Surviving Post-merger ‘Culture Clash’: Can Cultural Leadership Lessen the Casualties?

Abstract

Merger and acquisition (M&A) activity continues to rise, despite evidence that the majority of M&As fail to meet the financial and synergistic expectations of shareholders or employees. Post-merger ‘cultural clashes’ are often blamed for disappointing M&A outcomes, yet little research exists to guide organizations through the difficult process of cultural integration. In particular, the process of cultural leadership as an important influence on merging organizational cultures and subcultures has been only sporadically examined. Through an analysis of interviews with 42 post-merger employees, this study qualitatively explores the construct of cultural leadership (Trice & Beyer, 1991, 1993). The results advance the definition and measurement of cultural leadership, bringing it out of the theoretical realm to explore the key processes of creation, change, and integration that comprise effective post-merger cultural leadership. These findings have important implications for how organizations can anticipate post-merger cultural clashes and tailor leadership programs to address their underlying roots, ultimately enhancing merger success rates. © 2006, Sage Publications. All rights reserved.