Shades of Culture and Institutions-in International Mergers

Abstract

This article explores merger integration processes in the international context and the way in which the merged companies cope with difficulties emanating from firm-specific and nation-specific differences. The first part of the article discusses the consolidation process in general. Four factors are identified that define the significance of this process: (1) the degree of compatibility of adminis trative practices, management styles, organizational structures or organizational cultures; (2) the kind and degree of post-merger consolidation; (3) the extent to which parties value and want to retain their organizational integrity; (4) the nature of the relationship between the two organizations. In order to create a viable new organization it is argued that leadership, the symbolic reconstruction of a new identity, superordinate goals, and introducing multigroup memberships may reinforce integration. To illustrate the discussion, three case studies of large Dutch-German mergers are examined in the second part of the article. These cases show that leadership, an appropriate organizational structure, and compatibility of merger motives may be important facilitators in the merging process.