Sie sind auf Seite 1von 13

Acculturation in Mergers and Acquisitions

Author(s): Afsaneh Nahavandi and Ali R. Malekzadeh

Source: The Academy of Management Review, Vol. 13, No. 1 (Jan., 1988), pp. 79-90
Published by: Academy of Management
Stable URL:
Accessed: 28/09/2010 12:18

Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at JSTOR's Terms and Conditions of Use provides, in part, that unless
you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you
may use content in the JSTOR archive only for your personal, non-commercial use.

Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at

Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed
page of such transmission.

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact

Academy of Management is collaborating with JSTOR to digitize, preserve and extend access to The Academy
of Management Review.
?Academyof ManagementRevieW,1988,Vol. 13,No. 1, 79-90.

Acculturation in
Mergers and Acquisitions
Arizona State University West Campus
A model focusing on the process of adaptation and acculturation in
mergers and acquisitions is presented. It is proposed that the degree
of congruence between the acquirer and the acquired organizations'
preferred modes of acculturation will affect the level of acculturative
stress. The latter will in turn either facilitate or hinder the implementa-
tion of the merger.

Mergers have proven to be a significant and The role of acculturation in mergers is address-
increasingly popular means for achieving corpo- ed in this paper and an interdisciplinary accultur-
rate diversity and growth. The effectiveness of ative model of the planning and implementation of
this strategy depends upon extensive planning mergers as a strategic alternative is proposed.
and careful implementation (Blake & Mouton, It is proposed that the degree of congruence be-
1984; Jemison & Sitkin, 1986; Salter & Weinhold, tween the preferred modes of acculturation for
1979). Most of the research on mergers has fo- the acquirer and the acquired company will af-
cused on strategic and financial fit between the fect the success of the implementation of the
acquirer and the acquired firms, though some merger. Other organizational systems such as
research has dealt with the integration of vari- structure, technology, and control systems are
ous organizational systems, such as technology not specifically addressed. This model deals with
and management control systems (e.g., see diversification through acquisitions rather than
Shrivastava, 1986). diversification through internal means (i.e., re-
These lines of research, although essential to search & development). Theories from cross-
an understanding of mergers, leave other impor- cultural psychology are adapted to explain the
tant aspects relatively unexplored. With a few processes of cultural adaptation and accultura-
exceptions (e.g., Sales & Mirvis, 1984; Shrivas- tion in mergers.
tava, 1986), the role of sociocultural factors and
the processes involved in merging two organiza- Review of Existing Research
tions as cultural entities have not been studied
thoroughly (Jemison & Sitkin, 1986; Schein, 1985). Organizational Culture
Issues related to organizational fit and the man- Culture is defined in many different ways (for
agement of human resources have received a review see Jelinek, Smircich, & Hirsch, 1983).
some attention (e.g., Barrett, 1973; Hayes, 1979; Each of the various definitions emphasizes a par-
Sutton, 1983); however, much of the research ticular focus and level of analysis (for some ex-
has been prescriptive and relatively atheoretical, amples see Deal & Kennedy, 1982; Pettigrew,
and few models that are applicable across differ- 1979; Smircich, 1983; Tagiuri & Litwin, 1968; Van
ent organizations have been proposed. Maanen, 1979). With a few exceptions (e.g.,

