Question

Strategists claim that differences in company cultures may be a challenge when considering mergers or acquisitions. Some even claim that culture clashes may destroy their value-creating potential during mergers and acquisitions. Do you have examples to share that explain if this is true or not? Also, defend your examples along with your position.

Answer 1

During mergers and acquisitions , the cultures of the companies would definately become a challenge to be considered because when there are differences in company cultures , it would be difficult to make the employees of both the companies to adapt to the new culture. If not taken proper precautions these differences might even destroy the value creating potential. For example a global company decided to acquire a local company of a country. When this happens , the staff of the local company finds it very difficult to adjust in the global environment where there would be diverse cultures . This will impact the main agenda of the global company to acquire the company and the potential might not create any value. Hence without proper planning and assessment companies with different cultures might not give the desired results as the differences in their cultures would impact the way employees adapt to new situations.