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Culture in the
The role of culture in the merger M&A process
and acquisition process
Evidence from the European
chemical industry 1405
George Lodorfos and Agyenim Boateng Received May 2006
Leeds Business School, Leeds Metropolitan University, Leeds, UK Revised September 2006
Accepted September 2006

Abstract
Purpose – The cultural element in M&As’ integration process has been identified as one of the key
issues that may help explain the failure of many mergers and acquisitions. Yet what needs to be done
to improve cultural integration in order to enhance M&As’ success has received relatively little
attention. This study attempts to examine the role played by culture and provide a framework for
enhancing the success of mergers and acquisitions.
Design/methodology/approach – This study is based on 32 interviews with senior managers of 16
merger and acquisition deals in the chemical industry.
Findings – The study finds that culture differences between the merging firms are a key element
affecting effectiveness of the integration process and consequently the success of M&As. Furthermore,
the study finds that, although managers agree that cultural differences create organisational
challenges, yet the attention given to cultural integration issues during M&As are at best tenuous and
in some cases reactive. This study, therefore, suggest a four staged approach in dealing with cultural
differences.
Practical implications – The managerial implication of this finding is that cultural fit constitutes a
key factor in M&As’ success and should be given the necessary attention at all stages of M&As. The
tentative conclusion to be drawn here is that good pre-merger planning with culture placed at the heart
of integration strategies and implementation and the creation of a positive atmosphere for the change
– before initiating any actual consolidation of human and physical assets – are likely to contribute to
acquisition success and value creation.
Originality/value – This article provides a framework for managing culture in mergers and
acquisitions.
Keywords Acquisitions and mergers, Culture, Chemical industries
Paper type Research paper

Introduction
Over the past two decades mergers have become a global phenomenon and a
popular strategic choice for companies’ growth and expansion (Seth et al., 2000;
Buckley and Ghauri, 2002; Shimizu et al., 2004). The Economist (1999) reported that
companies are joining together as never before. A number of scholars argue that
mergers and acquisitions of companies are a common and important response to
globalisation and the changing market environment (Weber, 1996; Ashkenas et al., Management Decision
Vol. 44 No. 10, 2006
1998; Boateng and Bjørtuft, 2003). Despite the increasing popularity of mergers and pp. 1405-1421
acquisitions, it has been reported that, more than two-thirds of large merger deals q Emerald Group Publishing Limited
0025-1747
fail to create value for shareholders in the medium term (Ravenscraft and Scherer, DOI 10.1108/00251740610715722
MD 1989). Ravenscraft and Scherer (1989) found that the profitability of target
44,10 companies, on average declines after an acquisition. The propensity for mergers and
acquisitions’ (M&A) failure to meet the anticipated goals is corroborated by
Erez-Rein et al. (2004) and Carleton (1997) who noted that the rate of mergers and
acquisitions failure range from 55 to 70 percent.
While a number of studies are quick to point out that, lack of strategic fit and poor
1406 management of the integrative process appear to be the main causes of unsatisfactory
performance, it is pertinent to point out that this explanation appears too general and
fails to capture fully what constitutes poor management. For example, Chatterjee et al.
(1992) suggested that there is no clear evidence rendering support for the value of
strategic fit in M&As.
Prior literature indicates that there has been intense interest in examining human
and cultural aspects of M&As as traditional explanations have not adequately
explained the high rate of failures of M&As. Researchers such as Fralicx and Bolster
(1997), Cartwright and Cooper (1993), Daniel and Metcalf (2001), and Evans and
Mendenhall (2004) support this line of reasoning and suggest that incompatible
cultures are the main causes of M&As failure. While it is acknowledged that lack of
cultural fit is an important factor in M&As’ failure relatively few studies have
investigated the role of culture and its integration in M&As process. Moreover, studies
on the impact of cultural differences on M&As’ performance have yielded mixed
results and do not provide framework for managing cultural integration (see, Weber
et al., 1996; Stahl et al., 2004; Brock, 2005).
The purpose of this paper, therefore, is to extend prior studies on the role of culture
in M&As process by using multiple cases of 16 M&A deals which took place in eight
European countries between 1999-2004 in the chemical industry. This study is
significant in that, focusing on the last decade, the chemical industry has witnessed a
substantial number of mergers and acquisitions and an increase in vertical and
horizontal integration. For example, in the year 2004, 400 merger and acquisition deals
worth about $19 billion were reported in the Chemical Industry (Frost, 2004). It is
therefore imperative that M&A activities in this very important sector are given the
deserved attention in management research. In term of goals, this paper has two:
(1) To examine the role of culture in M&As integration process.
(2) To propose a framework for managing the cultural integration process.

