In mergers and acquisitions, financial, legal and operational due diligence is usually carried out thoroughly. Culture, by contrast, is often covered with a general assessment such as "the two organizations seem to have similar values". Yet culture differences are one of the most frequently cited reasons integrations fail: differences in how decisions are made, how risk is approached or whether people can push back on their manager can lead to talent loss, decision bottlenecks and delayed synergies in the first months after a deal. In this article we explain at which stage, on which dimensions and with which methods cultural fit should be measured in mergers and acquisitions.
- Cultural fit does not mean the two companies have the same culture. It means their differences are known and can be managed in line with the combined company's goals.
- Culture is measured in three stages: an initial assessment with limited data before the deal, a baseline with the same survey in both companies right after closing, and regular monitoring throughout integration.
- The most important dimensions to compare are decision-making, the attitude to risk and mistakes, hierarchy and authority, performance and reward, communication and the approach to customers.
- Measuring how the two companies see each other, not just how they see themselves, reveals early the stereotypes and the "us and them" divide that will cause problems during integration.
What does cultural fit mean?
Cultural fit does not mean that two companies have the same culture. Two very similar companies can struggle with integration, and two very different companies can succeed by managing their differences well. Measuring cultural fit aims to answer three questions:
- In which areas are the two companies clearly different?
- Which of these differences will make it harder for the combined company to reach its goals?
- Which culture traits should be preserved in the combined company, and which should change?
How culture measurement is designed also depends on the integration approach. Nahavandi and Malekzadeh's work on acculturation in mergers describes four basic paths:
| Integration path | What happens | Focus of culture measurement |
|---|---|---|
| Assimilation | The acquired company adopts the acquirer's culture. | Where the acquired company needs to change most and how ready it is for that change |
| Integration | The strengths of both cultures are combined into a new shared culture. | The strengths of both companies and how the shared culture will be defined |
| Separation | The acquired company keeps its own culture and relative independence. | Friction at the interfaces, the areas where the two companies work together |
| Deculturation | The acquired company loses its own culture without adopting the new one. | An outcome to avoid; loss of belonging, trust and intention to stay should be monitored. |
Clarifying the chosen path in advance determines which question the culture survey needs to answer. We explain the general approach in setting goals before an employee survey.
What to measure at each stage
In mergers and acquisitions, culture measurement is not a one-off survey but work that repeats throughout the process:
| Stage | Purpose | Method |
|---|---|---|
| Before the deal (due diligence) | Spot cultural risks early and feed into the integration plan | Leadership interviews, any previous survey results from the target, turnover and HR data, policy and process documents, employees' public reviews |
| First three months after closing | Create a comparable baseline for both companies | The same culture survey in both companies, a workshop on the preferred culture for the combined company, focus groups |
| Integration period | Monitor uncertainty, trust, intention to stay and the "us and them" divide | Short pulse surveys every three months, interviews with key employees |
| 12 to 18 months later | See how far cultural integration has progressed | A full repeat measurement with the baseline items |
Surveying the target company's employees before the deal is usually not possible; for confidentiality reasons, employees may not even know about the process. The initial assessment is therefore made with limited data and should be treated not as a final verdict but as a list of hypotheses to be tested after closing.
Which culture dimensions should be compared?
The value lists of two companies often look alike: both say they are customer focused, innovative and people-oriented. The differences that cause problems in integration lie not in value statements but in everyday ways of working. The main dimensions to compare are:
| Dimension | Company at one end | Company at the other end |
|---|---|---|
| Decision-making | Decisions are made quickly by the person who owns them. | Decisions are made by consensus and pass through several approval levels. |
| Attitude to risk and mistakes | Experimentation is encouraged and failed attempts are seen as learning. | Avoiding mistakes is the priority; new ideas are implemented after thorough analysis. |
| Hierarchy and authority | Titles matter little and anyone can reach senior leadership directly. | Communication follows the hierarchy and pushing back on a manager is rare. |
| Performance and reward | Individual results are rewarded and bonus differences are large. | Team success and tenure are rewarded and differences are limited. |
| Communication | Information is shared openly and informally. | Information is shared through formal channels on a need-to-know basis. |
| Planning and flexibility | Plans change often and fast adaptation is expected. | Long-term plans and predictability matter. |
| Approach to customers | Rules can be bent for a customer request. | Standard processes come before customer requests. |
Translate each of these dimensions into observable behavioral items, as described in our article on the organizational culture survey. If you use a model such as the OCAI, you can compare the current culture profiles of both companies and the preferred culture profile for the combined company on the same chart.
One rule matters: ask the same items, on the same scale and at the same time in both companies. Running the acquirer's annual survey unchanged in the acquired company means measuring the acquired company's culture through the acquirer's lens.
