Cultural Compatibility in the Implementation of Mergers and Acquisitions

the Banking Sector

Claudio De Mattos, Laura Salciuviene, Leon Lewis

Research output: Contribution to journalArticle

Abstract

For the last two decades mergers and acquisitions (M&As) have played a leading role in the global economy. The level of M&A activity has steadily increased in recent years. However, the failure rate of such ventures is still very high. The literature indicates that cultural differences between the acquiring and the acquired companies are a major factor influencing the failure or underperformance of a number of M&As. Cultural distance, it is argued, hinders cross-border M&As by increasing the tensions of the implementation process. The values and behavioural differences between distant cultures influence reactions to M&A issues, causing difficulties in combining the organisations. Therefore, cultural compatibility of the merging organizations supports the achievement of a successful implementation. The objective of this study is to examine the cultural compatibility of merging companies, in view of a number of M&As implemented by HSBC, currently one of the largest banking and financial service organisations in the world. The contribution of this study concerns the understanding of the cultural (in) compatibility of the parties during the process of implementation of cross-border M&As, and its implications for practice and scholarship. [ABSTRACT FROM AUTHOR] Copyright of Economics & Management is the property of Kaunas University of Technology, Faculty of Economics & Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Original languageEnglish
Pages (from-to)338-345
Number of pages8
JournalEconomics & Management (Ekonomika ir Vadyba)
Volume12
Publication statusPublished - 2007
Externally publishedYes

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Compatibility
Banking sector
Mergers and acquisitions
Merging
Economics
Cross-border
Cultural distance
Failure rate
Venture
Service organization
Underperformance
Banking services
Financial services
Influencing factors
Electronic mail
Cultural differences
Global economy
Warranty
Implementation process

Cite this

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title = "Cultural Compatibility in the Implementation of Mergers and Acquisitions: the Banking Sector",
abstract = "For the last two decades mergers and acquisitions (M&As) have played a leading role in the global economy. The level of M&A activity has steadily increased in recent years. However, the failure rate of such ventures is still very high. The literature indicates that cultural differences between the acquiring and the acquired companies are a major factor influencing the failure or underperformance of a number of M&As. Cultural distance, it is argued, hinders cross-border M&As by increasing the tensions of the implementation process. The values and behavioural differences between distant cultures influence reactions to M&A issues, causing difficulties in combining the organisations. Therefore, cultural compatibility of the merging organizations supports the achievement of a successful implementation. The objective of this study is to examine the cultural compatibility of merging companies, in view of a number of M&As implemented by HSBC, currently one of the largest banking and financial service organisations in the world. The contribution of this study concerns the understanding of the cultural (in) compatibility of the parties during the process of implementation of cross-border M&As, and its implications for practice and scholarship. [ABSTRACT FROM AUTHOR] Copyright of Economics & Management is the property of Kaunas University of Technology, Faculty of Economics & Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)",
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Cultural Compatibility in the Implementation of Mergers and Acquisitions : the Banking Sector. / De Mattos, Claudio; Salciuviene, Laura; Lewis, Leon.

In: Economics & Management (Ekonomika ir Vadyba), Vol. 12, 2007, p. 338-345.

Research output: Contribution to journalArticle

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