for management. One of the example is in our case study of Air India. In past, so many de-merger have happened because of failed integration of companies and the major reason was cultural barriers. However, if two companies merge and possess different cultures they should operate independently with minimal integration points like Facebook and Instagram.

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