Effects of Cultural Assimilation in a Cross-Border M&A

This paper examines a merger of two companies with respect to the assimilation of corporate culture differences, particularly quality culture. The study aims to clarify the root cause of declines in quality ratings from customers after a merger despite maintaining products and services as they were before the merger, and whether cultural differences affect decision-making in a newly merged company. Examination is reported of the relationship between actions taken to assimilate quality culture and the resulting quality ratings given by customers, and analyzed is the time required to address quality incidents and the progress of cultural assimilation. A total of 301 incidents in the 5 years after a merger were analyzed, focusing on the time required to resolve the incidents. These empirical analyses reveal that the extent of cultural assimilation is associated with the speed of organizational decision-making and affects the quality ratings given by customers.