Yesterday I wrote again about how changing a culture can save a company and I’ve highlighted dozens of similar stories discussing how culture underlies company success or failure over the last 18 months.

Culture is also one of the biggest causes of failed mergers, think Daimler and Chrysler.

A CNN Money.com article notes, “Some companies do it well. Johnson & Johnson and Cisco Systems in the 1990s cautiously evaluated target companies’ cultures and walked away from deals that made sense technologically, financially and strategically, but not culturally. “That’s smart, but rare,” according to Glenn Carroll, a Stanford Graduate School of Business organizations professor.”

Turnaround manager Martin Wobornik says, “…to treat these soft issues as seriously as you would a merger’s hard aspects, which include integrating accounting, human resource and supply chain systems. People are your most valuable assets. You can only make them stay (so long) with financial incentives. If they’re unhappy they’ll leave.”

The only difference between the incompatibility of cultures in a merger and the incompatibility of a candidate and a company’s culture is money.

Executives make money when mergers happen, whereas they lose money on culturally incompatible hires.

This entry was posted on Wednesday, August 29th, 2007 at 2:20 pm and is filed under Business info, Culture, Hiring, Retention. You can follow any responses to this entry through the RSS 2.0 feed.
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