Mergers can be a great way to move your business forward. Understanding some of the things that can go wrong can help you to better determine whether a particular merger is right for your business.
One of the things that can often cause a merger to fail is cultural differences. It’s easy to focus on the supposed financial advantages of a merger, but incompatible cultures could be problematic.
How will customers view it?
Some businesses are big on certain values, such as sustainability and ethics or staying local. That can attract a loyal base of customers who also value such things. Yet, many businesses that might seem financially apt to merge with won’t share those same values. If customers of one or both companies feel the merger is a betrayal of the values that attracted them, they may abandon, negating much of the benefit you hoped to gain.
How will staff view it?
Maybe both companies share similar outward values but have very different office cultures. One believes in incentivizing staff to work harder with bonuses and paychecks, meaning that some earn far more than others, but burnout is high. The other business believes that all staff are just as valuable as each other and keeps pay differences to a minimum. People are happier and more relaxed, but no one earns a big paycheck. Staff may struggle when two such different working cultures are combined.
If you are considering a merger, be sure to do due diligence. Sometimes, it can be easy to become too involved to see things clearly. Getting experienced legal help can help you to build a clearer picture of whether a merger is right for you and what legal issues you will need to handle if you proceed.