The rest of the paper is organised as follows. The next section reviews literatures on
M&As and organisational culture. Following that is the methodology for the study and
the characteristics of the sample reported. The fourth section presents the results and
discussion. A summary and conclusion are in the last section.

Literature review
Traditionally, exploiting economies of scope and scale or taking advantage of market
imperfections has been a dominant way of gaining competitive advantage by firms
(Hansen and Nohria, 2004). But as economies are becoming more and more integrated
due to the forces of globalisation, there is an increasing realisation that these ways of
competition offer limited profitability for firms. As a result, mergers and acquisitions
have become increasingly popular as companies look for higher returns and dominant Culture in the
market position in the global market. M&As provide a means to acquire expertise, M&A process
technology, products, complement ongoing internal product development, reduce
exposure to risk and achieve economies of scope and scale. However, it is well
documented in finance and management literature that a high number of M&As fail to
create value. Systematic research evidence indicates that the greatest danger comes
after two companies tie the knot and attempt to integrate operations. Scholars suggest 1407
incompatible culture as one of the main reasons for M&As failure. Fralicx and Bolster
(1997, p. 50) pointed out that “culture can be a make or break factor in the merger
equation”. Supporting this line of thinking, Cartwright and Cooper (1993) suggested
that financial benefits anticipated from mergers and acquisitions are often unrealised
because of incompatible cultures. Weber (1996) reinforced this by suggesting that the
magnitude of cultural differences can effectively impede a successful integration
during mergers and acquisitions, resulting in poor overall performance. Although, it is
widely acknowledged that cultural compatibility or fit alone is no guarantee to merger
and acquisitions’ success, but it is also true to say that cultural heterogeneity creates
tensions and affects financial and managerial performance (Kanter and Corn, 1994;
Jamison and Sitkin, 1986; Brock et al., 2000). Moreover, managers prefer cultural
homogeneity to heterogeneity, because shared experience and culture form a basis of
trust. According to Cartwright and Cooper (1993) culture is an integral part of an
organisation and that “culture is to an organisation what personality is to an
individual.” Cultural similarity therefore serves as a force that brings members of the
merging organisations together creating a sense of cohesion and consequently
achieving synergy. Therefore, culture barriers and/or incompatibilities can pose major
obstacles to the anticipated gains from M&A (Nahavandi and Malekzadeh, 1988; Very
and Schweiger, 2001). For example, Buckley and Casson (1996), and Parkhe (1991)
suggest that cultural differences can impair information flow, obstruct knowledge
transfer and negatively influence firms’ survival.
Culture refers to a shared and deeply held set of values and norms. Culture has a
historical basis and through a process of socialisation, members within an organisation
learn how to act accordingly (Schweber and LeVine, 1984; Schein, 1985; Erez-Rein et al.,
2004). The definition proffered by Hofstede (1991, p. 5) sees culture “as the collective
programming of the mind which distinguishes the members of one group of people
from another”. Culture represents an important element of mergers and acquisition
process and its full strength is seen during an acquisition when two divergent cultures
are forced to become one. Combining different types of cultures, as mostly happens in
M&As, is likely to have important consequences for organizational outcomes. It is
therefore not surprising that a number of studies such as Bijlsma-Frankema (2001),
Faulker et al. (2002), and Krishnan et al. (2004) suggest, that M&As fail primarily
because managers tend to underestimate the people factor and cultural fit. The
integration of two organisations cultures represents a major post-acquisition challenge
to acquiring firms. This challenge has been discussed in terms of such theories as
person organization fit (O’Reilly et al., 1991), social-anthropology (Nahavandi and
Malekzadeh, 1988; Cartwright and Cooper, 1992, 1993a, b), relational demography
(Jackson et al., 1991), the attraction-selection-attrition paradigm (Schneider, 1987),
MD social movements (David, 1977), and relative standing (Hambrick and Cannella, 1993).
44,10 These theories present somewhat similar explanations as to why people at the acquired
firm often face considerable pressure to conform to the values and management
practices of the acquirer, why these pressures to conform tend to be resisted, and what
consequences result from that resistance (Schweiger and Weber, 1989; Haspeslagh and
Jamison, 1991).
1408 Human resources tend to react negatively to being acquired. However, the strength
duration and dysfunctional effects of such reaction vary between different M&As
(Larsson et al., 2002). This negative employee reaction in M&As is often referred to as a
“cultural clash” (Buono and Bowditch, 1989; Chatterjee et al., 1992; Nahavandi and
Malekzadeh, 1993; Cartwright and Cooper, 1995; Brock et al., 2000). For example,
cultural clash has been shown to have dysfunctional consequences such as lower
commitment and cooperation among the acquired employees (Sales and Mirvis, 1984;
Buono et al., 1985), greater turnover among the acquired managers (Hambrick and
Cannella, 1993; Lubatkin et al., 1999), a decline in shareholder value of the buying firm
(Chatterjee et al., 1992), and a deterioration of operating performance of the acquired
firm. Weber (1996) and Very et al. (1997) identified the process of “socio-cultural
integration” as a key factor in the poor performance of M&As. Notably, it has been
estimated that about a quarter to half of M&A failures are caused by problems of
integrating the different cultures and workforces of merging firms (Davy et al., 1988;
Walter, 1985). Similar conclusions were drawn by Cartwright and Cooper (1992) and
Carey (2000) who argued that mergers between certain culture types can be disastrous
in that they lead to cultural ambiguity, confusion and hopelessness. Therefore, the
management of “the human factor” in mergers and acquisitions has been recognised as
an important source of success by a number of scholars such as Kimberly and Quinn
(1984), Buono and Bowditch (1989), Cartwright and Cooper (1992), and Lubatkin and
Lane (1996). Bijlsma-Frankema (1997) argues that culture plays a major part in the way
employees react to the new structure of their work environment, ranging from quick
adaptation and commitment to the new expectations, to resistance, withdrawal and
other forms of unproductive behaviour. A number of researchers suggest that merging
companies should seek for fit, especially cultural fit, in order to avoid conflicts. For
instance, Nahavandi and Malekzadeh (1988) and Chatterjee et al. (1992) emphasise
cultural fit as an important factor in creating shareholder value in mergers.

