Culture is a broad, woolly concept, which often means different things to different people. And, unsurprisingly, culture clashes have been used to describe all sorts of organizational conflicts that occur following an acquisition. Therefore we launched a study to understand which specific types of cultural compatibility impact the subsequent performance of a cross-border acquisition. Six dimensions of cultural difference were identified and investigated. The six dimensions were concerned with differences between the management styles of the bidder and target in terms of: organisational formality, extent of participation in decision-making, attitude towards risk, systemisation of decision-making, managerial self-reliance and attitudes towards funding and gearing. The key dimension that had a measurable effect on acquisition performance was risk orientation.
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