The research paper selected and why it was selected
The research paper selected for review is Mergers and acquisitions process: the use of corporate culture analyses by Yaakov Weber and Shlomo Tarba. The paper was selected as it discusses cultural integration challenges encountered by organisations seeking to come together to form mergers or acquisitions.
Based on the rationale that the research by Weber and Tarba (2012) presents, the paper is selected for review. The research paper builds on the current research findings on the importance of creation of organisational cultural harmony in mergers and acquisitions.
Structure of report
The paper begins by discussion of the purpose, rationale, and related literature followed by the methodology adopted by the authors. The research findings are then presented before giving the conclusive remarks.
Summary of purpose, rationale, and related literature
Mergers and acquisitions have a problem of organisational cultural integration. For instance, when the merger between Westpac Corporation and St. George Bank was formed, issues of fear of retrenchments, cultural differences, and survival syndromes emerged.
Considering this example, it is important to develop both theoretical and practical approaches for resolution of these challenges in organisational management literature. The purpose of this paper is to investigate the extent to which Weber and Tarba (2012) fully discuss the challenges of acquisitions and mergers in terms of organisational culture integration and how the proposed solutions measure up to the indentified challenges.
When a merger or acquisition occurs between two organisations, tensions emerge between the different entities due to differing organisational cultures. Employees are the most affected elements of an organisation in the event of a merger. This assertion holds for employees are the active components of an organisation that are directly subject to established organisational cultures.
Human resources play the function of helping in the management of the challenges occurring from differing organisational cultures of the organisations coming together to form a merger.
However, amidst this effort, cultural integration challenges are inevitable. For this reason, it is important to determine both the challenges and solutions to integration of organisational cultures affecting organisations coming together to form a merger or acquisition. This observation underlines the relevance and rationale for reviewing the selected research paper.
Clarity of the research question
In both qualitative and quantitative research, research questions form the basis for communicating the intentions of conducting a specific research. Scientific research contains research question(s) preceding conceptual frameworks since the review of existing research should correspond to the intention of conducting a given research. The clarity of a research question is gauged based on two main important aspects.
The ability to specify the type of research being undertaken constitutes the first aspects, while the second aspect encompasses the capacity to identify particular research objectives. The objective of the Weber and Tarba’s (2012, p.288) research is specified in the purpose statement as ‘advancing cross-cultural management during mergers and acquisitions’. However, the authors only state the purpose of research and then proceed to examine their conceptual framework without providing clear research questions.
A review of literature on the findings on cross-cultural differences in post-mergers or acquisitions over the last twenty years from the time of the research reveals mixed findings.
Relying on the theoretical and empirical research findings on impacts of cross-cultural differences in mergers and acquisitions, Weber and Tarba (2012, p. 288) argue that the findings reflect ‘contradictory and perplexing findings’. From one perspective, the research confirms that impacts of cultural differences between organisations forming mergers or acquisitions produce negative implications in terms of their performance.
However, by quoting the work of different scholars, Weber and Tarba (2012) argue that some literature on effects of cross-cultural differences in mergers and acquisitions may also have positive impacts apart from negative effects to the success of mergers and acquisitions. These findings pose the question on whether to propagate and encourage cross-cultural differences in organisations in the post-merger state.
Weber and Tarba (2012) argue that most executives and managers involved in planning and subsequent execution of mergers only appreciate the roles of cross-cultural differences in affecting the success of a merger or acquisition in the post-merger or acquisition stage.
This assertion is based on in depth search and review of literature on how cross-cultural differences are handled in all stages of formation of mergers and acquisitions. For instance, the authors argue that the involved parties ignore or mishandle cultural differences during the decision-making process.
The authors attribute the above challenges to excessive focusing of scholarly literature on cultural differences in the post-merger state while ignoring its impacts on planning and negotiation phases. They also argue that concepts of culture are not clear to executives; hence, the assessment and implementation phases become problematic.
