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Cultural Due Diligence. Successfully connecting cultures

Running a ‘Cultural Due Diligence‘ in a merger process aims at recognizing the risk factors from cultural difference early in the process. It involves the development of measures which guard against cultural conflict and foster the cultural post merger integration.

Identification and management of cultural challenges in M&A processes

Successfully connecting cultures
Successfully connecting cultures

In a merger or acquisition, not only different corporate cultures collide, but very often also different national cultures. Caring for a targeted cultural Integration management which starts early in the process can help to start a productive collaboration of the cultures involved – and to prevent conflicts and proactively make use of potential synergies.

Mergers and acquisitions like in the case of Daimler+Chrysler, Vodafone+Mannesmann, or Sanofi+Aventis have shown that managing cultural differences can be crucial. If the management neighter cares for a systematic analysis of the national cultures nor the corporate cultures involved and does not take corresponding integration measures, the merger might fail to live up to expectations and might actually develop into a failure or undesired acquisition.

A Cultural Due Diligence process aims at identifying the relevant cultural differences of the companies involved by a merger. The goal is to get a clear picture of the intercultural challenges of the merger. Up to date, CDD processes are usually not (yet) used in preparing the decision for a merger. Instead, CDD helps to prepare for and manage the post-integration process.

In the course of a Cultural Due Diligence process we use different analytical tools to identify the cultural factors that are crucial for the connection of the corporate and national cultures involved. The results of this step help us to define the cultural conflict potential distinctive for the merger and to develop strategies for preventing conflict and assuring productive collaboration. Depending on the industry, company size and context propose to use different combinations of instruments and to involve different groups of management and staff.

If a professional CDD process is run temporarily and based on a solid methodology the management can prevent typical sorts of intercultural conflicts and misunderstandings and much more specifically make use of the synergy potential involved.