The role of culture compatibility in successful organizational marriage

Abstract

Executive Overview Despite the initial optimism, many organizational marriages prove to be financially disappointing. Given the consistently high rate of merger and acquisition failure, the selection of a suitable organizational bedfellow is a major financial decision. Selection decisions are generally driven by financial and strategic considerations, yet many organizational alliances fail to meet expectations because the cultures of the partners are incompatible. Based on recent research, this article examines the role of culture compatibility in determining venture outcomes. It focuses on the complex interaction between the existing type of premarital culture of the partners and the terms and interpretation of the type of marriage contract the parties believed they had entered.