Schein, 1984, 1985), the definitions of culture, tion the importance of more subtle issues (e.g.,
however, fail to recognize it as a multidimen- Jemison & Sitkin 1986; Lubatkin, 1983, 1987;
sional, multilevel concept. Marks, 1982). However, there appears to be a
Most of the definitions of culture focus on the gap between the research about the various clas-
beliefs that members of an organization share. sifications of mergers and the research about
Although the term often is used as if organiza- the role culture plays in the overall implementa-
tions have a monolithic culture, most firms have tion of mergers..
more than one set of beliefs influencing the be-
havior of employees (Sathe, 1985). These vari- Mergers in Strategic Management Research
ous subcultures within one organization may be In strategic management, mergers are most
divided along occupational, functional, product commonly classified on the degree of related-
or geographical lines; such subcultures may be ness of two firms. Although this approach was
enhancing, orthogonal, or counter to one an- developed for studying overall corporate diversi-
other (Sathe, 1985). fication strategies, without distinguishing be-
In this paper culture is defined as the beliefs tween internal and external means of diversifica-
and assumptions shared by members of an tion (Rumelt, 1974, 1982; Wrigley, 1970), it, along
organization. It is assumed that although a firm with Ansoff's corporate growth model (1965), is
may have a dominant culture, many subcultures used in the study of strictly external diversifica-
may coexist and interact. Researchers and prac- tions (mergers) as well (i.e., Chatterjee, 1986;
titioners focus on different subcultures depend- Lubatkin, 1987;Montgomery & Wilson, 1986). The
ing on their interests. However, understanding research on relatedness has shown that although
the culture of any company involves identifying unrelated acquisitions can be successful (Mont-
and deciphering the various subcultures and gomery & Wilson, 1986), firms that diversify into
gaining insight into how they interplay to influ- related businesses through internal or external
ence organizational behavior and decision means, on the average, outperform those that
making. diversify into unrelated ones (Hawks, 1984; Kuse-
Organizational culture has been used as an witt, 1985; Rumelt, 1974).
independent variable to explain differences in The choice of the degree of relatedness be-
managerial styles and organizational practices tween the two firms in mergers depends upon
(e.g., Roberts, 1970; Bhagat & McQuaid, 1982). It the motives behind the merger. These motives
also has been used as an internal variable focus- can include achieving operating synergies in
ing on the cultural elements within organizations production, in marketing, in scheduling, in man-
(e.g., Deal & Kennedy, 1982; Tichy, 1982). Cul- agerial experience, or in compensation systems
ture also has been used to explain the success (Chatterjee, 1986; Lubatkin, 1983). Also, many
of some organizations (e. g., Peters & Waterman, companies merge in order to achieve financial
1982). In fact, some researchers suggest that fit synergies such as risk reduction through diversi-
between culture and strategy is an essential ele- fication (Steiner, 1975) and access to more favor-
ment in organizational effectiveness (Ackerman, able financial terms (Lubatkin, 1983, 1987).
1984; Schwartz & Davis, 1981). Of particular inter- To obtain these synergies, a firm must select a
est in the study of mergers has been the use of merger target that is in varying degrees related
culture as a variable assumed to influence the to its business. Depending on the type of merger
implementation of strategic decisions (Davis, and the motive, the acquiring company must
1984; Schwartz & Davis, 1981; Shrivastava, 1986) decide on an implementation strategy. That strat-
or as a determinant of strategy (Ackerman, egy determines the extent to which the various
1984; Shrivastava, 1985). Most of the studies at- systems of the two firms will be combined and
tempting to identify the factors that affect the suc- the degree to which the employees of the compa-
cess of mergers as a strategic alternative men- nies will interface.
For example, in unrelated mergers, the goal is Integration at the managerial and sociocultural
to achieve financial synergy, thereby requiring level requires contact between the employees of
little if any integration of the operations of the the two companies. Where change occurs, it may
two companies (Shrivastava, 1986) and minimal affect the members of the acquired firm most
contact between their employees. As the degree strongly because they often are expected to adapt
of relatedness decreases (e.g., in vertical or un- to the practices of the acquirer (Jemison & Sitkin,
related mergers), managers may be less willing 1986; Sales & Mirvis, 1984). Processes that in-
to intervene in the business of the acquired unit volve mutual influence of two autonomous sys-
(Walter, 1985). Therefore, the acquirer may im- tems and firsthand contact between members of
pose changes only in the acquired unit's finan- two groups have received considerable atten-
cial systems (Shrivastava, 1986). On the other tion in anthropology and cross-cultural psychol-
hand, in related mergers, the acquirer is more ogy under the topic of acculturation (e.g., Berry,
likely to impose its own culture and practices on 1980; Chance, 1965; Redfield, Linton, & Herko-
the acquired company (Walter, 1985), thereby witz, 1936; Social Science Research Council,
initiating extensive interaction among the em- 1954).
ployees of the two firms. In these instances, the
Acculturation in Anthropology and
acquirer considers itself knowledgeable about
Cross-Cultural Psychology
an industry or the product, and it perceives a
need to reduce duplication and to achieve econ- The study of acculturation in anthropology and
omies of scale (Shrivastava, 1986). cross-cultural psychology dates to the 1880s. Ac-
Overall, achieving operating synergies has culturation is generally defined as "changes in-
been less than successful (Galbraith & Stiles, duced in (two cultural) systems as a result of the
1984; Kitching, 1967). Problems such as differ- diffusion of cultural elements in both directions"
ences in managerial styles or compensation sys- (Berry, 1980, p. 215). The process occurs at the
tems (Lubatkin, 1983; Scherer, 1980), resistance group and individual levels in the three stages
by the members of both firms to changes in the of contact, conflict, and adaptation (Berry, 1983).
structure (Pitts, 1976), and the differences in the Although acculturation is considered to be a bal-
firms' personnel characteristics and employees' anced two-way flow, members of one culture
willingness to adapt to the culture and practices often attempt to dominate members of the other
of the other company (Jemison & Sitkin, 1986; (Berry, 1980; Keesing, 1953).
Lubatkin, 1983) have been suggested as possible Though the concept of acculturation was de-
obstacles for achieving the desired synergies. veloped to explain events involving societal
Jemison (1986) indicated that research about the groups, it can be applied to industrial or social
implementation of mergers is fragmented and he organizations as well, because the two share
suggested that a process-oriented, long-term many defining characteristics. Both industrial
view is necessary. Shrivastava (1986) focused and social organizations exist and adapt within
particularly on the importance of postmerger in- a specified environment and have well-defined
tegration of the two companies in determining boundaries that encompass a number of indivi-
the success of the merger. He identified three duals who interact and are interdependent to
different levels of integration: (a) procedural, (b) varying degrees (Sales &Mirvis, 1984). They have
physical, and (c) managerial and sociocultural. a functional and adaptive quality and provide
Whereas the first two types of integration have their members with a system of shared symbols
been discussed in the literature, because of the and cognitions to deal with each other and with
complexity of the variables involved, sociocultu- the outside world.
ral and managerial integration has not been ex- However, in organizations, the various systems
amined thoroughly (Shrivastava, 1986). such as structure and technology affect the or-

