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Does cultural assimilation affect organizational decision-making on quality-related incidents? — A company's post-M&A experience

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  • Ito, Satoshi
  • Fujimura, Shuzo
  • Tamiya, Toshihiko
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    Abstract

    Differences in organizational culture have been suggested as the major reason for the failure of mergers and acquisitions (M&A) to achieve synergies. We analyze an M&A case, focusing on the assimilation of organizational culture particularly with regard to quality. The purpose is to explore the consequences that internal inconsistencies in quality culture exert on quality performance, and to illustrate whether the assimilation of quality culture relates to organizational decision-making as corporate integration proceeds after a merger. We collect a unique data set that is not generally available, including internal quality data, customers' quality ratings, and records of quality-related incident resolution. A total of 301 incidents occurring during five years after a merger are analyzed by measuring the time taken to address the incidents and conducting a questionnaire survey followed by interviews. Further, a modeling study of the cultural assimilation process is conducted to establish a relationship between our theory and empirical findings. The results reveal that the efficiency of organizational decision-making is associated with the degree of cultural assimilation and how deeply into the layers of quality culture the assimilation extends. The findings suggest pragmatic implications as well as effective strategies managers could adopt for M&As and stimulate further research on corporate consolidations.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 18 (2012)
    Issue (Month): 2 ()
    Pages: 160-179

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    Handle: RePEc:eee:intman:v:18:y:2012:i:2:p:160-179

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    Related research

    Keywords: Cultural assimilation; Quality culture; Organizational decision-making; Cross-cultural management; Mergers and acquisitions; Agent-based simulation;

    References

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    1. Shimizu, Katsuhiko & Hitt, Michael A. & Vaidyanath, Deepa & Pisano, Vincenzo, 2004. "Theoretical foundations of cross-border mergers and acquisitions: A review of current research and recommendations for the future," Journal of International Management, Elsevier, vol. 10(3), pages 307-353.
    2. Denis Gromb, 2007. "Cultural Inertia and Uniformity in Organizations," Journal of Law, Economics and Organization, Oxford University Press, vol. 23(3), pages 743-771, October.
    3. House, Robert & Javidan, Mansour & Hanges, Paul & Dorfman, Peter, 2002. "Understanding cultures and implicit leadership theories across the globe: an introduction to project GLOBE," Journal of World Business, Elsevier, vol. 37(1), pages 3-10, April.
    4. HIROTA Shinichi & KUBO Katsuyuki & MIYAJIMA Hideaki, 2007. "Does Corporate Culture Matter? An Empirical Study on Japanese Firms," Discussion papers 07030, Research Institute of Economy, Trade and Industry (RIETI).
    5. Roberto A. Weber & Colin F. Camerer, 2003. "Cultural Conflict and Merger Failure: An Experimental Approach," Management Science, INFORMS, vol. 49(4), pages 400-415, April.
    6. Vijay Pothukuchi & Fariborz Damanpour & Jaepil Choi & Chao C Chen & Seung Ho Park, 2002. "National and Organizational Culture Differences and International Joint Venture Performance," Journal of International Business Studies, Palgrave Macmillan, vol. 33(2), pages 243-265, June.
    7. Nicolas Coeurdacier & Roberto A. De Santis & Antonin Aviat, 2009. "Cross-border mergers and acquisitions and European integration," Economic Policy, CEPR & CES & MSH, vol. 24, pages 55-106, 01.
    8. Karen L Newman & Stanley D Nollen, 1996. "Culture and Congruence: The Fit Between Management Practices and national Culture," Journal of International Business Studies, Palgrave Macmillan, vol. 27(4), pages 753-779, December.
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    Cited by:
    1. Cláudia Frias Pinto & Fernando Ribeiro Serra & Manuel Portugal Ferreira, 2014. "A bibliometric study on culture research in International Business," Working Papers 107, globADVANTAGE, Polytechnic Institute of Leiria.

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