Therefore, in the conceptual framework, the authors examine literature that builds on the importance and how culture measurement and assessments are accomplished after defining organisational culture in the context of mergers and acquisitions and discussing the various perspectives of culture in an organisation.
Research methodology and design
Description and evaluation of methodology
This research did not deploy primary data collection methods. Consequently, there is no specific research site or context. However, the case studies deployed coupled with empirical and theoretical literature is confined to studies of successful and failed mergers and acquisitions.
Methods of data collection
The maim method of data collection used was conducting scrutiny of secondary data drawn from empirical and theoretical research on the processes of mergers and acquisitions formation. The main concern was particularly on studies incorporating perspectives of cross-cultural culture and its impacts on the success and failure of mergers.
Case studies were incorporated to avail data on practical scenarios on the implication of cultural differences on success of mergers and acquisitions. The evaluation of the appropriateness of the chosen research methodology depends on various considerations for quality qualitative research.
The methodology for qualitative research deployed in a research should have some specific characteristics. According to Yardley (2000, p.216), such characteristics include ‘credibility, reliability, use of rigorous methods and verification, validity, clarity, and coherence in reporting’ among others. According to Cohen and Crabtree (2008, p.333), scholars largely contend that ‘qualitative research should be ethical, be important, and be clearly and coherently articulated and use appropriate and rigorous methods’.
In the light of the identified qualities of good research methodology, validity is a striking trait vital for consideration in studies using case studies as the main research methodology. Validity can both be internal and external. Yardley (2000, p. 220) defines validity as the ‘best approximation to the truth or falsity of proportions’. External validity implies the degree of truth of various claims raised in the research and the existing variables.
On the other hand, Cohen and Crabtree (2008, p.333) posit that external validity implies the ‘extent to which one can generalise findings’. The method utilised in a qualitative research should aid the researchers to attain optimal levels of validity for their research for their work to add significant knowledge to the body of knowledge they seek to amplify. Case studies are important in this extent since they provide means for challenging various theoretical constructs and assumptions.
Methods of data analysis
Analysis involves examination of secondary data derived from literature on the formation of mergers and acquisitions to extract information on the extents of consideration of aspects of cross-cultural differences at various phases of mergers or acquisitions formation. Through this examination, gaps in the incorporation of cultural differences in processes of merger and acquisitions formation are identified.
The research paper by Weber and Tarba does not indentify its sample size. It does not also indentify the number of empirical theoretical studies or even case studies reviewed. The selection criteria of the different researches used in their review are also not indentified.
Research requires consideration of ethical issues in its design. In research, design, ethics implies compliance to acceptable research standards. Ethics in research is taken care of by conducting a research in a respectful, honest, and humane manner, which is engulfed within the values of collaboration, service, and empathy.
In the context of research by Yaakov Weber and Shlomo Tarba, validity, as an essential ethical issue, is well addressed. Case studies aid in the establishment of a practical framework for operation of suggested theoretical principles, which enhances the validity of the research. Ethics of research are observed by enhancing originality and provision of valuable research findings.
Adoption of research design in the future
Weber and Tarba’s research observes validity as an essential outcome of qualitative research deploying case studies and other forms of secondary data. The research offers possible insights and solutions to the challenges of corporate culture coupled with its implications in the pre-merger or acquisitions, the negotiation stage and the post-merger or acquisition stage.
The solutions offered are consistent with the identified gaps (lack of consideration of corporate culture in the planning and negotiation phases in formation of a merger or an acquisition). This implies that the research methodology is adoptable in other similar research study in the future.
Main findings and implications
Outline of the main findings
One of the chief findings of the research paper by Weber and Tarba (2012) is that the management teams and executives in charge of planning for mergers and acquisitions do not consider perspectives of cross-culture in the planning and negotiation phases of mergers or acquisitions’ formation. In addition, they do not have adequate knowledge on different organisational cultures; hence, evaluation and assessment of the implications on mergers and acquisitions become problematic.
The research notes that measurement of various organisational cultural differences is important at three stages. The authors report that at the planning phase, evaluation, and assessment of cross-cultural differences are the three important phases in a bid to increase the profitability of organisations.
