CULTURAL DIFFERENCES AND SHAREHOLDER VALUE IN RELATED MERGERS: LINKING EQUITY AND HUMAN CAPITAL

Merger literature suggests that the relationship between shareholder gains and the relatedness of merging firms is contingent upon the compatibility of the two firms' top management cultures. This hypothesis is tested by surveying the perceptions of cultural differences of top management teams of recently acquired firms, and then relating these perceptions to related stock market gains to the buying firms. The findings suggest a strong inverse relationship between perceptions of cultural differences and shareholder gains, after controlling for perceptions of the buying firm's tolerance for multiculturalism and the relative size of the merging firms.

[1]  Joseph F. Kubis,et al.  An Analysis of Attitudes Toward a Planned Merger , 1963 .

[2]  Albert E. Beaton,et al.  Prediction of organizational behavior , 1972 .

[3]  R. Guion.  A note on organizational climate , 1973 .

[4]  Lawrence R. James,et al.  Organizational climate: A review of theory and research. , 1974 .

[5]  John W. Berry,et al.  Acculturative Stress , 1974 .

[6]  J. Slocum,et al.  Organizational Climate: Measures, Research and Contingencies , 1974 .

[7]  Bruce Buchanan.  BUILDING ORGANIZATIONAL COMMITMENT: THE SOCIALIZATION OF MANAGERS IN WORK ORGANIZATIONS , 1974 .

[8]  B. Schneider.  Organizational Climates: An Essay. , 1975 .

[9]  Dennis E. Logue,et al.  Foundations of Finance. , 1977 .

[10]  G. Gordon.  Managing management climate , 1979 .

[11]  John J. Clark,et al.  Merger Types and Shareholder Returns: Additional Evidence , 1980 .

[12]  S. Davis,et al.  Matching corporate culture and business strategy , 1981 .

[13]  Desmond Graves,et al.  INDIVIDUAL REACTIONS TO A MERGER OF TWO SMALL FIRMS OF BROKERS IN THE RE-INSURANCE INDUSTRY: A TOTAL POPULATION SURVEY , 1981 .

[14]  Peter R. Richardson,et al.  Implementing the unrelated product strategy , 1982 .

[15]  R. Bhagat,et al.  Role of subjective culture in organizations: A review and directions for future research. , 1982 .

[16]  Raymond-Alain Thiétart,et al.  Strategy, management design and firm performance , 1982 .

[17]  Jack R. Borsting,et al.  Decision-Making at the Top , 1982 .

[18]  Richard S. Ruback,et al.  The Market for Corporate Control: The Scientific Evidence , 2002 .

[19]  Michael C. Jensen,et al.  The market for corporate control , 1983 .

[20]  David Cray,et al.  Decision making in multinational corporations , 1983 .

[21]  M. Lubatkin.  Mergers and the Performance of the Acquiring Firm. , 1983 .

[22]  J. M. Beyer,et al.  Studying Organizational Cultures Through Rites and Ceremonials , 1984 .

[23]  David Cray,et al.  Control and Coordination in Multinational Corporations , 1984 .

[24]  The influence of business strategy and environmental uncertainty on the effectiveness of top management styles , 1985 .

[25]  E. Schein.  Organizational Culture and Leadership: A Dynamic View , 1985 .

[26]  J. B. Kusewitt.  An exploratory study of strategic acquisition factors relating to performance , 1985 .

[27]  Jerold B. Warner,et al.  Using daily stock returns: The case of event studies , 1985 .

[28]  James L. Bowditch,et al.  When Cultures Collide: The Anatomy of a Merger , 1985 .

[29]  S. Sitkin,et al.  Corporate Acquisitions: A Process Perspective , 1986 .

[30]  J. Lorsch.  Managing Culture: The Invisible Barrier to Strategic Change , 1986 .

[31]  R. E. Shrieves,et al.  Towards Reconciliation of Market Performance Measures to Strategic Management Research , 1986 .

[32]  Sayan Chatterjee,et al.  Types of Synergy and Economic Value: The Impact of Acquisitions on Merging and Rival Firms , 1986 .

[33]  Michael Lubatkin,et al.  Merger strategies and stockholder value , 1987 .

[34]  Cynthia A. Montgomery,et al.  Corporate acquisition strategies and economic performance , 1987 .

[35]  D. Slevin,et al.  THE INFLUENCE OF ORGANIZATION STRUCTURE ON THE UTILITY OF AN ENTREPRENEURIAL TOP MANAGEMENT STYLE , 1988 .

[36]  Y. Wiener,et al.  Forms of Value Systems: Focus on Organizational Effectiveness and Cultural Change and Maintenance , 1988 .

[37]  Ali R. Malekzadeh,et al.  Acculturation in Mergers and Acquisitions , 1988 .

[38]  J. Walsh.  Top management turnover following mergers and acquisitions , 1988 .

[39]  Jacob Weber,et al.  The effects of top management culture clash on the implementation of mergers and acquisitions , 1988 .

[40]  James P. Walsh,et al.  Doing a deal: Merger and acquisition negotiations and their impact upon target company top management turnover , 1989 .

[41]  A. Buono.  The human side of mergers and acquisitions , 1989 .

[42]  Nancy K. Napier,et al.  Mergers and Acquisitions, Human Resource Issues and Outcomes: A Review and Suggested Typology* , 1989 .

[43]  The acquisition and integration of Zanussi by Electrolux : A case study☆ , 1990 .

[44]  D. Denison,et al.  Corporate Culture and Organizational Effectiveness. , 1991 .

[45]  James P. Walsh,et al.  Mergers, acquisitions, and the pruning of managerial deadwood , 1991 .

[46]  E. Schein.  Organisational culture and leadership , 1991 .

[47]  P. Rosenzweig.  Managing Acquisitions: Creating Value Through Corporate Renewal , 1991 .