Mergers and acquisitions are powerful moves for a company to make. Your business can leverage its success and strong revenue to make great leaps forward by expanding via the acquisition of another entity.
While an acquisition certainly serves to bring many resources under your company’s umbrella in one fell swoop, it is not always the best decision to acquire or merge with a business based solely on the value of the deal. It is just as necessary, if not more so, to consider how compatible the two entities are in regard to company culture.
Compatibility matters in the business setting
Cultural incompatibility can be the result of a major falling out between merged companies, even when both sides have a strong, lucrative and reputable brand to bring to the table. The business you intend to acquire might operate under very different priorities than your own. When goals and leadership styles between two sides are a mismatch, the businesses involved in an acquisition become less than the sum of their parts.
Culture can change and improve through diverse ideals
Differing cultural ideals do not always result in mismatched operations. Diversity in leadership beliefs and business philosophies can provide opportunities to develop a new culture that capitalizes on what each side is able to provide. It is important to recognize such opportunities when considering an acquisition.
Differences in company culture can either be a hindrance or a boon when approaching a merger or acquisition. Acknowledging company culture is key to discerning whether an investment will be productive or wasteful.