Organisational culture : the effects of cultural differences during the integration process of mergers and acquisitions

Abstract

The human capital aspect during mergers and acquisitions is the basis of this qualitative research study which is conducted amongst four sets of organisations having gone through a merger or acquisition. The study investigates that if organisational cultural differences are not tackled appropriately before any business takeover, the integration process will encounter several stumbling blocks such as job-role ambiguities and confusion in work practices. The sample was composed of nine employees coming from various strata of the private sector and who had experienced in these past five years either a merger or an acquisition. The sample was captured through semi-structured interviews held at the interviewee' offices. The results effectively indicate that in two acquisitions and one merger there were similar shortages of lack of communication and synergy realisation which prevented a successful integration process. Organisational culture gaps have also been identified. Conversely, the other merger has had a successful integration process attributed to well-planned strategies combined with constant communication with all stakeholders. Overall, this study indicates that due to contemporary business trends, mergers and acquisitions are gaining more popularity with the scope of consolidating resources especially where the line of business is homogenous. However, in order to have the desired return for which the combination is intended, the human capital aspect and the amalgamation of both sets of organisational cultures have to be addressed well- ahead the business takeover and ideally during the due-diligence process. A failure to address such element may result in flaws that slow down and threaten the integration process.