Merging Cultures in Organizations

Frequently Asked Questions


Should you try to build one common culture during an integration?

No. A few shared values...a couple of operating principles common to all parts of the new merged organization...a small handful of company-wide standards. That’s okay. That makes sense. That much you can get across to everybody and try to uphold or enforce during an integration. Beyond that, you should manage the merger toward corporate culture diversity. Toward peaceful coexistence of the many tribes—different people, working in different ways, converging on common goals...not conforming to a pervasive corporate culture. That’s reality-based management. You can actually pull that off successfully. And that cultural mix positions you best to beat the pants off the competition.

From Mergers: Growth in the Fast Lane.


Are cultural differences the #1 reason mergers fail?

Probably not. In the same way irreconcilable differences do not fully explain why marriages fail, cultural differences do not fully explain why acquisitions  fail. Mergers disappoint for all sorts of reasons such as bad due diligence, poor strategy, weak planning and implementation, overpayment, etc. It is usually a confluence of mistakes, not any single one, that taken together wreck a merger. 

From What is the #1 Cause of Merger Failure?


Do most acquirers perform formal cultural assessments on target companies?

No. In fact, only a mere 4% of the executives surveyed in a PRITCHETT study indicated their organizations include culture-specific questions in their due diligence checklists. Similarly, only 5% of the respondents say they conduct a “culture gap analysis” or compatibility study using a structured survey form to determine cultural fit. There seems to be a lot more talk than action on the culture front. Executives pay lip service to the importance of culture in mergers, but they routinely fail to back it up with dollars. Culture is the pauper when integration budgets are allocated. Due diligence should scrutinize cultural aspects of the deal with the same discipline given to financial and legal issues.  

From Corporate Culture: The X Factor in Merger Success and Failure.


What questions should you ask when performing a cultural assessment of the acquired company?

  1. How do people feel here about being merged/acquired?
  2. What would be your (or others’) major concerns about being acquired or merged?
  3. What are the defining characteristics of your company? (What’s distinctive? What differentiates you from other organizations in general? From the competition?)
  4. Describe the company’s core values. (What does it believe in?)
  5. What do outsiders not know/realize about this company?
  6. What are its idiosyncrasies? (What are the most peculiar
  7. What are the unwritten rules around here?
  8. What aspects of the culture are most important to people here?
  9. Where in the organization do the dominant subcultures exist?
  10. What are the company’s negative or undesirable cultural attributes? (What aspects of the culture need to change?)
  11. What are the cultural strengths? (What aspects of the culture should be protected/ sustained?)
  12. Is the company getting stronger, weaker, or just holding steady? What trend lines do you see? (What do you feel?)
  13. What do you see as being key to the future success of this company?
  14. How does the organization need to change?
  15. Considering the culture of the acquirer/merger partner, what do you see as the most salient differences? (Where would the friction or flash points be?)

From Operating Style Analysis Part 1.