GUEST EDITORS’ NOTE:
THE ROLE OF HR PRACTICES IN
MANAGING CULTURE CLASH
DURING THE POSTMERGER
INTEGRATION PROCESS
YA A K O V W E B E R A N D Y I T Z H A K F R I E D
Introduction
he pervasiveness and growth of
T merger and acquisition (M&A) ac-
tivity around the world, and the
volume of capital involved, stand
in sharp contrast to the high fail-
ure rate of M&As. In 2007, the volume of
global M&A activity broke all records, and
recent surveys reveal that despite the global
financial market crisis, executives worldwide
remain optimistic about their M&A plans
(BCG, 2008; Deloitte, 2007). At the same
time, managers of acquiring firms reported
that only 56% of their acquisitions could be
considered successful when measured against
their original goals (Schoenberg, 2006). Stud-
ies indicate that on average M&As do not
create value (King, Dalton, Daily, & Covin,
2004; Stahl & Voight, 2008). In short, at the
premerger stage executives appear convinced
that M&As are a promising route to corporate
growth, even though the overall M&A suc-
cess rate does not justify such optimism.
Studies investigating the predictors of
M&A success in various research areas such as
finance, strategy, and international manage-
ment have produced inconsistent and con-
fusing results, and recent meta-analyses ex-
amining the most widely studied variables in
the M&A literature (King et al., 2004; Stahl &
Voight, 2008) have not clearly established the
Human Resource Management, September–October 2011, Vol. 50, No. 5, Pp. 565–570
© 2011 Wiley Periodicals, Inc.
Published online in Wiley Online Library (wileyonlinelibrary.com).
DOI:10.1002/hrm.20449
reasons for the high failure rate of M&As. The
paradox of high M&A popularity and high
M&A failure rate suggests that researchers
have not systematically examined organiza-
tional practices that may affect the integra-
tion of individuals into the new cultures that
emerge following the M&A process.
More specifically, the cross-cultural fac-
tor in M&A success has been the subject of
contrasting views, and contradictory and con-
fusing findings (Stahl & Voight, 2008; Teeri-
kangas & Véry, 2006). On one hand, many
studies in the last two decades provide evi-
dence that cultural differences between the
merged organizations were detrimental to M&A
performance (Chatterjee, Lubatkin, Schweiger,
& Weber, 1992). On the other hand, recent
findings indicate that cultural differences can
have both negative and positive effects on M&A
performance (e.g., Ahammad & Glaister, 2011;
Junni & Sarala, 2011). Despite a large literature
on cultural differences in M&A, accumulated
over many years of research, cross-cultural
issues during the postmerger integration period
remain poorly understood.
Furthermore, although human resource
(HR) practices have frequently been men-
tioned as a potential contributor to the effec-
tiveness of M&As (e.g., DeNisi & Shin, 2004;
Stahl, Mendenhall, & Weber, 2005; Weber,
Shenkar, & Raveh, 1996), there is a dearth
566 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011
of empirical studies of the relationships be-
tween post-M&A culture clash and (a) the
types of HR practices adopted to promote
cultural integration during the implementa-
tion of M&As, and (b) the effect of these HR
practices on the success of the M&A. A major
objective of this special issue is to explore the
important, yet neglected topic of the role of
HR practices in managing the integration of
organizational cultures in M&As.
The Neglected Role of HR Practices
in the Management of Mergers &
Acquisitions
The finance and strategy literatures have fo-
cused primarily on premerger factors as deter-
minants of the success of M&As. The implicit
assumption in most studies in these litera-
tures has been that the actions of the acquir-
ing firm during the premerger stage are the
major determinants of the value added by
the M&As. Accordingly, prior studies have
typically observed how managers of the ac-
quiring firm searched for alternatives or ana-
lyzed the advantages and disadvantages of
their strategies and their intended effects,
while paying less attention to the implemen-
tation processes of the merger or acquisition.
For example, strategic theories, especially
those relying on the concept of strategic fit,
suggest that relatedness between the acquir-
ing and acquired firms (i.e., the extent to
which the firms had products and/or markets
that shared features) determines synergy po-
tential, and as such is the key determinant of
value creation. However, the empirical evi-
dence derived from studies of M&As that ex-
hibit relatedness is mixed at best.
The finance literature suggests further
that on average M&As do not add value to
the acquiring firm, but rather are more likely
to be detrimental to long-term shareholder
value. The results of a recent meta-analysis on
the effects of finance and strategy variables
on M&A performance by King et al. (2004)
led the authors to conclude that “researchers
simply may not be looking at the ‘right’ set
of variables as predictors of post-acquisition
performance” (p. 197).
Thus, an overarching theme of this special
issue is that research investigating traditional
finance and strategy variables that focus on
the premerger stage can predict only the po-
tential of integration effectiveness, given that
the conditions for synergy are presented that
management knows how to harness these
conditions. In reality, the failure to find a
consistent relationship between indicators of
synergy based on relatedness and M&A suc-
cess may stem from an overemphasis on the
premerger stage at the expense of the post-
merger implementation stage. With a few
exceptions, the strategic and finance litera-
ture has not considered the possibility that
key determinants of M&A outcomes may be
related to problematic interactions between
people of the acquiring and acquired firms
stemming from cultural differences between
the firms (Lubatkin, Schweiger, & Weber,
1999; Weber, 1996), or to poor coordination
and cooperation between managers resulting
from a culture clash following the merger
(Weber et al., 1996). Indeed, we suggest that
the management of the postmerger integra-
tion process is crucial in determining the
extent to which the potential for synergy is
realized. To date, only a limited number of
management studies have focused on iden-
tifying the factors that can contribute to
cultural integration that in turn enables the
postmerger integration success. Much effort
is needed to develop and update acquisition-
specific knowledge, methods, procedures,
and systems that reduce the causal ambigu-
ity of decisions, actions, and performance.
This special issue is intended to address these
issues.
The Contribution of HR Practices to
Merger & Acquisition’s Success
Human resource problems during the inte-
gration process may prevent exploitation of
the potential synergy that can arise from
sharing or transferring resources and skills.
Individuals may resist knowledge transfer
when they perceive fundamental differences
between the organizations (Weber & Drori,
2011). Moreover, cultural differences between
the two firms may cause such problems as
Human Resource Management DOI:10.1002/hrm

