Culture: Its Impact On Successful M&A

A clash of cultures is one factor that contributes to unsuccessful mergers and acquisitions after closing. Often, management tends to be so focused on other aspects of a successful transaction that the integration of culture is overlooked.

What is culture?

Culture refers to a set of values and beliefs that inform the behaviour and attitudes of a workplace. In Professor James Heskett's book, The Culture Cycle: How to Shape the Unseen Force that Transforms Performance, he explains that culture can account for 20-30% of the differential in corporate performance between competitors. Culture can increase the rate of employees that remain in an organization, which decreases the costs of recruitment and training. It can increase employee productivity and morale. In turn, these factors all lead directly to greater customer loyalty, better customer relationships and improved sales.