There are various aspects which revolve around mergers and acquisitions which are unrelated to the financial part of it, but which still can have a major impact on the success or failure of a planned merger or acquisition. One of these is how to integrate company culture when two distinct companies are involved, and all the many components of corporate culture from each business are thrown together.

Cultural Issues

To start with, mergers and acquisitions inherently create uncertainty among employees, since they are very likely to be uncertain or confused about what the future might bring. That makes it essential for there to be a strong and effective integration plan to overcome this uncertainty, or it will have a negative impact on the finances of the merger or acquisition. Research has shown that almost 70% of mergers and acquisitions do not provide the expected financial return because cultural issues have not been adequately accounted for.

Overcoming Cultural Issues

One of the keys to heading off the uncertainty caused by mergers and acquisitions is to communicate early and frequently with employees involved. When employees are left in the dark, they can’t help but be extremely uncertain, and that can translate into their job performance. By communicating frequently and assuring employees that they are valuable to the company, much of this uncertainty can be overcome.

It’s also very important to establish a common culture, ideally one which includes components of each of the two cultures being merged. Identify any gaps which exist between these two cultures, and try to fill them so that you can develop a cultural integration plan which addresses both former groups of employees, and now treats them as a single unified workforce.

Need Financing for Mergers and Acquisitions?

When carrying out mergers and acquisitions, cash is almost always needed to pull it off successfully. If you have either of these two business propositions in mind, contact us at Flex Capital, so our financial specialists can discuss your funding needs, and explore ways that we might be of assistance.