ganization and its members more directly. Fur- them unique. At the same time, they are willing
thermore, when a societal group is forced to in- to be integrated into the acquirer's structure.
teract with another, the members do not have However, integration can take place only if the
the option of not acculturating and refusing con- acquirer is willing to allow such independence.
tact as readily as organization members do. In Overall, integration leads to some degree of
organizations, members can choose not to ac- change in both groups' cultures and practices;
cept the culture of the other organization by sim- the flow of culturalelements is balanced because
ply leaving the organization, or the accultura- neither group tries to dominate the other.
tion process can be bypassed if most members
of the acquired company are fired. More impor-
tantly, the concept of acculturation as it is used In contrast to integration, assimilation is al-
in cross-cultural research focuses on the desires ways a unilateralprocess in which one group will-
of the members of the culture that is being ingly adopts the identity and culture of the other
invaded; it also focuses on the way in which (Berry,1983, 1984).Therefore,the members of the
these members adapt to the intruder. However, acquired firm willingly relinquish their culture
in mergers, the motive for the merger and the as well as most of their organizational practices
type of merger, both factors associated with the and systems (Sales &MiMs, 1984),and they adopt
acquirer, cannot be overlooked. the culture and systems of the acquirer. Thismay
occur in an acquired firm that has been unsuc-
Modes of Acculturation cessful, one in which employees and managers
perceive that their culture and practices are dys-
functional and hindering organizational perfor-
Berry(1983, 1984)identified fourmodes through
mance. Therefore, following the merger, struc-
which acculturation takes place. These modes
turalas well as culturaland behavioral assimila-
define ways in which two groups adapt to each
tion will occur. Overall, the acquired firmwill be
other and resolve emergent conflict. In the case
absorbed into the acquirer, and it will cease to
of mergers, the characteristics of the acquired
exist as a cultural entity.
and the acquiring companies determine which
mode of acculturation will be triggered. Separation
Integration Separation as a mode of acculturationinvolves
attempting to preserve one's culture and prac-
Integration is triggered when members of the tices by remaining separate and independent
acquired firmwant to preserve their own culture from the dominant group (Berry, 1983).Separa-
and identity and want to remain autonomous tion is likely to take place when members of the
and independent. Berry(1983)suggested that in- acquired organization want to preserve their cul-
tegration as a mode of acculturation leads to ture and organizational systems and they refuse
structural assimilation of two cultures, but little to become assimilated with the acquirer in any
cultural and behavioral assimilation. London way or at any level. These members resist any
(1967)argued that although integration involves attemptat adaptation and conciliation, and they
interactionand adaptation between two cultures try to remain totally separate from the acquirer.
and requires mutual contributions by both If allowed to do so, they will function as a sepa-
groups, it does not involve loss of culturalidentity rate unit under the financial umbrella of the par-
by either. As a result, the acquired company's ent company. Overall, separation means that
employees try to maintain many of the basic there will be minimal culturalexchange between
assumptions, beliefs, cultural elements, and the two groups, and each will function indepen-
organizational practices and systems that make dently.

