How to Blend Company Cultures in a Merger Considering an acquisition? Learn to minimize a potential blow to employees and maximize the value of existing talent.
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Q: I'm considering acquiring a competitor. What do I need to know about merging two cultures?
A: We bow to you for thinking about this issue ahead of time. Approximately 65 percent of mergers and acquisitions fail. "The No. 1 reason is a poorly planned and managed integration," says Alan J. Smith, CEO of San Francisco-based Bay Pacific Group, an M&A consulting firm. "Executives underestimate the challenge involved in successfully blending corporate cultures."
Don't believe it? Look what happened when behemoths Daimler-Benz and Chrysler tried to get together. It was called a "merger of equals," but one company always dominates, Smith says.
"In this case it was Daimler who openly imposed its culture on Chrysler," he says. "The failure in properly handling the cultural issues was considered the main reason for the failure."