How important is the national culture of the participants, compared to other factors, in affecting the success or failure of a merger or acquisition?

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Q: How important is the national culture of the participants, compared to other factors, in affecting the success or failure of a merger or acquisition?

Introduction

The key to the success of a Merger and Acquisition (M&A) is the national culture of the participants. Aguilera and Dencker (2004: 1360) stated that 'Firms that engage in cross-border Mergers and Acquisitions need to be aware of the possible consequences of national cultural differences.'

'People' is an issue that determines the success or failure in cooperation. 'Culture is the core value' (Cartwright, 1996: 6) and it is the presence of behavior among people. When Mergers and Acquisitions come to an international level, national culture of the participants become a major factor compare to all others. Cartwright stated that 'Many Organisations have also come to recognize that a compatible and successful organisational combination depends upon characteristics of the partner, which extend beyond the suitability of the strategic match. When Mergers and Acquisitions are performed at an international level, then the dynamics are complicated by differences in national cultures'.

This assignment will discuss the measurement of success or failure of Mergers and Acquisitions and which factors affect the result