Organisational culture affecting the success of mergers and acquisitions at subsidiary level in multinational pharmaceuticals

Abstract

In an ever increasing competitive environment, pharmaceutical companies keep on expanding. Mergers&Acquisitions (M&A’s) seems to be one of the preferred means of acquiring critical mass and economies of scale. Research has suggested that human resource capability in the post-acquisition implementation is critical. This study intended to explore whether the role of culture in M&A’s are acknowledged at subsidiary level and if so, to establish an applicable framework for managing it. Twelve semi-structured interviews were conducted in order to gain a deeper understanding of the effect of cultural integration on the M&A process. The data was coded, analysed and collapsed into themes in order to establish the applicability of the framework proposed by Lodorfos&Boateng (2006) and possible amendments to it. Rank order tables were used to measure the relative importance of constructs. Only two thirds of senior management at subsidiary level acknowledged the importance of culture at the time of the M&A, management strategies or plans for dealing with it was found to be inadequate with only fifty percent of interviewees being aware of it. The Lodorfos&Boateng (2006) framework is supported by the data generated in this study, but needs to be amended in terms of leadership role, people orientation and communication. Copyright