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What Are The Advantages And Disadvantages Of A Cross-cultural Merger?

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Mehreen Misbah answered
In the contemporary world of business, a cross-culture merger is a well-known phenomenon. As its name suggests, a cross-cultural merger is the joining of two companies that belong to two different cultures. With the growing impact of globalization, such phenomena are generally regarded with a favorable impression. However besides having its undeniable advantages, cross-cultural mergers have their own set of drawbacks .

The advantages that a cross-cultural merger brings to both the companies are myriad, the most significant of which is, a better and more comprehensive sharing of ideas, skills and other resources between the two enterprises. Secondly the increased generation of business is another factor that adds to the list of benefits. Furthermore, cross-cultural mergers generally result in enhancement of industry rankings, which proves to be an added boost to the goodwill of both organizations. Also the companies involved in such mergers always end up acquiring a greater market share in the respective markets that they are operating in.

Coming to the disadvantages, a strong one would be that of inevitable cultural disharmony that couldn't be avoided no matter how amiable the work atmosphere is. In addition to that, the delegation of authority becomes another issue, which generally, companies, who are involved in such mergers, endure. Also the lay-off factor becomes a point of concern for all those organizations, which choose to merge with companies belonging to another culture.

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