Deculturation How much do members
of the acquired firm
The fourth mode of acculturation is "decultura- value preservation of
tion" or "marginality." Deculturation involves los- their own culture?
ing cultural and psychological contact with both Very much Not at all
one's group and the other group, and it involves
Very Integration Assimilation
remaining an outcast to both (Sales & Mirvis, Perception attractive
1984). Deculturation occurs when members of the of the
acquired company do not value their own cul- attractiveness
ture and organizational practices and systems, of the acquirer Not at all
and they do not want to be assimilated into the attractive Separation Deculturation
acquiring company. As a result, the acquired Figure 1. Acquired firm's modes of acculturation.
company is likely to disintegrate as a cultural
entity. Berry (1983) suggested that ". . . it is ac- Note: This model is a modified version of one
companied by a great deal of collective and indi-
developed by Berry (1983).
vidual confusion . .. and by feelings of aliena-
tion, loss of identity, and what has been termed
acculturative stress" (p. 69).
ture as measures of attitudes toward accultura-
Factors that Determine the Course
tion. In addition to questions related to attitudes
of Acculturation
toward one's own and the acquirer's culture, ob-
The concept of acculturation presented above servation of organizational events and critical
addresses the different ways through which the incidents can be used to estimate attitudes to-
culture, organizational practices, and systems of ward one's culture and toward the acquirer's
two companies can be combined. It is suggested culture (e.g., Sales & Mirvis, 1984). These meth-
that when two groups come in contact, total ods provide information about how members of
absorption of one into the other is by no means the acquired company would like to acculturate
the only mode of adaptation. The course of accul- to the acquirer.
turation depends on the way in which the acquir- In the case of the acquirer, the culture, particu-
er and the acquired companies approach the larly the degree to which the firm is multicul-
implementation of the merger. From the acquired tural and the diversification strategy regard-
company's point of view, the degree to which ing the type of merger (i.e., degree of related-
members want to preserve their own culture and ness), will determine the preferred mode of ac-
organizational practices and the degree to which culturation (see Figure 2). The term multicul-
they are willing to adopt the acquirer's culture turalism refers to the degree to which an organi-
and practices will determine their preferred mode zation values cultural diversity and is willing to
of acculturation (see Figure 1). tolerate and encourage it. If an organization sim-
The variables in Figure 1 can be measured by ply contains many different cultural groups, it is
asking members of the acquired organization the considered to be a plural organization; if in
extent to which they seek positive relations with addition, the organization values this diversity,
the acquirer and the extent to which they per- it is considered to be multicultural (Sales & Mirvis,
ceive their own culture to be valuable and worth 1984). If an acquirer is unicultural and, therefore,
retaining (for an anthropological example see emphasizes conformity and rewards adherence
Berry, Wintrob, Sindell, & Mawhinney, 1982). to unique goals, strategies, and organizational
Furthermore, cross-cultural psychologists (e.g., practices, it is more likely to impose its own cul-
Sommerlad & Berry, 1970) have used scales in- ture and management systems on a new acquisi-
creasing identification with one or the other cul- tion. If the acquirer is multicultural, it is likely to

Culture: gomery, 1981; Hawks, 1984; Rumelt, 1974, 1982).
Degree of Multiculturalism These measures can be used to assess the de-
Multicultural Unicultural gree of relatedness of the two businesses and to
Related Integration Assimilation provide information regarding the second deter-
Diversifica- minant of acculturation from the point of view of
tion Strategy: the acquirer.
Degree of
Relatedness Acculturative Model for
of Firms
Unrelated Separation Deculturation the Implementation of Mergers
Figure 2. Acquirer's modes of acculturation. The concepts presented in this paper provide
a new approach for increasing our understand-
ing of some of the underlying elements that af-
fect the implementation of mergers. A general
consider diversity an asset and therefore will al- model is introduced in Figure 3. The basic con-
low the acquired firm to retain its own culture tention of the model is that given that the mem-
and practices. bers of the two organizations may not have the
The second variable that determines the course same preferences regarding a mode of accultur-
of acculturation for the acquirer is the diversifica- ation, the degree of agreement (congruence) re-
tion strategy regarding the type of merger-the garding each one's preference for a mode of ac-
degree of relatedness between the acquirer and culturation will be a central factor in the success-
the acquired firms. If the merger is with a firm in ful implementation of the merger.
a related business, the acquirer is more likely to It is proposed that when two organizations
impose some of its culture and practices in an agree on the preferred mode of acculturation for
attempt to achieve operating synergies. On the the implementation of the merger, less accultura-
other hand, an acquirer is less likely to interfere tive stress and organizational resistance will
with the culture or practices of an unrelated result, making acculturation a smoother process.
acquisition (Walter, 1985). Acculturative stress is defined as " . . . individ-
The degree of multiculturalism of an organiza- ual states and behaviors that are mildly patho-
tion can be measured by observing organiza- logical and disruptive. . . " (Berry, 1980, p. 261).
tional events and examining oral and written Such stress and disruption is the result of contact
records of ways in which groups with different with another group (Berry, 1983; Berry & Annis,
cultures have been managed. For example, the 1974). Congruence can take place even if the
way in which a previous acquisition was han- cultures and practices of the two organizations
dled can indicate the culture of an acquirer. If are considerably different.
the members of the acquired organization were Incongruence which occurs when the two or-
forced to change many of their practices and ganizations do not agree on the mode of accul-
everyday behaviors, the acquirer is likely to be turation is likely to lead to high amounts of accul-
unicultural. Overall, the extent of change im- turative stress and disruption for both individual
posed on individuals or groups who are differ- and group functioning. A high degree of accul-
ent from what an organization considers as turative stress would indicate a poor resolution
acceptable provides an index of the degrees of of the conflict that is triggered when the two firms
multiculturalism. come in contact. Measures of acculturative stress
Measures of relatedness have been developed developed for use in cross-cultural studies (e.g.,
and used extensively in strategic management Cawte, Bianchi, & Kiloh, 1968; Mann, 1958) can
research (for a review see Venkatraman & Grant, be adapted for use in organizational research.
1986; for some examples see Christensen & Mont- As a result of incongruence, key managers and
Acquiring Firm
Acquired Firm
Culture: tolerance
Dresirve diversity and
preserve multiculturalism
own culture
Attractiveness Strategy: degree
Afttractiveness of relatedness
of the acquirer of the firms

