Why is there a need for cultural integration?
December 20, 2006 3:12am CST
What does cultural integration mean? I need to answer this sociology question... in more than 50 words...
20 Dec 06
Numerous studies of 30+ years of M&A activity clearly document 55% to 77% of completed M&A's fail to meet the strategic and fiscal objectives that initially justified the acquisition. Roughly half of mergers undertaken today result in later divestiture or close down. Further studies indicate over half of these failures are due to culture clash within the merged organization. When the buyer is a public corporation fiduciary responsibilities of key executives and Boards require a thorough investigation of known potential problems when making acquisitions. In private company acquisitions basic business logic requires it. Most existing models of corporate culture provide no help in analyzing and resolving culture clash failure problems. Most models presuppose some given number of attributes that are described as typical of all organizational culture, and then measure those attributes with a pre-designed survey. This paper presents a functional model of culture which describes, in each companies own terms, how the culture plays out in daily work without any presumed set of attributes. This approach, unlike others, provides valuable information as to the nature of the cultures at play in any merger and be utilized to speed up the integration and minimize, if not eliminate, culture clash problems.
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