The document discusses the high failure rates of mergers and acquisitions, attributable to cultural clashes between merging organizations. It outlines the stages of culture clash, the importance of understanding and integrating organizational cultures, and the need for cultural and strategic alignment for successful integration. The Denison Organizational Culture Model is referenced as a framework to assess culture and its impact on merger outcomes.

1. M&A Culture Clashes: Diagnosing and Dealing with themPhilip H. MirvisFortune magazine “merger maven”with Mitchell Marks @DenisonCulture.com

2. M&A Culture Clashes: Diagnosing and Dealing with themPhilip H. MirvisFortune magazine “merger maven”with Mitchell Marks @DenisonCulture.com

4. Merger hit rate65-85 % of Mergers and Acquisitions FailVs. precombination earnings of 2 cos.Vs. promised returns by executivesVs. costs of capital WHY?

5. Combination Phases

6. Define the End Stateacquired

7. Company AEngineering & MarketingQualityMatrixPlanningProfessionalCollegialTeamworkOur WayCompany BR&DSpeedFunctionalReady, Fire, AimEntrepreneurialPoliticalStar SystemMy WayTheoretic SynergiesLeading Edge TechnologyBroader User BaseFaster Time to MarketProduct ReliabilityTechnology Transfer

10. ThinkOrganization & Culture

11. How and where to Integrate?

12. Degree of Integration

13. What’s happening in this picture?Company ACompany B

14. Physical Signs and Public BehaviorsNorms and Values Private BehaviorsBeliefs on ‘Human Nature and Reality’“Layers” of Culture

15. Culture Clash: StagesPerceive DifferencesMagnify DifferencesStereotypeDenigrateSame or Different?Very Different!They are all that wayWe are good; they are not.

16. PerceiveDifferencesEconomic ConsultingBusiness Consulting

17. Magnify DifferencesStereotype

18. We vs. They

19. Win vs. Lose

20. Diligent Due DiligenceSynergies: Strategic and Financial “Fit” Organizational and Cultural FitComplementary organization structures/systemsDepth of management talentUnderstandings of the marketCultural norms and valuesHR relations, stakeholder issuesDo your homework- Internet, reporters, academics, retirees, former employees, etc.Culture Surveys!

21. The Denison Organizational Culture ModelMissionDefining a meaningful long-term direction for the organization“Do we know where we are going?”AdaptabilityTranslating the demands of the business environment into action“Are we listeningto the marketplace?”ConsistencyDefining the valuesand systems that are the basis of a strong culture“Does our system create leverage?”InvolvementBuilding human capability, ownership, and responsibility“Are our people alignedand engaged?“

22. Software AcquisitionOverall strong profileKey areas for leverage: Teamwork, Empowerment, Creating Change, Agreement and Coordination & IntegrationNeed for Strategic Direction & Goal AlignmentIntegrated IT CompanyStronger Internal FocusKey areas for leverage: Teamwork, Empowerment, Core Values, Agreement and Goals & ObjectivesNeed for Strategic Direction, Capability Development & ADAPTABILITY

23. Software AcquisitionIntegrated IT Company

24. Culture & IntegrationHighCombineCarefullyCombineQuicklyCoordinate, CombineSlowlyIntegration:How importantto Strategy? Savings? Synergy?Combine as NeededSeparateLowHardEasyCulture Clash: Ease of Integration?

25. Post merger culturesMulticulturalIntegrated: Distinct but all part of the familyPluralistic: Many tribes, in confederationSegregated: Superiors and inferiorsMonoculturalMelting Pot: One “happy” familyPressure Cooker: One family or elseEthnocide: Kill ‘em off