One Reason Mergers Fail: The Two Cultures Aren’t Compatible

There is a fault line where tensions often erupt in mergers. This fault line is what we call tightness versus looseness. When tight and loose cultures merge, there is a good chance that they will clash.

Tight company cultures value consistency and routine. They have little tolerance for rebellious behavior, and use strict rules and processes to uphold cultural traditions. Loose cultures are much more fluid. They generally eschew rules, encourage new ideas, and value discretion. Tight cultures have an efficient orderliness and reassuring predictability, but are less adaptable. Loose cultures tend to be open and creative, but are more disorganized. People in loose cultures prefer visionary, collaborative leaders: those who advocate for change and empower their workers. People in tight cultures desire leaders who embody independence, extreme confidence, and top-down decision making.

Fortunately, when diagnosed early, the tight-loose clashes that crop up in mergers can be handled productively. To increase their chances of achieving cultural harmony, companies should do a few things.

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