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How important is culture in a merger?

On Behalf of | May 18, 2020 | Mergers & Acquisitions |

If your company is in conversations with another company about potentially joining forces, you know that there are many things to be evaluated before a final decision to move forward can or should be made. From sales models to market opportunities to pricing and more, both parties will need to evaluate the viability and benefit of merging operations. One element that some companies may overlook but that is essential to their success is the culture of both companies.

Tight cultures and decision making

As explained by the Harvard Business Reviews, some companies operate in a very process-driven manner. These businesses tend to have extremely strong leadership at the top and provide little to no room for questioning decisions or protocol at lower levels. Workers may, in essence, be expected to follow directions and adhere to guidelines rather than make their own decisions about how to conduct their work.

Loose cultures and empowerment

Some companies tend to favor providing their employees an overall framework with a vision and a goal that allows individuals some level of freedom to choose how they achieve those goals. Employees are encouraged to adopt a collaborative approach to their work and utilize their discretion when making decisions.

Marrying tight and loose cultures

When bringing these two cultures together, companies may want to evaluate where each approach could benefit their newly merged company. Instead of forcing one company to adopt the other’s culture, blending styles may provide better results.

This information is not intended to provide legal advice but is instead meant to give business owners and leaders an overview of the importance of company culture in the success or failure of a business merger so they may appropriately factor this into their plans.


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