The board of directors of a large Canadian law firm has plans for a merger with a smaller firm nearby. The merger’s objective is to integrate the back-office of the two firms (IT, finance, facilities, etc) in order to create economies of scale. The front offices and legal practices of the two firms will remain separate. The board has been told by the partners that the organizational cultures of the two firms differ widely, so the board wants to know whether this can create problems for the merger. Partners of both firms were asked independently about their professional experience with mergers. Those who had been involved in one or more mergers stated that cultural differences matter, and can cause serious culture clashes between professionals. How did evidence from the scientific literature help? A search was conducted in online scientific databases, which yielded a meta-analysis based on 46 studies with a combined sample size of 10,710 mergers and acquisitions. The meta-analysis confirms the partner’s judgement that there is a negative association between cultural differences and the effectiveness of the post-merger integration. However, the study also indicates that this is only the case when the intended level of integration is high. In mergers that require a low level of integration, cultural differences are found to be positively associated with integration benefits. In the case of the two law firms, the planned integration concerns only back office functions, making the likelihood of a positive outcome higher.
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