M&A Culture Assessment | Due Diligence

Listed below are a number of cultural dimensions and indices that are organized across a continuum.

Step 1: Review each cultural characteristic and place an A in the column that most closely represents your perception of the Acquirer’s culture.
Step 2: Place B in the column that most closely represents the Acquired Company’s current culture.
Step 3: Calculate the absolute difference between each rating to determine the largest culture gaps.

Cultural Characteristics	1	2	3	4	5
Strategic Orientation
Customer/Market Driven						Technology Driven
Long-term profit orientation						Short-term profit orientation
Employees understand and committed to strategy						Employees don’t understand and/or are not committed to strategy
Activity focused						Results focused
Strategically focused						Operationally or crisis focused
Fast follower regarding product instruction						Bleeding edge products
Slow to respond to market dynamics						Flexible, highly market responsive
Communication
Top down focus						Three-way
Infrequent sensing						Frequent sensing
Filtered						Filtered Open/candid
Training and Development
Considerable opportunity for employee development						Limited opportunity for employee development
Development is based on informal mechanisms with wide degrees of latitude						Development tightly aligned with competency model or career ladder
Development focus on current job						Development focuses on current and future jobs
Rewards
Focus on rewarding individual performance						Good balance of individual and team performance rewards
Employees have minimum involvement in setting performance expectations						Employees have significant involvement in setting performance specifications
Seniority based						Performance based
Performance standards are clear						Performance standards are ambiguous
Compensation at/above market						Compensation below market
Employees receive regular performance feedback						Employees don’t receive regular performance feedback
Decision Making
Slow						Fast
Centralized decision making/multiple approval levels						Few approval levels and broad spans of control
Analytical/cautious						Intuitive/daring
Authority levels are clearly understood						Confusion exists regarding authority levels
Risk Taking
Risk averse						Calculated risk taking encouraged
Mistakes are punished						Innovation rewarded
Management does not solicit or act on employee ideas for improvement						Management encourages and quickly acts on employee ideas for improvement
Planning
Short term						Long term
Reactive						Proactive
Informal						Formal
Intuitive about competition						Constantly monitor competition
Teamwork
Low cooperation across departments						High cooperation across departments
Low trust						High trust
Silo perspective						Process/cross functional perspective
Conflict is surfaced and resolved						Culture is polite and conflict is avoided
Management Practices
Leaders are hard drivers						Leaders are paternalistic
Policies applied uniformly						Policies applied arbitrarily
High levels of feedback and coaching						Infrequent or no feedback and coaching
Few unnecessary procedures, policies, and business rules						Procedures, policies, and business rules used to guide employee behavior
Cost and control driven						Service and quality driven
People feel appreciated and valued						People don’t feel appreciated and valued
Low stress/burnout environment						High workload/long work hours environment
Workforce embraces change						Workforce strives to maintain status quo
Structure
Roles clearly understood						Considerable role ambiguity
Organization is flat						Organization has many layers
Technology
Employees have access to the information they need to be successful						Information is either lacking, untimely, or incorrect
Technology is not state of the art						Technology is state of the art