Data collection method and sample characteristics

The sample of interest for the study was large-sized European chemical companies
involved in mergers and acquisitions over the period 1999-2004. The chemical industry
was chosen because of its strong presence in the market and is also one of the largest
manufacturing sectors in Europe. Chemicals serve a global industry and despite the
fact that the globalisation of the industry is not the focus of this paper, looking at
chemicals allows us to analyse the effects that go beyond national borders.
The research population of interest was obtained from secondary sources (Chemical
Market Reporter 6/3/2000, 19/8/2002, 23/2/2004 and Chemical Engineering News
16/12/2002). Three restrictions were employed in selecting the final sample: first the
sample was restricted to mergers and acquisitions with minimum turnover of $5 billion
dollars because the research was aimed at large merger deals which took place over Culture in the
1999-2004 period. Second, the sample was restricted to M&A deals which took place in M&A process
Europe due to this study’s interest in the European chemical industry. The third
restriction relates to the company’s experience or involvement in mergers and
acquisitions. These restrictions led to a sample of 32 consisting of 16 each from the
acquirer and the target. The names of companies interviewed are listed in the
appendix. 1409
To evaluate the role of culture in M&As, a qualitative approach was chosen.
Although a quantitative approach has been used by several researchers (see, Hofstede
et al., 1990), some concerns have been raised. For example, Schein (1984, 1985) suggests
that the “basic assumptions” underpinning culture may not be adequately captured in
quantitative analysis and therefore no in-depth analysis can result from this approach.
Moreover, the uniqueness of each M&A may not be fully measured using standardised
questionnaires or surveys. In short, a qualitative method is preferred when an in-depth
understanding is desired. For these reasons, the data for this study was collected via 32
in-depth interviews with senior managers from both the acquirer and the target
companies based in eight European countries between 1999 and 2004 period.
The design of the questions for the interview was heavily influenced by the
recommendations of Dilman (1978) and Oppenheim (1992) who both presented
comprehensive reviews of literature on questionnaire design. The interview questions
generated were based on the aims of the study and literature review. The questions
were also checked against questions of similar studies (Cartwright and Cooper, 1996;
James et al., 1998; James, 2002).
The questionnaire for the interviews was divided into three main parts as follows:
(1) The first part was concerned with the company’s background (for example,
company’s products and markets, size etc.) as well as information about the
motivation for the company’s decision to merge and its target selection criteria.
(2) The second part of the questionnaire had questions about the strategic and
culture consideration during the various stages of the M&As process.
(3) The last part dealt with questions relating to the role of culture, cultural
integration and cultural fit in the merger and acquisition integration process.

Between 2002 and 2004, 32 open and semi-structured interviews – 95 percent

telephone and 5 percent personal, were conducted with senior managers who were
either key decision makers or interface managers involved in the M&As. An
examination of the job titles of the respondents revealed that: 12 percent of the
respondents were merger and acquisition managers; 43 percent were divisional
managers; 29 percent were managing directors and 16 percent were corporate
communication managers. It is likely that these respondents are involved in strategic
decision making relating to M&As in their respective companies. Secondary data were
also collected from company reports, internal company documents and reports,
industry reports and previous research on the subject area. Using several sources of
information allows us to triangulate data and thus improve the reliability and validity
of the findings derived from the case material.
MD Characteristics of the sample
44,10 The characteristics of the sample are summarised in Table I. The table shows the
various European countries involved and number of samples. The table indicates that
about 40 percent of the interviews involved mergers and acquisitions that took place in
the UK. This is followed by Switzerland 25 percent, with Sweden and Spain having 2.5
percent each. With regards to size, about half of the sample has a turnover of $5-$15
1410 billion, $16-$25 billion (12.5 percent), $26-$25 billion (18.75 percent) and over $35 billion
(18.75 percent). The years of acquisition runs from 1999-2004 with over 30 percent
occurring in 2000, 25 percent in 1999 and 2002 and 6.25 percent each in 2001, 2003 and
2004.

Data analysis
The interviews were recorded, transcribed, organised and grouped into meaningful
categories. It was then coded in NVivo software to help in the process of creating
labelling and layering the connection between the identified categories. The
researchers applied the rules of “pattern matching” and comparative methods to
draw conclusions (Yin, 1994). To derive further in-depth inferences, the complex
relationships among the variables were studied for each acquisition, using the content
analysis and explanation building modes of analysis.

No. %

Country of origin
UK 12 40
Switzerland 8 25
The Netherlands 4 15
Germany 2 5
France 2 5
Belgium 2 5
Sweden 1 2.5
Spain 1 2.5
Total 32 100

Turnover in $ billion
5-15 8 15
Over 15-25 2 12.50
Over 25-35 3 18.75
Over 35 3 18.75

