Which organization defines the culture of a merged or acquired business?

Author: Michael C. Jacobson, XpertHR Legal Editor

In most cases, the "dominant" company (read: the company that is driving the merger or acquisition) will set the parameters for the resulting company's culture. This largely depends on a variety of factors like whether the planned action is a true "merger" (two companies combining to form one) or a true "acquisition" (one company folding another into its existing business).

For a true merger, the resulting culture will likely be a combination of the pre-existing cultures of the two companies to be merged. In those cases, a pre-merger cultural compatibility assessment is considered good practice for HR professionals in both companies.

For a true acquisition, the HR professionals with the acquiring company should conduct a cultural risk assessment to determine if there are any severe incompatibilities with the company to be acquired. On the other side, HR professionals with the company being acquired should work closely with the acquiring company's HR department to assist them in their risk assessment duties.