Measuring how the two companies see each other
In mergers, how both sides perceive the culture difference matters as much as the difference itself. To see this, you can ask employees of both companies to rate the other company as well as their own. For example, the same items are asked twice: once for "my company" and once for "the other company".
This method provides three important findings:
- Real differences: How each company describes its own culture.
- Stereotypes: The gap between how company A sees company B and how B sees itself. Employees of the acquirer often see the acquired company as slower, less organized or less professional than it really is.
- Concerns: The areas in which employees of the acquired company see the acquirer's culture as a threat.
Add a "don't know" option for employees who do not know the other company well. The share choosing this option is a finding in itself: it shows how little the two companies know each other.
What to monitor during integration
The first year after a merger is a period of high uncertainty for employees. Alongside the culture items, it is useful to track these areas with short pulse surveys:
- Uncertainty and information: "I know how the merger will affect my job."
- Trust in senior leadership: "The reasons behind merger-related decisions are explained clearly."
- Intention to stay: "I intend to still be working here a year from now."
- Fairness: "Employees of both companies are treated equally in merger-related decisions."
- Belonging to the combined company: "I see myself as part of the combined company rather than my former company."
- Working together: "It is easy to work with colleagues who came from the other company."
Always report these items by former company. The company average may look fine while trust and intention to stay are falling fast among employees of the acquired company. We explain how to set up pulse surveys in what is a pulse survey.
Key employees, those who carry customer relationships, technical knowledge or team leadership, are the group most easily lost in mergers. Track their intention to stay through one-to-one conversations as well as survey results.
How to interpret the results
- List the largest differences: Identify the five or six items with the largest gap between the two companies.
- Rank differences by impact: Differences in areas where employees of the two companies will work together every day come first. Under a separation model, differences between units that do not interact matter less.
- Identify the strengths to preserve: Culture traits that were part of the reason for the acquisition, such as speed or closeness to customers, must not be lost during integration. Track the scores for these traits separately throughout integration.
- Treat stereotypes separately: If the two sides' perceptions of each other are larger than the real differences, the problem is not a culture gap but a lack of familiarity. Joint projects and mixed teams are the most effective tools here.
- Read differences with breakdowns: The acquired company may have its own subcultures. We cover this in our article on subcultures.
Common mistakes
- Thinking about culture after closing: Culture assessment should start before the integration plan is drawn up; otherwise the plan is made without taking culture differences into account.
- Asking only leaders: Senior leadership's view of the two companies can be very different from employees' everyday experience.
- Assuming the acquirer's culture is right: Measuring the acquired company's culture only as the side that "needs to adapt" can lead to the loss of strengths worth keeping.
- Neglecting anonymity in a small company: If the acquired company is small, breakdowns narrow very quickly. Set reporting thresholds in advance and explain them clearly to employees. For details, see anonymity in employee surveys.
- Measuring without sharing the results: Asking questions and giving no answers in a period of high uncertainty quickly erodes trust.
Turning cultural integration into results
Culture measurement in a merger is not about documenting how different the two companies are; it is about making the integration plan more realistic. For the main differences in the baseline, agree shared working rules for the combined company, add the strengths to be preserved to the integration goals, and track progress with the same items. We explain how to monitor long-term culture change in our article on measuring culture change.
Frequently asked questions
What is cultural fit in mergers and acquisitions?
Cultural fit is how far the ways of working of two merging companies, in areas such as decision-making, risk-taking, authority and collaboration, are compatible with the goals of the combined company. The aim is not to make the two cultures identical, but to know the critical differences and manage them in the integration plan.
How is culture assessed before an acquisition?
Surveying the target company's employees before the deal is usually not possible. At this stage, leadership interviews, any previous employee survey results from the target, HR data such as turnover and absence, internal documents and policies, and employees' public reviews are used.
When should a culture survey be run after a merger?
The baseline should be measured within the first three months after closing and before major organizational changes are announced. During integration, progress is tracked with short pulse surveys every three months and with a full repeat measurement 12 to 18 months later.
What questions should a cultural fit survey include?
The same items should be used in both companies. Items should cover dimensions such as decision-making, the attitude to risk and mistakes, hierarchy and authority, performance and reward, communication, collaboration and the approach to customers. During integration, items on uncertainty, trust, intention to stay and belonging to the combined company are added.
Which culture differences cause the most problems in integration?
The differences that cause the most problems are those in areas where employees of the two companies will work together every day: who makes decisions and how quickly, approval processes, the attitude to mistakes and risk, and how performance is measured. Differences in value statements usually cause fewer problems.