Year of M&A
1999 4 25.0
2000 5 31.25
2001 1 6.25
Table I. 2002 4 25.0
Characteristics of the 2003 1 6.25
sample 2004 1 6.25
Results and discussion Culture in the
The role of culture in mergers and acquisitions M&A process
In the present highly competitive environment both small and big players in the
chemical industry are changing their strategies towards horizontal growth in order
to follow and adapt to the rapid changes in the socio-economic and technological
environment. Through mergers and acquisitions, the interviewed companies were
trying to grow and expand their assets, sales and market share, but also to 1411
improve their scientific knowledge, technological competences and product
portfolio. Therefore, the benefits of consolidation extend beyond pure financial
motives, such as creating new market opportunities, building core competences,
expanding economies of scale and sustaining long-term competitive advantage.
Furthermore, chemical firms are shifting the focus of their activities into higher
value added production by changing the emphasis of their research and
development by buying firms that specialise in fields, which they want to move
into. Therefore, mergers and acquisitions represent a strategic choice that chemical
companies follow in order to grow.
On the role of culture in M&As, we found that culture plays a key role in the
integration process and consequently the overall success of M&As. Astra’s respondent
pointed out that “ignoring cultural issues may impede seriously the merger process”.
Similarly, Novartis’s respondent said that:
Each organisation has its own norms, customs, roles, rituals, ceremonies, dress code,
symbols, and hierarchy and reporting lines. These are all essential building blocks of culture,
which are usually specific and unique to each organisation (Novartis).

Differences in any of these core values between the two merging organisations create an
uncertain situation for the company managers and directors (Novartis).
Notably in the period after the merger Novartis managers realised that there were
dysfunctional culture clashes that they had to deal with and that affected performance
negatively.
This point was highlighted by over 90 percent of the respondents indicating that
cultural differences have tremendous impact on the success or otherwise of M&As in
meeting the organisations’ and investors expectations. In other words, an
overwhelming majority of the respondents suggested that cultural differences are to
be regarded as detrimental or a major impediment to the success of M&As in that they
lead to misunderstanding, fuel emotional reactions and exacerbate conflicts and
clashes. Dow-Union Carbide’s merger and acquisition manager reinforced this by
stating that:
Key priority of the integration process is to integrate the two cultures . . . and it is not always
an easy task.
He continued:
Although we have a rigorous change management methodology that we adopt in each
merger and acquisition situation we expect to have some managerial or cultural conflicts,
hopefully only for a short period after the merger (Dow-Union Carbide).
MD Similarly, ICI’s technology consultant said that:
44,10 It is important to have cultural criteria from the beginning of the merger discussions in
order to increase M&A’s potential to succeed, but it is not always the case (ICI).
Aventis’s chief technology officer agrees and indicates that:
In those cases that cultural fit is not major concern during the pre-merger period
1412 mergers often fail in that cultural differences give rise to tensions and consequently the
integration process takes much longer than planned (Aventis).
This view is re-echoed by Glaxo Smith Kline’s respondent who indicated that:
Differences in organisational culture and conflicts concerning leadership interfered with the
completion of some of the mergers that Glaxo Smith Kline undertook (Glaxo Smith Kline).
The finding that culture plays a key role to the successful integration of M&As is
therefore not surprising in that it is consistent with the past studies such as Newbould
(1970), Firth (1980), Weber et al. (1996), Deloitte & Touche (2001), which pointed out