Profitability increases since the identification of challenges anticipated in a merger or acquisition is possible on measurement of cross-cultural differences in organisations coming together to form a merger or acquisition. On identifications of cultural differences and upon their measurement, the authors argue that cash flow expectation can be determined and the impacts of the differences on the EPS and stock prices evaluated.
The research also notes that incorporation of perspectives of cross-cultural differences at the phase of mergers and acquisitions formation is important at the negotiations phase. Assessment and measurement of cross-cultural differences at this phase is crucial for various reasons as it aids in preparing for negotiations.
These preparations include provision of a mechanism of enabling organisations to understand communication challenges due to differing organisational culture, identification and drawing of red lines and strategies to handle cultural differences expected, and establishing a mechanism of determining the costs for the formation of mergers and acquisitions.
At the stage of negotiations, assessment and measuring of cross-cultural differences is of great importance in the effort to set up payment structures in relation to hardships for enhancing the integration process. Identification of challenges expected in mergers and acquisitions helps in the attainment of the negotiations’ objectives.
At the stage of contract signing, assessment and measurement of cross-cultural differences aids in the acceptance of appropriate prices while considering risks of cultural differences coupled with challenges of a merger and acquisition implementation. It also helps in determining the required levels of cooperation coupled with determining the requisite plan for implementation.
The third finding is on the importance of assessment and measurement of cross-cultural differences the in the integration process for organisations forming mergers or acquisitions. Through the measurement and assessment of cross-cultural differences, organisations are in a position to establish the correct approach of integration, determine the appropriate units for integration within organisations in the context of desired common culture.
The findings have the implication of calling for deployment of cross-cultural differences measurement in the planning, negotiation, and post-merger or acquisition phases, screening, and then classification of the potential candidates to engage in a merger or acquisition. This way, it becomes possible to avoid failures of mergers and acquisitions due to cross-cultural differences.
The findings also imply that mergers abort due to the failure to include the perspective of cross-cultural difference in the planning and negotiation phases of merger and acquisition formation. Hence, by understanding the various cultural differences amongst potential candidates for forming an acquisition or merger with, communication strategies for successful recruitment coupled with training can be developed in line with the prevailing organisational cultural differences.
The researchers provided important insights on how to evade failure of mergers and acquisitions due to the cross-cultural difference in the involved organisations. The study was based on case studies of experienced failures on mergers and acquisitions deals to consider the aspect of cross-cultural differences in all phases of forming acquisitions and mergers.
However, the researchers did not infer from their findings to explain how such information could be applied through the application-specific findings on avoiding failure of mergers or acquisitions applicable to each case.
Highlighting key points
In the research conducted by Weber and Tarba using the evaluation of both theoretical and empirical studies on effects of cross-cultural differences in formation of mergers and acquisitions, the authors conclude that the perspectives should be considered in the planning, negotiation, and post-merger or acquisition phases. The findings of their research indicate that the incorporation of these perspectives may aid in reduction of failure rates of mergers and acquisitions.
Suitability of the research design
Although case studies are deployed to evaluate the role of cross-cultural differences in the success of mergers and acquisitions, this research design has the limitation of failing to infer back to the case studies to establish appropriate course of action that could have avoided failure of specific mergers and acquisitions discussed in the case studies. However, the findings are important for consideration in the future mergers involving organisations with differing cross-cultures.
Cohen, D. & Crabtree, B. 2008, ‘Evaluative Criteria for Qualitative Research in Health Care: Controversies and Recommendations’, Criteria for Qualitative Research, vol. 6 no.4, pp. 331-339.
Weber, Y. & Tarba, S. 2012, ‘Mergers and Acquisitions Process: The Use of Corporate Culture Analyses’, Cross Cultural Management, vol.19 no.3, pp. 288-303.
Yardley, L. 2000, ‘Dilemmas in qualitative health research’, Psychological Health, vol.15 vol.3, pp. 215-228.