Mode of Acculturation Mode of Acculturation

Integration Integration
Assimilation Assimilation
Separation Separation
Deculturation Deculturation


Acculturative Stress an

Successful Implementation
of the Merger

Figure 3. Acculturative model for the implementation of mergers.

other valued employees may leave, active resis- been to focus on the acquirer and its objectives
tance to adopting any of the acquirer's systems and strategies at the expense of the role of the
may occur, and overall, the conflict will not be acquired company. The typical approach to
resolved in a way that would be beneficial to merger implementation has been to expect the
either of the organizations involved. On the other acquired firm either to adjust or to adapt to the
hand, congruence will result in minimal accul- acquirer. However, the active resistance that of-
turative stress, and it will help to facilitate the ten accompanies mergers is evidence that the
implementation of the merger. desires and preferences of the members of the
The last feature of the model presented in Fig- acquired firm cannot be ignored (Walter, 1985).
ure 3 is its dynamic nature. The model suggests The concepts of acculturation and congruence
that the mode of acculturation that occurs, the suggest that many of the problems associated
process of implementation, and the outcome of with postmerger integration of two firms can be
the merger will, in turn, affect the cultures and avoided or managed if they agree on the mode
practices of the two organizations. For example, of acculturation.
an acquired firm's members' desire to preserve Furthermore, given that organizations typically
their culture and practices may change as a re- encompass several different subcultures, one or
sult of contact with a very successful and attrac- more of the modes of acculturation may be trig-
tive acquirer. On the other hand, the degree of gered simultaneously. As a result, acculturation
multiculturalism of an acquiring firm may change may take different courses for various subgroups
as a result of the outcome of various mergers. within the acquired organization, and different
The dynamic nature of the model suggests that degrees of congruence are likely to result for each
over time two merger partners may each move subculture. This possibility suggests that the var-
from one mode of acculturation to other modes ious subcultures must be understood by the
and, therefore, the degree of congruence be- acquirer, and that each may need to be man-
tween each one's preferences may change. aged differently.
Propositions concerning the role of accultura-
tion in the implementation of mergers are pre-
Fit Between Strategy and Culture
sented in Table 1. The model presented in this paper also ques-
tions one frequent recommendation related to
Discussion and Implications strategic management. As mentioned earlier,
The existing failure rate of mergers suggests much of the research about the concept of relat-
that neither academicians nor practitioners have edness has found that related companies tend to
a thorough understanding of the variables in- outperform unrelated ones. Such results have
volved in planning and implementing a success- given way to broad strategic recommendations
ful merger. Aside from the financial and opera- for companies to diversify into related businesses
tional considerations, the model presented here so that they can take advantage of operating
draws attention to the concept of cultural adapta- synergies. However, the success of some unre-
tion both during and after a merger. It is sug- lated acquisitions (Montgomery & Wilson, 1986)
gested that a successful merger involves not only shows that stringently adhering to this recommen-
thorough financial and strategic analysis and dation may deprive companies of opportunities.
planning, but also planning regarding congru- Missing from the research is precise information
ence between the two companies' preferences regarding the reasons why related or unrelated
about the implementation strategy for the merger. acquisitions succeed. No empirical data are
available regarding the way in which success-
Role of the Acquired Company ful and unsuccessful acquisitions have been
One of the shortcomings of much of the previ- managed. Focus has been on the link between
ous research about merger effectiveiress has diversification strategjy (e. ci., relatedness) and
Table 1
Propositions Concerning the Role of Acculturationin Mergers
Preferredmode of acculturationfor the acquired company:
1. When members of an acquired organizationvalue their 3. When members of an acquired organizationvalue their
cultureand organizational practices and want to pre- cultureand practices and want to preserve them, and
serve them, and they perceive an acquirer as attrac- they do not perceive an acquireras attractive,separa-
tive, integration will be their preferred mode of tion will be their preferred mode of acculturation.
4. When members of the acquired organization do not
2. When members of an acquired organization do not value their culture and practices and do not want to
value their culture and practices and do not want to preserve them, and they do not perceive an acquirer
preserve them, and they perceive an acquirer as at- as attractive, deculturation will be their preferred
tractive, assimilation will be their preferred mode of mode of acculturation.

