Cultural Due Diligence Protocols (Background Note)

In recent years, a number of consultant and academic studies have sought to understand why so many strategic initiatives involving the integration of two organizations fail to achieve their intended results. Results identify cultural incompatibility between the two firms as a common source of failure and note that the parties almost invariably did little or no cultural due diligence (CDD) before the deal was done. In an attempt to avoid such outcomes, some firms are taking CDD seriously and a small but growing group is formalizing cultural analysis as an integral part of their total due diligence process. This note compares a number of actual CDD protocols used by these firms and consultants.

The background note urges students to consider the implications of cultural incompatibility for a proposed merger or acquisition and provides a unique reference (there is no similar published article available) that provides a series of criteria for comparing and contrasting the range of CDD protocols currently used by organisations and management consultants.