Culture-performance relationships in mergers and acquisition: the role of trust

This paper presents a theoretical framework for investigating mergers and acquisitions (M&As) performance through an interdisciplinary, multi-stage, and multi-level approach. Trust and human resource challenges during the integration process following a merger are explored to help explain the inconsistencies among empirical findings about the effects of cultural differences on M&A performance. It is proposed that in addition to culture clash, trust has a direct effect on acquired firm’s management attitudes and behaviours, thereby influencing post-merger success. We also elaborate on how trust acts to moderate the effects of culture clash in M&As, thus elucidating contradictory findings in the literature.