Preferredmode of acculturationfor the acquirer:

1. When an acquirer is multiculturaland the merger is 3. When an acquirer is multiculturaland the merger is
with a related company, integration will be the most with an unrelated company, separation will be the
likely mode of acculturation. most likely mode of acculturation.
2. When an acquirer is uniculturaland the merger is with 4. When an acquirer is uniculturaland the merger is with
a related company, assimilationwill be the most likely an unrelated company, deculturationwill be the most
mode of acculturation. likely mode of acculturation.

Congruence and successful implementation:

1. If there is congruence between the two companies re- 2. If there is incongruence between the two companies
garding the preferredmode of acculturation,minimal regarding the preferredmode of acculturation,a high
acculturativestress will resultand the mode of accul- degree of acculturativestress will resultand the mode
turation triggered by the contact between the two of acculturationtriggered by the contact between the
companies will facilitate the implementation of the two companies will hinder the implementationof the
merger. merger.

outcome (e.g., financial performance); the pro- Focus on Process

cess has been ignored.
The acculturative model of merger implemen- Many researchers agree that the main objec-
tation provides hypotheses regarding how merg- tive of any merger is to improve the performance
ers with firms with varying degrees of related- of the combined companies (Lubatkin, 1983).
ness can be successful. For example, an unre- Often, the measures that are used to evaluate
lated acquisition can be managed successfully if merger performance rely on financial data and
the acquired business is left separate (separation focus on the profitability of the organizations
mode) according to its employees' desires. This (Kusewitt, 1985; Chatterjee, 1986). This financial
mode corresponds to the original goal of an unre- approach to effectiveness takes a general, one-
lated merger, which is to achieve financial rather shot, outcome-oriented view of mergers. In light
than operating or managerial synergy. The con- of criticisms of such a view (e.g., Jemison, 1986;
cept of congruence and the issue of fit between Jemison & Sitkin, 1986; Montgomery & Wilson,
strategy and culture for the acquirer can explain 1986), the need to develop process-oriented mod-
some of the performance differences in related els of postmerger integration is evident (Shrivas-
and unrelated mergers. tava, 1986). The model presented here encour-

ages focusing on the dynamic processes by Aside from methodological and theoretical
which the acquired and the acquiring firms re- developments, the concepts of acculturation and
solve the conflict that arises as a result of their congruence suggest interesting research and
contact. It draws attention to the meshing of practical issues. For instance, given that incon-
people, cultures, and organizational practices gruence between the preferred modes of accul-
as a determinant of a successful merger. turation for the acquired and the acquiring com-
panies is likely to take place, are some mis-
Future Research matches of modes easier to manage than others?
Research concerning this model should take Would incongruence be more manageable if the
two approaches. First, the propositions should acquirer prefers integration and if the acquired
be tested; this also would involve further devel- wants to be assimilated, rather than the former
opment and adaptation of existing measures. preferring assimilation and the latter integration?
Second, because the model identifies only three Furthermore, some mismatches of the preferred
major variables more theoretical exploration is modes may be so incongruent that the move-
required. Other organizational elements and sys- ment toward congruence may be painstakingly
tems, such as structure, leadership, managerial slow, or impossible. Clarifying the above issues
style, and control systems may have an impact and their determinant factors may help to plan
on the choice of the preferred acculturation mode and manage the acculturation process in mer-
and the course of acculturation. gers.