that cultural conflicts are a major impediment to M&As success. The conclusion
emanating from this finding is that cultural differences do not only create
organisational challenges that impede integration and increase acquisition costs but
also lead to a reduction of profitability and shorten the life of the merged companies.
This study also finds that cultural aspects of the M&As integration process are
often given relatively little attention especially during the pre-merger stage of the
process. This is significant in that this finding is against the backdrop that all
respondents highlighted the importance of effective cultural integration to mergers
success. For example, GlaxoSmithKline’s corporate communications manager pointed
out that:
In some of the mergers that they undertook there were not adequate discussions and/or
information sharing with the unions, something that had an impact on the employees’ morale,
stress levels and behaviour (GlaxoSmithKline).
The lack of attention on cultural issues by merging companies in chemical industry is
further reinforced by Solutia’s chief executive. In analysing the reasons for his
company’s divestment from Monsanto, the chief executive pointed out that:
The cultures within the corporation had begun to diverge, increasing the gap between the two
cultures, something that impact seriously on employees motivation and the company’s
operating efficiency (Solutia).
In the light of this finding, we want to point out that mergers and acquisitions usually
trigger, to a varying extent some kind of cultural dynamic affecting employees’
performance, attitude and behaviour and therefore it is important for managers to
recognise this and give cultural integration issues a serious attention at the early
stages of merger process. In particular, we suggest that employees’ representation and
participation during the pre-merger stage can lead to high levels of trust between key
stakeholders, and consequently reduce dissatisfaction, resistance to change and the
risks associated with culture clashes. In other words, to minimise risks relating to
culture incompatibilities, we suggest that managers should carefully analyse and
understand the target organisation’s drivers and motives to merge, policies, norms, Culture in the
priorities, values, language, communication channels and reporting lines in order to M&A process
evaluate the compatibility of the two cultures, to highlight the positive and negative
attributes of each of the cultures and then decide the level of integration and/or
independence necessary for a successful co-existence. Similar view was echoed by the
managers of Dow-Union Carbide who suggested that:
1413
In order to avoid cultural clashes managers need to develop a flexible and well-defined
merger and acquisition pre-plan and plan. They further suggested that managers should
form merger and acquisition integration teams with representatives from all the merging
partners as well as experts in change management and organisational psychology and in
some cases, even hire external consultants to integrate the two companies processes and
systems (Dow-Union Carbide).
It is thus argued that by forming such a team you put the problem under the control of
a specialist team who has expertise, time and logistical support to deal with it
effectively. Another important way of minimising the potential risks emanating from
cultural differences is to implement a job rotation system among the key managers in
both the acquired and acquirer firms to bridge the gaps between the two organisations,
identify areas of best practice and plan the change process. Thus key managers of both
companies should work closely to appreciate the practices of each organisation with
the view of adopting the best code of practice during the integration. Furthermore, due
to the communication problems and related conflicts highlighted during the interviews
it is necessary for the managers to re-engineer the merging organisations
communication and information flow processes and systems to reduce the levels of
stress and uncertainty of the employees and help the implementation process of the
integration strategies.

