Understanding Culture Throughout the Stages of M&A and IJV Initiatives


The CB M&A and IJV process is typically divided into three phases: pre-announcement, pre-merger and integration (Aguilera & Dencker, 2004). Considering these phases, a starting point for an international M&A or IJV could be to consider the level of understanding the organization has with the target market, and explore that understanding throughout the initiative. 

If the target market includes unfamiliar cultural norms and business practices, cultural distance is considered to be high. Conversely, if the target market is rich in cultural commonalities and business practices, the organizations can consider cultural familiarity to be high, which indicates a lower level need for early cultural due diligence. With high cultural distance comes the greater need for due diligence and careful integration work between the merging entities.

This due diligence and deliberate integration work is where the Cultural Navigator and TMC’s consultative practice can be of support. By reviewing aggregate cultural preferences at the team, functional and organizational levels, one can gain insights and leverage those insights in order to maximize the endeavor.

Lynne Tarter