Ackerman, L. D. (1984)The psychology of corporation:How among the JamesBay Cree. Le NaturalisteCanadien, 109,
identityinfluences business. Journalof Business Strategy, 965-975.
5(1), 56-65. Blake, R. R., & Mouton,T. S. (1984)Solving costly organiza-
Ansoff, H. I. (1965)Corporatestrategy. New York:McGraw- tionalconflicts:Achieving intergrouptrust,cooperationand
Hill. teamwork. San Francisco: Jossey-Bass.
Barrett,P. F. (1973)The human implications of mergers and Cawte, J., Bianchi. G. N., & Kiloh, L. G. (1968)Personal
take-overs. London:Instituteof Personnel Management. discomfortin Australian aborigines. Australian New Zea-
Bhagat, R. S., & McQuaid, S. J. (1982)Role of subjective land Journalof Psychiatry, 2, 69-79.
culture in organizations: A review and directions for fu- Chance, N. A. (1965)Acculturation, self-identification,and
ture research. Journalof Applied Psychology Monograph, personality adjustment. American Anthropologist, 67,
67, 653-685. 372-393.
Berry, J. W. (1980) Social and cultural change. In H. C. Chatterjee, S. (1986)Types of synergy and economic value:
Triandis&R. W. Brislin(Eds.),Handbookof cross-cultural The impact of acquisitions on merging and rival firms.
psychology (Vol. 5, pp. 211-279). Boston:Allyn & Bacon. Strategic Management Journal, 7, 119-140.
Berry, J. W. (1983)Acculturation:A comparative analysis of Christensen, H., & Montgomery,C. A. (1981)Corporateeco-
altemative forms. In R. J. Samuda & S. L. Woods (Eds.), nomic performance: Diversificationstrategy versus mar-
Perspectives in immigrant and minority education (pp. ket structure.Strategic Management Journal, 2, 327-343.
66-77). Lanham, MD:UniversityPress of America.
Davis, S. M. (1984)Managing corporateculture. Cambridge,
Berry,J.W. (1984)Culturalrelations in plural societies: Alter- MA:Ballinger.
natives to segregation and their sociopsychological impli-
cations. In N. Miller & M. B. Brewer (Eds.), Groups in Deal, T. E., & Kennedy, A. A. (1982) Corporate cultures.
contact (pp. 11-27). Orlando, FL:Academic Press. Reading, MA:Addison-Wesley.
Berry, J. W., & Annis, R. C. (1974)Acculturative stress: The Galbraith,C. S., & Stiles, C. H. (1984)Mergerstrategies as a
role of ecology, cultureand differentiation.Journalof Cross- response to bilateral marketpower. Academy of Manage-
CulturalPsychology, 5, 382-406. ment Journal, 27, 511-524.
Berry, J. W., Wintrob,R. M., Sindell, P. S., & Mawhinney, Hawks, E. T. (1984, October) Strategic diversification and
T. A. (1982)Psychological adaptation to culture change economic performance: An empirical examination of

security-marketdeterminedmeasures of performance. Pa- Roberts,K. H. (1970)On looking at an elephant: An evalua-
per presented at the meeting of the Strategic Manage- tion of cross-cultural research related to organizations.
ment Society, Philadelphia. Psychological Bulletin, 74, 327-350.
Hayes, R. H. (1979)The human side of acquisitions. Manage- Rumelt, R. (1974)Strategy, structure, and economic perfor-
ment Review, 68(11),41-46. mance. Cambridge, MA:Harvard UniversityPress.
Jelinek,M., Smircich, L., & Hirsch, P. (1983)Introduction:A Rumelt, R. (1982)Diversification strategy and profitability.
code of many colors. Administrative Science Quarterly, Strategic Management Journal, 3, 359-369.
28, 331-338. Sales, A. L., & Mirvis, P. H. (1984)When cultures collide:
Jemison,D. B. (1986)Strategic capability transferin acquisi- Issues of acquisition.In J.R. Kimberly&R. E. Quinn (Eds.),
tionintegration. (WorkingPaper No. 913).StanfordUniver- Managing organizational transition(pp. 107-133).Home-
sity, Graduate School of Business. wood, IL:Irwin.
Jemison, D. B., & Sitkin, K. (1986)Corporate acquisitions:A Salter,M. S., &Weinhold,W. A. (1979)Diversificationthrough
process perspective. Academy of Management Review, acquisition. New York:Free Press.
11, 145-163. Sathe, V. (1985) Culture and related corporate realities.
Homewood, IL:Irwin.
Keesing, F. (1953)Culturalchange: An analysis and bibliog-
raphy of anthropological sources to 1952. Stanford, CA: Schein, E. H. (1984)Coming to a new awareness of organiza-
StanfordUniversityPress. tional culture. Sloan Management Review, 25(2),3-16.
Kitching,J. (1967)Why do mergers miscarry?HarvardBusi- Schein, E. H. (1985)Organizational culture and leadership.
ness Review, 45(6),84-101. San Francisco: Jossey-Bass.
Kusewitt, J. B., Jr. (1985)An exploratory study of strategic Scherer, F. M. (1980)Industrial market structure and eco-
acquisitionfactorsrelating to performance.StrategicMan- nomic performance. Chicago: Rand McNally.
agement Journal, 6, 151-170. Schwartz, H., & Davis, S. M. (1981)Matching corporatecul-
London, H. (1967) Liberalising the white Australia policy: ture and business strategy. Organizational Dynamics,
Integration,assimilation or cultural pluralism?Australian 10(1),30-48.
Outlook, 21, 38-346. Shrivastava, P. (1985)Integrating strategy formulationwith
Lubatkin,M. (1983)Merger and the performance of the ac- organizational culture. Journalof Business Strategy, 5(3),
quiringfirm.Academy of Management Review, 8, 218-225. 103-111.