stress and negative attitudes and lower levels
of commitment and cooperation toward the
acquiring firm and its management (Fried,
Tiegs, Naugfton, & Ashforth, 1996; Weber,
1996; Weber et al., 1996), low trust (Weber &
Drori, 2011), and high turnover of the execu-
tives in the acquired firm (Lubatkin et al.,
1999), all of which are detrimental to M&A
performance (Hambrick & Cannella, 1993).
Some scholars have suggested that HR
practices can create knowledge and capabili-
ties that enhance competitive advantage and
performance of the merged entity (Morris,
Snell, & Wright, 2006; Weber & Tarba, 2010).
For example, Lado and Wilson (1994) main-
tained that HR practices “can contribute to
sustained competitive advantages through
facilitating the development of competencies
that are firm-specific, produce complex social
relationships…and generate organizational
knowledge” (p. 669). However, few HR re-
searchers have mentioned the importance of
transfer and integration mechanisms follow-
ing a merger, and fewer still have discussed or
empirically tested the use and effects of HR
practices on the cultural integration of the
merged firms, and how the latter contributes
to the value added by the new firm.
We argue that one reason why the re-
search on acquisition performance in several
disciplines, such as industrial economics,
strategic management, and finance, has not
produced consistent results is that it has
failed to account for the role of the HR prac-
tices implemented during M&As. To develop
the requisite knowledge and capability for
improving the management of M&As, it is
necessary to focus on the HR practices that
can be useful in dealing with HR challenges
following a merger or acquisition to integrate
the two firms and successfully transfer assets
and skills to and from the acquired firm.
Stone et al. (2007) reviewed HRM theories
and research, and concluded that it is of “...
low quality, and typically describes organi-
zational phenomena rather than testing the
effectiveness of HRM practices,” and that a
“high percentage of published papers focus
on trivial issues, and do not always make im-
portant contributions to applied problems….
As a result…research has limited utility and
Human Resource Management DOI:10.1002/hrm
GUEST EDITORS' NOTE 567
applicability in organizations” (p. 93). This
is consistent with the current limitations of
M&A theory and with HRM practices and
findings about culture clash, conflict, and
employee resistance in M&As (e.g., Björk-
man, Stahl, & Vaara, 2007; Weber, Reichal, &
Tarba, 2011). This special issue aims to over-
come some of these limitations.
Although the articles we have chosen
reflect a wide array of theoretical and empiri-
cal perspectives, their thematic focus homes
in on three primary issues. First, the articles
focus on the status of theory and research on
HR practices during cross-cultural situations
in postmerger integration processes. Second,
they consider the status of theory and re-
search in specialized areas of M&As that
are underexplored, such as reward systems,
knowledge transfer, trust, emergent culture,
and boundaries of the organizations, among
others. Finally, some of the authors take on
the important task of incorporating both pre-
and postmerger stages into their research,
whereas others conduct interdisciplinary or
multimethod research. A brief overview of
each article follows. Thus, the contribution
of this special issue is in three neglected areas
of HR practices in M&A.
1. HR Practices for Management of the Post-
merger Stage
To enhance M&A performance, acquirers
must develop integration capabilities and
use certain mechanisms and practices to
manage the postmerger integration pro-
cess. For example, recent studies suggest
mechanisms to build integration capabili-
ties, such as training, communication,
and autonomy delegation to HR managers
(Weber & Tarba, 2010). Other similar
mechanisms will be presented in this spe-
cial issue.
2. Interdisciplinary Research
M&A knowledge has been developed
through different streams of research that
seem to exist in a state of splendid isola-
tion. Some scholars have argued that
many prior studies have neglected context
and levels of analysis, and ignored the fact
that individuals are embedded in organi-
zations and organizations are embedded
568 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011
in environments (Weber et al., 1996).
Focus on cross-cultural management car-
