Cultural Due Diligence as a Success Factor for Post-merger Integration

M&A transactions have cyclically yet continuously increased in number and value over the past decades, but most of them seems to fail to meet expectations during the post-merger integration, resulting in significant (value) loss for different stakeholders. Various success determinants have been identified, including i.a. integration strategy, implementation speed, and integration team. However, the evidentially important soft factor ‘organizational culture’ remains, both, under-researched and underestimated. Therefore, this work analyzed this nexus through a combination of literature review and real-life case study. The research question having been whether a divergence in organizational culture could be considered a key impeding factor the respective post-acquisition integration. An employee survey, partly based on the Denison Model of Organizational Culture, measured the two entities’ cultures, and found significant differences in strength and balance of culture. Based on this and other findings, the research question could be answered with a clear yes. Whether the cultural misfit is the most relevant obstacle in the integration, however, could not be scientifically proven. Nevertheless, this work provides concrete recommendations on how this company may overcome the cultural differences in the ongoing integration.