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Post-merger cultural integration from a social network perspective: a computational modeling approach

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Abstract

Although cultural integration, or sharing a common corporate culture, is crucial for the success of mergers, previous studies have been limited to firm-level analyses. From a social network perspective, this study explores how cultural integration emerges from the patterns of social interactions among individuals. Using an agent-based model, we investigate the impact of network structures within and between two merging firms on post-merger cultural integration and organizational dysfunctions—individual turnover, interpersonal conflict and organizational communication ineffectiveness—that arise from insufficient cultural integration. The simulation results demonstrate that the highest level of cultural integration is achieved when social ties are more centralized within each merging firm and the social ties between the merging firms are less concentrated on central individuals. Additionally, the results show that within-firm and between-firm network structures significantly affect individual turnover, interpersonal conflict and organizational communication ineffectiveness, and that these three outcome measurements do not vary in tandem.

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Notes

  1. In this study, we do not strictly distinguish between mergers and acquisitions because the results of computational simulations are not affected by the possession of the control right of a merged organization. For the sake of clarity, we use “mergers” to represent “mergers and acquisitions.”

  2. In this study, we also use within-firm concentration and between-firm concentration as synonyms of concentration within merging firms and concentration between merging firms, respectively.

  3. In order to check whether the simulation results do not depend on the number of time steps, we also analyzed data on 100 time steps and found similar results on 200 time steps.

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Authors and Affiliations

  1. Faculty of Policy Studies, Chuo University, 742-1-11551 Higashinakano, Hiachioji, Tokyo, 1930393, Japan

    Junichi Yamanoi

  2. Departments of Bioengineering & Systems Science and Industrial Engineering, Binghamton University, State University of New York, P.O. Box 6000, Binghamton, NY, 13902-6000, USA

    Hiroki Sayama

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  1. Junichi Yamanoi
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  2. Hiroki Sayama
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Correspondence to Junichi Yamanoi.

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Yamanoi, J., Sayama, H. Post-merger cultural integration from a social network perspective: a computational modeling approach. Comput Math Organ Theory 19, 516–537 (2013). https://doi.org/10.1007/s10588-012-9139-5

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