ries the potential for cross-fertilization
between these different disciplines and
levels through interdisciplinary research,
as scholars from the fields of strategic
management, finance, international man-
agement, and organizational behavior in-
vestigate the effects of cultural differences
on M&A performance. Some of the articles
in this special issue are of an interdisci-
plinary nature.
3. Combining the Pre- and Postmerger Stages
An overarching theme of this special issue
is that the failure of past research to find a
consistent relationship between synergy
and M&A success may stem from an over-
emphasis on the premerger stage at the
expense of the postmerger stage and the
mechanisms inherent in processes of firm
integration. This special issue contains
studies that highlight and clarify some of
the complexities, interconnected pro-
cesses, and synchronized activities of both
pre- and postmerger stages.
In the first article, the authors present
and test a new theoretical framework that
offers a conceptual synthesis of the antecedents
and consequences of trust during M&A.
Stahl, Larsson, Kremershof, and Sitkin use a
case survey method to test their hypotheses.
Unlike most M&A studies that focus on a sin-
gle stage of M&A, either pre- or postmerger,
the authors combine the characteristics and
considerations before the deal, such as col-
laboration history, performance differences,
communication quality, multiculturalism,
and cultural distance, with trust components
and sociocultural integration outcomes such
as commitment, satisfaction, intention to
stay, and cooperation that are critical to finan-
cial performance after the deal.
In the article that follows, Lakshman
examines the nature and features of the
integration process using a knowledge base
lens to view the cultural and organizational
integration mechanism leading to integra-
tion effectiveness. A theoretical model is
developed using an interdisciplinary app-
roach that draws on literature from strategic
HRM, knowledge management, and leader-
ship literatures.
Scholars and practitioners agree that
cultural differences between the merg-
ing organizations have a major effect on
the likelihood of M&A success. However,
little is known about the process by which
the new culture emerges after the merger.
In the third article, Drori, Wrzesniewski,
and Ellis report on an in-depth field study
of an IT firm created from a sequence of
four mergers. They explore the process of
demarcating boundaries and the permeabil-
ity of those boundaries that jointly create
new meanings that shape the identity and
culture of the merged organizations.
Teerikangas, Véry, and Pisano seal this
issue with their article that focuses on
managerial actions taken by integration
managers who are responsible for the imple-
mentation of M&As. The findings presented
show that these managers affect overall
performance by actions taken during both
pre- and postmerger stages. These actions
not only create value such as knowledge
transfer to and from the acquired company,
but also help avoid “value leakage” brought
about by reduced staff motivation and in-
creased turnover.
In sum, this issue offers new insights for
both academics and practitioners of M&As.
The intent of this issue is to encourage M&A
scholars to advance our knowledge by engag-
ing in interdisciplinary, multistage, and mul-
tilevel research and practice.
Human Resource Management DOI:10.1002/hrm
 GUEST EDITORS' NOTE 569

YAAKOV WEBER is the chair of the Strategy and Entrepreneurship Department and also
acts as president of the EuroMed Research Business Institute. The insights in his articles
and books on M&A are widely cited (more than 1,000 citations in leading journals and
books). His consulting experience includes large corporations such as Coca-Cola and
Motorola, as well as industry association such as The Rubber and Plastic Industry As-
sociation.

YITZHAK FRIED is a professor of organizational behavior and human resources. His

research focus on the contribution of context has been extensively cited in the literature
(more than 1,000 times in the ISI Web of Science). He is a fellow in the Society of Organi-
zational Behavior and the Society of Industrial and Organizational Psychology (a division
of the American Psychological Association). He has also served as a consultant to vari-
ous companies in the service and manufacturing industries.

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