THE EFFECT OF CULTURAL INTEGRATION ON FINANCIAL PERFORMANCE POST-MERGER

Rishma Vedd and David Liu

Global Journal of Business Research, 2017, vol. 11, issue 1, 71-84

Abstract: This research study examined the effects of combining unlike corporate cultures. We analyzed both successful and unsuccessful mergers measured by post-merger performance indicators for the year before and after the merger. Our null hypothesis states that the success or failure of organizations in combining their respective corporate cultures is directly proportional to their financial performance, measured by the aforementioned indicators of Stock Price, Net Income, and Earnings per Share both before and after the merger. Our alternative hypothesis states that there is an inversely proportional relationship for financial performance after a merger. The results conclude that the probability of an improvement or decline of financial performance after a merger is 0.5 depending on the success or failure in combining corporate cultures. The study shows that five subjects accepted the null hypothesis, two subjects accepted the alternative, and three subjects rejected both the null hypotheses and the alternative hypotheses.

Keywords: Corporate Culture; Merger; Post-Merger Performance (search for similar items in EconPapers)
JEL-codes: F0 G0 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ibf:gjbres:v:11:y:2017:i:1:p:71-84

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