The importance of culture and communication during mergers and acquisitions

Abstract

The purpose of this study is to examine the importance of cultural integration and communication during mergers and acquisitions. It further aims to identify the role the Human Resource Department has during this process. In order to achieve this, extensive research of recent publications was conducted and the findings were compared with the results of the primary research undertaken, in the form of case studies. The study revealed that merger failure is usually associated with neglect of the 'people' issues. The HR department plays a critical role in addressing these. However, successful integration of the two organisations depends on the involvement of the HR department from the outset. The crucial role of cultural analysis both pre and post merger was highlighted. It was also found that communication is a vital tool in merger integration. Case studies revealed an inadequate attention to cultural issues and distinct lack of involvement of the HR department in the overall process. However, both organisations did give due consideration to communication throughout the process, albeit late in one case! The recommendations include the early, and continuous, involvement of the HR department in the merger process, the establishment of a framework involving sound, ongoing cultural analysis and a consistent communication channel.