Chapter 3: Managing Cultural Integration in Mergers and Acquisitions

The main challenge for companies in the mergers and acquisitions (M&A) process is cultural integration management. Cultural integration management generates uncertainty, tension, and loss of motivation within human resources (HR). There is no strategy for avoiding these effects, but appropriate management of cultural integration can help to reduce them significantly. Therefore, in the context of mergers and acquisitions processes, the importance of cultural factors in human resources management needs to be analyzed. The objective of this chapter is to explain the key factors of cultural integration management in mergers and acquisitions processes. After reviewing the previous literature about this topic, a three-stage theoretical model has been developed, grouping the relevant factors of cultural integration for each stage of the mergers and acquisitions process. In the first stage (planning–cultural analysis), firms need to analyze due diligence, cultural similarities, degree of compatibility and the communication process. In the second stage (integration–cultural fit), companies must manage cultural resistance, and the firms’ integration through human resources involvement and by retaining valuable human resources. In the final stage (implementation–cultural endstate), it is analyzed to assess psychological state, the cultural endstate targeted and communication effectiveness. The main conclusion is “organizational culture is one of the decisive factors to be considered for the success of cultural integration in mergers and acquisitions processes.”