Can Two Rights Make a Wrong?

When Cultures Collide

E.H. Schein, an expert in the field of organizational development, coined the term “corporate culture.” He defines it as “a pattern of shared basic assumptions” that arise from a group’s experiences of solving problems both with one another and with the outside world. The group adopts the assumptions that worked and teaches them “to new members as the correct way to perceive, think and feel in relation to those problems.”

Harvard Business School Professor John Kotter explains that corporate culture manifests itself through the actions of employees. Michigan Business School Professor Kim Cameron says that corporate culture is even more important than business strategy, market dominance or technological capabilities. Jack Welch, the former CEO of General Electric, believes strongly in the value of corporate culture to achieve marketing and operational goals.

Thus, companies that merge must find some way to combine their cultures as well as their operations. Failure to do so can result in havoc – and when mergers blow up, they severely hurt the firms involved. If you do not address culture issues during an M&A, costs can go up and productivity...