Does the Deal Fit?

"The most successful integrations were directed by people who placed the common good of the
combined organization and its customers before all else."
From: The Mergers & Acquisitions Handbook.
By now, most business owners are familiar with the problems created by the merger of Daimler,
the German automobile company, and Chrysler, the American car maker. Here is the classic case
of cultural friction adversely impacting what was originally promoted as the merger of "equals." If
any deal can point out the importance of a cultural fit in a merger or acquisition - this is it. The
officers of Daimler took complete control and the executives of Chrysler left in droves. Not only
were the management styles completely different - centralized versus decentralized, quick
decisions versus decisions by committee, supplier rivalries versus supplier partnerships -- but, in
addition, the American management team received huge compensation packages, while the
Daimler people worked on small salaries, but huge "perks."
Mergers and acquisitions are supposed to produce synergies that bring results. If they don't, the
culture is too often the reason. John Chambers, the CEO of Cisco Systems, who has been
involved in some seventy acquisitions, says that he will not do a deal unless there is a cultural fit.
Culture according to one dictionary is defined as the "customary beliefs, social forms, and
material traits of a … social group." The word "compatible" may be a better choice defined by the
same dictionary as: "able to exist or act together harmoniously." Regardless of the semantics, if
both companies can't work well together, the deal is a bad one. The importance of this cultural fit
may be influenced by the nature of the deal and the desires of the seller. Here are some
examples:

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