From play to pay: a multifunctional approach to the role of culture in post-merger integration

Abstract

PurposeThe literature on Mergers and Acquisitions (M&A), cultural differences between organizations have frequently been identified as one of the main challenges in the process of post-merger integration (PMI). Existing research has explored a broad variety of cultural differences in perceptions, such as those relating to expectations, norms, values and beliefs within the respective organizations, and how these affect the process and success of PMI. However, less attention has been paid to the relevance of the macro-societal context to PMI. The ambition of this article is, therefore, to advance our understanding of how macro-level societal factors define organizational cultures and affect the success of PMI.Design/methodology/approachWe draw on social systems theory as devised by Niklas Luhmann, assuming that organizations are always embedded in the macro-level societal context of distinctive realms of social reality—such as the economy, politics, religion and the arts—that make up the so-called “function systems”. Looking at the case of the integration of a Brazilian technology start-up into a market-leading corporation, we analyze the dominant orientations towards these function systems, and the changes in these orientations over time.FindingsThe results suggest that differences in organizational culture in PMI can be partly explained by differences in orientations to the function systems. Moreover, forcing dramatic changes of orientations towards the function systems within a merged entity can severely damage its raison d'etre in the first place, potentially leading to, in some sense, an account of “culture murder”.Originality/valueThis article is unique in demonstrating that organizations are multifunctional systems whose culture is defined by the highly specific and potentially varying degrees of importance they place on individual function systems and that knowledge or neglect of these functional profiles may seriously affect the success of post-merger integration. Against this backdrop, the article presents a multifunctional profiling method that may easily translate into PMI management tools.

Hyper-project portfolio management: post-merger project portfolios

“…, 2020; Khan et al. , 2020; Kroon and Noorderhaven, 2018; Kroon and Reif, 2023; Safavi, 2021; Sales et al. , 2022; Schlindwein and Geppert, 2020; Thelisson et al.…”

“…, 2020). Many aspects of PMI are impacted not only by cultural differences and sociocultural status (Sales et al. , 2022; Schlindwein and Geppert, 2020) but also by the emotional dimensions of managers and employees, which play a crucial role in the process (Fiorentino and Garzella, 2015; Al Hosani et al.…”

“…Most researchers studied the structural integration of PMI overwhelmingly (Bauer et al, 2015(Bauer et al, , 2018Fern andez et al, 2019;Graebner et al, 2017;Lauser, 2010;Maire and Collerette, 2011;Oh and Johnston, 2020;Uzelac et al, 2016). Another avenue generating prolific descriptive studies is the human side of PMI to catch the desired synergy level (Durand, 2016;Fiorentino and Garzella, 2015;Gomes et al, 2013;Al Hosani et al, 2020;Khan et al, 2020;Kroon and Noorderhaven, 2018;Kroon and Reif, 2023;Safavi, 2021;Sales et al, Schlindwein and Geppert, 2020;Thelisson et al, 2020;Thelisson and Meier, 2022;Weber et al, 2012;Yang et al, 2019).…”

“…and Killen, 2019;Nogeste, 2010;Veiga and Franco, 2015;Zhu et al, 2020). Many aspects of PMI are impacted not only by cultural differences and sociocultural status (Sales et al, 2022;Schlindwein and Geppert, 2020) but also by the emotional dimensions of managers and employees, which play a crucial role in the process (Fiorentino and Garzella, 2015;Al Hosani et al, 2020;Khan et al, 2020;Kroon and Noorderhaven, 2018;Kroon and Reif, 2023;Safavi, 2021;Thelisson and Meier, 2022). Academic studies in the literature have primarily focused on industry-specific portfolios, but there is a need for a suitable framework that can accommodate extended and mixed industries, as seen in PMI studies.…”

Fit for functional differentiation: new directions for personnel management and organizational change bridging the fit theory and social systems theory

“…That is, people's P–O fit perceptions exist and can change before, during and after being in the organization. Again, the social systems' theory assumes that multifunctional systems, such as organizations, change their systems' preferences overtime when confronted with the need to adapt to a change in context (Roth, 2021; Sales et al ., 2021).…”