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Cultural Conflict and Merger Failure: An Experimental Approach

Weber, Roberto A. and Camerer, Colin F. (2003) Cultural Conflict and Merger Failure: An Experimental Approach. Management Science, 49 (4). pp. 400-415. ISSN 0025-1909 . http://resolver.caltech.edu/CaltechAUTHORS:20110207-095930114

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Abstract

We use laboratory experiments to explore merger failure due to conflicting organizational cultures. We introduce a laboratory paradigm for studying organizational culture that captures several key elements of the phenomenon. In our experiments, we allow subjects in "firms" to develop a culture, and then merge two firms. As expected, performance decreases following the merging of two laboratory firms. In addition, subjects overestimate the performance of the merged firm and attribute the decrease in performance to members of the other firm rather than to situational difficulties created by conflicting culture.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1287/mnsc.49.4.400.14430DOIUNSPECIFIED
http://mansci.journal.informs.org/cgi/content/abstract/49/4/400PublisherUNSPECIFIED
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=276288PublisherUNSPECIFIED
Additional Information:© 2003 INFORMS. Accepted by Linda Argote, Bill McEvily, and Ray Reagans; received March 1, 2001. This paper was with the authors 9 months for 2 revisions. The authors thank participants at the 2000 Behavioral Decision Research in Management meetings in Tucson, Arizona; the 2000 Economic Science Association meetings in New York, New York; the 2001 Carnegie-Bosch conference on Managing Knowledge in Organizations, in Pittsburgh, Pennsylvania; the 2002 Conference on Behavioral Learning and Bounded Rationality in Aix-en-Provence, France; and seminar participants at Carnegie Mellon University, Harvard Business School, and the University of Pittsburgh for helpful comments and suggestions. This research was supported by National Science Foundation Grant #SES-0095570. Thanks also to Dan Clendenning and Jason Dana for research assistance. This work has benefited greatly from the authors’ discussions with Linda Argote, Linda Babcock, Paul Fischbeck. Chip Heath, Herb Simon, and George Loewenstein, and from the three anonymous reviewers.
Funders:
Funding AgencyGrant Number
NSFSES-0095570
Subject Keywords:experiments; organizational culture; mergers
Other Numbering System:
Other Numbering System NameOther Numbering System ID
USC Center for Law, Economics & Organization Research PaperC01-10
Record Number:CaltechAUTHORS:20110207-095930114
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20110207-095930114
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:22042
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:21 Oct 2011 20:40
Last Modified:26 Dec 2012 12:54

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