Chapter 2 Cultural realities in M&A transactions Definition. Just defining culture is one of the most difficult parts of the M&A process to address because there are so many definitions out there (just try an internet search of the term). Furthermore, as commented previously, definitions It is hard to solve a problem you fit for the steady state are not fit for the M&A environment. can’t define. The problem with the So, to ground the reader, we will explain what we mean by culture in an M&A context, but we will also explain why the term ‘culture’ itself is that there are constituent parts are more important than the definition. so many definitions out there. We concluded that definitions fit for the Components of culture (shown in the culture framework). ‘steady state,’ which we already have The fact is that not all components of organizational culture in our organization, were not fit for are equally important or will have a major impact on the performance of the organization during the critical acquisition the practical realities of a M&A and and integration phases that form part of the total deal life all the dynamics and constraints that cycle. The challenge is to distinguish the truly important from come with trying to do a deal. Culture the elements of lesser importance based on the type of deal change at the best of times is a slow and the phase within the deal life cycle. While, this challenge process, whereas in contrast M&A is should not be underestimated, in practice no firm tries to tackle all the parts of culture shown in the framework at the fast and chaotic.” same time, or places equal weight on the components. And Vice President, Human Resources while it is true to say that each deal is different, requiring a different emphasis, the overall process and starting point are relatively consistent from deal to deal. People and culture are interrelated. Understand the connection between people and culture. They are inseparable, interrelated and interdependent. The two must be tackled together, since, simply stated, if there are no people in a transaction, then there are no cultural problems to worry about. 6 willistowerswatson.com