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While cultural fit has been acknowledged to be a potentially important factor in mergers and acquisitions, the concept has been ill-defined. Hence, its relationships to other human aspects in mergers have not been rigorously examined. Further, the relationships between cultural differences and other human factors to the effectiveness of the integration process and financial performance have not been subject to rigorous research that use relatively large samples of mergers and acquisitions. The present study assesses the role of corporate cultural fit, autonomy removal, and commitment of managers to the merger in predicting effective integration between merger partners in different industry sectors. The relationships between, and role of, these variables are found to be complex; they vary across industries and have different relationships with different measures of performance.
INTRODUCTION
Mergers and Acquisitions (M&As) have become an increasingly broadbased phenomenon, and their numbers are dramatically growing in United States, Europe, and throughout the globe (Cartwright & Cooper, 1993a,b; Haspeslagh & Jemison, 1991; Melin, 1992). The primary reason for M&As is to achieve synergy by integrating two business units in a combination that will increase competitive advantage (Porter, 1985). Unfortunately, many M&As have not lived up to expectations. Cartwright and Cooper (1993a) note that, at best, barely half of all M&As meet initial financial expectations, and that, irrespective of the measures used, failure rates are typically in the 50-60% percent range. Beyond financial performance, M&As often create significant trauma for the employees and managers, especially of the acquired firms, often resulting in attitudinal and productivity problems (e.g., Bouno, Bowdich, & Lewis, 1985; Nahavandi & Malekzedah, 1988; Schwieger & DeNisi, 1991) and turnover of valued personnel, including top executives (Walsh, 1988, 1989; Hambrick & Cannella, 1993). Such human resource difficulties may add costs to the integration process and undermine the ability of the firm to achieve synergy, and thereby offset the hoped-for benefits of merging.
While lack of cultural fit has been frequently mentioned as a potential factor in M&As' failures in the creation of human resource problems (e.g., Hambrick & Cannella, 1993; Nahavandi & Malekzedah, 1988; Weber & Schweiger, 1992), empirical studies that investigate the role of cultural fit in M&As remain a rarity. Furthermore, relatively little has been done in terms of specification and operationalization of the...