Corporate lifestyle is the way an firm sights by itself, or its composed and unwritten insurance policies and processes. Gurus urge that in buy to get a excellent organizational fit, a person need to appear at its possess corporate lifestyle and try out to get related firms. One matter that can tear a merger aside is the mindset of “us versus them”. This mindset is the reason of failure for most of the mergers. It is thought that if lifestyle is the difficulty in a merger, it can have overwhelming effects on the newly shaped organization.

In accordance to Paul Temple Organizational fit is “the match between administrative techniques, cultural techniques and personnel attributes of the concentrate on and acquirer. It influences the simplicity with which two organizations can be integrated all through implementation”. It is thought that the main reason for the failure of mergers and acquisitions is the clash between corporate cultures.

There have been more than a couple acquisitions which did not occur up to the mark due to the conflict of corporate lifestyle of the companies associated. For instance, in the 12 months 1994, Quaker Oats procured Snapple Beverage Co. for a whole price of $1.7 billion but the Snapple business was marketed off after a time period of a few several years for a loss of $1.four billion. The principal reason of this failure was the conflict between the corporate cultures. Quaker experienced an incredibly targeted, mass-current market functioning method and on the other hand Snapple’s design and style was eccentric, professional and tilted in the direction of its distributors.

One more illustration of the failure of merger due to issues with cultural integration can be witnessed in the circumstance of Daimler-Chrysler. The merger of Daimler-Benz and Chrysler grew to become a straight out clash between the business cultures of the two companies. The differentiation in corporate lifestyle of the companies associated was the principal reason for the non results of this alliance. When the administration design and style of Daimler-Benz’s was more of a official and planned out type, Chrysler’s administration was more tilted in the direction of a tension-free, unrestrictive design and style. Moreover, the sights of the two the companies on vital factors, for instance pay out scales, benefits and journey expenditure, were fully distinctive from every other. As a final result the firm’s shareholders experienced to bear the load of the collision.

By Rachel Hewlett