MIT Sloan Management Review Article on How Political Ideology Can Impact the Success of M&As

As companies look to reframe their future in the post-pandemic era, many are seeking to consolidate in the form of mergers and acquisitions. EY research on the outlook for global M&A trends shows that, since July 2020, there has been a strong rebound in global M&A value, with this trend set to continue in 2021, as the strong snap up the weak in sectors as varied as tech and consumer retail.

While M&A deals may be an appealing option in the new normal, they are also notoriously hard to pull off. Naturally, incompatibility in organizational culture can be a stumbling block for merging companies. Cultural differences may contribute to misunderstandings between the involved workforces, leading to us-versus-them conflicts and eventually attrition. Real-life examples of culture clashes in M&As abound, from this classic case study on the merger between two savings banks to the more recent case of Amazon and Whole Foods, where problems stemmed from a lack of negotiation on organizational culture from the start.

About the Author

Dawn Chow is research assistant professor at the OUHK/Hong Kong Metropolitan University, consulting editor for the Journal of Occupational and Organizational Psychology, editorial board member for the Academy of Management Review, and a CBOS Thinklist thinker.

Christodoulos Louca is associate professor in finance at the Cyprus University of Technology.

Andreas P. Petrou is professor of strategy at the Cyprus University of Technology.

Andreas Procopiou is lecturer in strategic management at the University of Liverpool Management School.

Learn more about MIT SMR.