Culture Matchmaking in Mergers and Acquisitions: Case Business Technology Company

Companies are striving to achieve growth in markets through merger and acquisition activities. This growth initiative, merger and acquisition activity, is a change. As a process, the merger and acquisition start from the strategic analysis and searching phase and end up in the integration phase. Organizational culture has been identified as an important element of the organizational change. In a combined entity, the organizational culture (“how things get done around here”) plays a major role. The impact of corporate culture on the success or failure of a merger or acquisition is very important. When companies combine forces, they do not only integrate buildings, technologies, and markets, but also people, structures and cultures. The culture sets common factors, beliefs, values, norms, language, systems, symbols, habits, unwritten rules and shared assumptions for a group. Many mergers and acquisitions end in a failure due to the issues of the organizational culture. The executives see the importance of culture due diligence process, but they don´t know how to do it. The goal of the study is to develop a concept for culture due diligence in order to pre-analyze the target company´s culture aspects and compare those to acquiring company culture aspects. Through this fit analysis the company can perceive if it is fit or not. The concept analyzes meaningful factors, points of synergy and culture differences. Furthermore, with help of this concept the company can ensure expectations, define the target culture and get key points for the integration phase. At the end the business performance, and therefore success in mergers and acquisitions, is linked strongly to people. The concept of culture due diligence takes the culture, culture fit comparison and people perspective into account. Finally, this concept of culture due diligence should help decision making in mergers and acquisitions. It is meant for executives, in business and human resources