How to Understand “Culture Incompatibility” In Mergers and Acquisitions


Many experts say that one of the most important reasons why mergers and acquisitions that were expected to be a huge success eventually fail is culture incompatibility, that is, the impossibility to harmonize the cultures of the two corporation that join forces.

Noted M&A business advisors explain that corporate cultures are complex concepts that influence every single aspect of how a company works, from the attitude and the behavior of every single employee, of teams to aspects of how clients and customers relate to the company. The differences in the cultures of the participant companies usually do not consist of differences at the level of core values, they manifest at the level of day to day life in the company. If those very practical aspects are neglected at the management level, they can easily lead to daily frictions among the members of the newly set-up teams and that can further aggravate, leading to employees at all levels leaving the company.

The solution to the problem of culture incompatibility is not easy and it requires a strategic approach at all levels of the organization. The areas of friction and conflict need to be identified, followed by addressing the issues through transparency. The results will not be immediate – adjustment, as in many other areas, takes time in business.

Comments are closed.