Scan of management and organizational cultures in business acquisitions
All the members of the organization are at the center of the organizational culture, and the organizational culture is formed in the interaction between its members. Culture is shaped by people’s backgrounds, values and practices, and companies of different ages have been layered over the years with different practices and values that influence the organizational culture. Organizational culture is not just about buzzwords, but culture is a key factor in, for example, attracting employees and employee commitment. Organizational culture is a key factor in successful business operations.
Acquisitions create a risk of cultural incompatibility when the different organizational cultures of the acquiring company and the target company are matched. The integration of cultures includes risks in the same way as, for example, the finances of the target company. Research shows that the successful integration of corporate cultures has a significant impact in order to achieve the desired synergy benefits arising from a business acquisition. For this reason, we recommend expanding the due diligence processes to also cover the organizational culture and management practices.
Our scan of management and organizational cultures is designed in such a way that we first scan the acquiring company’s organizational culture, core values that guide operations, daily operating methods and interaction between different members of the organization. After this, we carry out a corresponding mapping for the target company. In the survey, we use group and individual interviews to collect qualitative data. Our goal is to scan whether the differences in the management and organizational cultures of the acquiring company and the target company constitute obstacles to the success of the acquisition. We discover which areas should be paid attention to after the completion of the acquisition, to ensure implementing successful integration in the best possible way.