Lubatkin,M. (1987)Merger strategies and stockholdervalue. Shrivastava,P. (1986)Postmergerintegration.Journalof Busi-

Strategic Management Journal, 8, 39-53. ness Strategy, 7(1), 65-76.
Smircich, L. (1983)Concepts of culture and organizational
Mann, J. W. (1958)Group relations and the marginal man. analysis. AdministrativeScience Quarterly, 28, 339-358.
Human Relations, 11, 77-92.
Social Science Research Council (U.S.). (1954)Acculturation:
Marks, M. L. (1982)Merging human resources: A review of An exploratoryformulation.American Anthropologist,56,
current research. Mergers and Acquisitions, 17(2),38-44. 973-1002.
Montgomery,C. A., &Wilson, V. A. (1986)Mergers that last: Sommerlad, E., &Berry,J.W. (1970)The role of ethnic identi-
A predictable pattern?Strategic Management Journal, 7, ficationin distinguishingbetween attitudestowardsassimi-
91-96. lation and integration of a minorityracial group. Human
Peters, T. J., & Waterman, R. H., Jr. (1982) In search of Relations, 23, 23-29.
excellence: Lessons from America's best-run companies. Steiner, P. 0. (1975)Mergers:Motives, effects, policies. Ann
New York:Harper & Row. Arbor, MI:Universityof Michigan Press.
Pettigrew, A. M. (1979)On studying organizational cultures. Sutton, R. I. (1983)Managing organizational death. Human
AdministrativeScience Quarterly, 24, 570-581. Resource Management, 22, 391-412.
Pitts,R. A. (1976)Diversificationstrategiesand organizational Tagiuri, R., & Litwin, G. H. (1968)Organizational climate:
policies of large diversified firms. Journal of Economics Exploration of a concept. Boston: Harvard University,
and Business, 28, 181-188. Graduate School of Business.
Redfield, R., Linton, R., & Herkowitz,M. J. (1936)Memoran- Tichy, N. M. (1982) Managing change strategically: The
dum on the study of acculturation.American Anthropolo- technical, political, and culturalkeys. OrganizationalDy-
gist, 38, 149-152. namics, 11(2),59-80.

Van Maanen, J. (1979)The self, the situation, and the rules of Walter,G. M. (1985)Culturecollision in mergers and acquisi-
interpersonalrelations. In W. Bennis (Ed.),Essays in inter- tions. In P. J. Frost, L. F. Moore, M. R. Louis, C. C.
personal dynamics (pp. 41-101). Homewood, IL:Dorsey Lundberg, & J. Martin(Eds.), Organizational culture (pp.
Press. 301-314).Beverly Hills, CA: Sage.
Venkatraman,N., & Grant, J. H. (1986)Constructmeasure- Wrigley, L. (1970)Divisional autonomy and diversification.
ment in organizational strategy research: A critique and Unpublished doctoral dissertation, Harvard University,
proposal. Academy of Management Review, 11, 71-87. Graduate School of Business.

Afsaneh Nahavandi (Ph.D., Universityof Utah)is Visit-

ing AssistantProfessorof Managementat ArizonaState
UniversityWest Campus. Correspondence regarding
this article can be sent to her at: Arizona State
University West Campus, Department of Manage-
ment, 2636 West Montebello Avenue, Phoenix, AZ
Ali R. Malekzadeh (Ph.D., Universityof Utah)is Assis-
tant Professor of Management at Arizona State Uni-
versity West Campus, Phoenix, AZ.
The authors are grateful to Rae Andre, Brendan
Bannister, Joseph Garcia, and Tiff Hawks for their
helpful comments and-suggestions. Earlier versions
of this paper were published in the Best Paper Pro-
ceedings of the Academy of Management in 1986and
The research for this paper was conducted while the
authors were at NortheasternUniversity.