Summary and conclusions

This study has examined the role played by culture in enhancing successful
integration of mergers and acquisition process in the chemical industry. First, the
study identifies culture differences between the merging firms as a key element
affecting the success of M&As. Almost all the interviewees agreed that M&As often
failed to achieve the expected outcomes of the merger because of lack of cultural fit or
incompatible cultures. The study also finds that managers pay less attention on the
target selection criteria, and do not analyse thoroughly the cultural fit of the merging
entities especially during the pre-merger stages. For instance, ICI’s technology
consultant said that:
It is important to have cultural criteria from the beginning of the merger discussions in order
to increase a M&A’s potential to succeed, but it is not always the case (ICI).
Most of the interviewees pointed out that before the merger, they did not have a
finalised and complete culture integration strategy and in some cases that they had it
was for the two extreme cases of either total cultural integration or total autonomy.
This suggests that managers in merger cases did not have coherent and proactive
strategies for optimising the benefits of joining the two cultures together or for dealing
with cultural problems and therefore decisions taken are at best tenuous and in some
MD cases reactive in solving culture related issues. Even in some cases that there were
44,10 defined strategies and plans, the study finds that, managers fail to review these plans
at different stages of the integration process thereby leading to huge problems in the
immediate aftermath of the merger. The managerial implication of this finding is that
cultural fit constitutes a key factor in M&As’ success and should be given the
1414 necessary attention at all stages of M&As. The tentative conclusion to be drawn here is
that, good pre-merger planning with culture placed at the heart of integration
strategies and implementation and the creation of a positive atmosphere for the change
– before initiating any actual consolidation of human and physical assets, are likely to
contribute to mergers and acquisition success and value creation.
Another important finding of this research is that nearly all the interviewees agreed
that communication is critical in developing trust between the companies involved and
consequently lead to successful integration. Lack of effective communication heightens
culture differences and creates tensions between the employees. For example,
Dow-Union Carbide’s merger and acquisition manager said:
In order to minimise managerial and cultural conflicts we focus on the development of good
communication links with the target company.

