Impact of organizational cultural differences on mergers and acquisitions performance: Quantitative study of Chinese firms

Abstract

Purpose Drawing upon the theory of organizational commitment and relative standing, this study aimed to develop an integrative model to examine how organizational cultural differences impact on mergers and acquisitions (M&A) performance. Design/methodology/approach The study used regression analysis and moderated path analysis to test the hypothesis with a sample of 103 executives from 49 firms acquired by Chinese state-owned enterprises. Findings The paper arrives at the conclusion that the executives’ organizational commitment mediated the association between organizational cultural differences and M&A performance. Besides, the authors also confirmed the moderator role of relative standing. Practical implications The paper suggests ways that can help practitioners better eliminate cultural differences obstacles during the M&A by presenting an integrative framework and showed an actual Chinese case. Originality/value This study contributes to the M&A literature by developing an integrative model to explain the complexity between organizational cultural differences and M&A performance with a Chinese executive sample.