Does Corporate Culture Affect Mergers And Acquisitions?

With the penetration of globalization,companies from different countries have to confront a changeable marketing environment and a new marketing structure.In order to take up a successful position in this international financing wave,many companies have taken measures,for example enlarging production scale,promoting competitive advantage,expanding transaction area etc.to enhance their competitive strength and strategic position.In all those measures,merger and acquisition are the favorable strategic way for many companies.A new wave of merger and acquisition,therefore,is spreading around the world.China Vanke event in the summer of 2017 helps people realize that domestic merger and acquisition market is not quiet and peaceful.On the contrary,with a nervous and intense atmosphere,domestic merger and acquisition market has been very active these years.However,the raging merger and acquisition events mostly end up with failure.,which can be found out with a lot of reasons.One important reason is usually neglected by company management.That is the building of corporate culture.Managers of the corporation lack of systematic knowledge and concentration for the structure of corporate culture system.They also fail to realize the cultural difference between both companies of merger and acquisition.These elements eventually lead to the failure of merger and acquisition.Based on the background,this article will analyze the relationship between cultural discrepancy and results of merger and acquisition.From the existing documents and researches,it can be found out that about the relationship between corporate culture and merger and acquisition,most of the scholars only focus on the relationship between corporate culture and performance and efficiency of merger and acquisition or the impact of cultural integration on performance and efficiency after merger and acquisition.Only a few scholars concentrate on the influence of corporate culture on the result of merger and acquisition.There are short of researches that analyze the problems of the results of corporation merger and acquisition from the dimension of corporate culture.The article,therefore,will reflect the corporate culture strength of company merger and acquisition from three factors,strategic culture of company operation,culture of company values and culture of company management to illustrate its impact on the results of merger and acquisition.Through the empirical examination of merger and acquisition of the listed company in China A share market between 2012 and 2016,three relations may be found.If the corporate culture of an acquisition company becomes stronger,it is more likely to have a successful merger and acquisition.The larger the difference between merger and acquisition corporations and the strategically cultural factors of a targeted company is,the less likely they will have a successful merger and acquisition.The more creditable corporations become(lower scores they have),the more likely they will have a successful merger and acquisition.Except the empirical examination,for the cases of financial mergers and acquisitions that were not involved in the sample,this paper also selected China PingAn Bank M&A event as a research sample to carry out further research.A purpose of the the case studies is to specifically analyze the effect of the corporate culture and the cultural discrepancy of merger and acquisition companies on the development and outcome of merger and acquisition.It can make up the data of targeted companies that is difficult to collect and measure in data research.The researching results of the paper prove that both corporate culture and cultural difference play critical roles in the outcome of merger and acquisition.This provides new analyzing points and data supports to study merger and acquisition result.It also fills up the academic gap of the research in corporation culture and merger and acquisition.