To reduce communication problems, we suggest that managers must not only give
information but actively involve all the stakeholders and especially the employees in
the merger processes. We also suggest the implementation of job rotation system
whereby key players exchange jobs and/or work together with their counterparts in
the merging company to familiarise themselves with what goes on and the “way of
doing things” in each company.
Furthermore, we suggest that the integration process should have a separate
sub-task for the integration of the cultures. This sub-task as Mitchell and Holmes
(1996) argued may be challenging due to human opposition and conflicts. The
integration of culture should be an active and gradual process in which the two
organisations learn to work and do things in the same way or understand why they
should do things in a different way. During this stage of the process more attention
must be given to the levels of integration between the two cultures and the creation of
an atmosphere that can support cultural changes. Haspeslagh and Jamison (1991)
argued that, in order to create that atmosphere, organisations should understand each
other’s culture and people in both organisations should be willing to work together
after the merger, something that could only be achieved with socio-cultural integration
and communication between the two organisations’ employees. In the post merger
phase it is necessary for companies to maintain that atmosphere and also introduce
processes and systems to measure and evaluate the effectiveness of the new
organisational culture to organisations performance and to the employees moral and
respond accordingly.
To conclude, we propose a four staged approach for managing cultural integration
process in M&As which encompasses the following:
Phase 1: pre-merger and pre-planning stage Culture in the
This phase involves information gathering and developing trust through M&A process
one-to-one interaction between members of both companies. This stage
culminates into pre-planning stage aimed at identifying cultural gaps and
clarification through holding of retreat/workshop, and the use of job rotation in
an attempt to identify:
(1) Structural/physical characteristics of each business.
1415
(2) Beliefs and values behind these practices.
(3) Decision-making processes and communication lines.

Phase 2: planning stage

This stage aims to produce the action plan to facilitate the cultural integration process.
Key tasks to be undertaken are as follows:
(1) Negotiating the composition of a sub-taskforce for integrating culture.
(2) Decide on the extent of cultural integration.
(3) Decide on methods and timing of change.
(4) Assess the potential risks.
(5) Identification of training needs.
(6) Setting integration goals.
(7) Budgeting for integration.

Phase 3: implementation stage

This stage is designed to integrate structure and control systems and it involves the
following activities:
(1) Creating atmosphere for cultural integration.
(2) Communication.
(3) Training/staff development.
(4) Re-organisation.
(5) Integrate structures, functions /control systems.

Phase 4: evaluation, review and reflection

(1) Evaluate expected against actual outcomes.
(2) Learn lessons.
(3) Revise through consultations.

Future research
It is pertinent to point out that the proposed framework in Figure 1 was sent to five
mergers and acquisition managers from the sampled firms for evaluation and feedback
regarding its applicability. The overall response suggests that the framework provides
a good “stage gate” approach and general guide for managing culture. While the
proposed framework provides an important general guide for managing culture, it
MD
44,10

1416

Figure 1.
Framework for managing
cultural integration
must be emphasised that, it is one of the first attempts in enhancing our understanding Culture in the
on how we manage culture in M&As integration process and therefore more research M&A process
appears warranted. Future research should focus on the same theme using a
quantitative method, particularly factor and multivariate analysis with a larger sample
from a cross-section of industries.

1417
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Appendix
List of companies interviewed:
. Pfizer;
.
Dow Chemicals (Union Carbide);
.
BASF;
.
GlaxoSmithKline;
.
DuPont;
.
Sanofi-Aventis;
.
Novartis;
.
Astra-Zeneca;
.
Degussa;
.
Akzo Nobel;
.
Clariant;
.
ICI;
 .
Eastman; Culture in the
.
Rhodia; M&A process
.
Rohm and Haas; and
.
Ciba Specialty.

Corresponding author 1421

Agyenim Boateng can be contacted at: a.boateng@leedsmet.ac.uk

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