ABSTRACT
Mergers and acquisitions in the construction industry are fairly common, particularly as economic constraints make it harder for mid-size construction companies to grow organically into larger companies. In addition, mergers can be seen as part of a strategy designed to achieve growth. Initially, when merging two companies, employees within both organizations might experience confusion, stress or even fear due to the uncertainty they experience in the new situation. On the organizational level, these experiences can be shown in lowered commitment and productivity, as well as in increased dissatisfaction and disloyalty (Buono and Bowditch, 1989). Indeed, many companies seem to overestimate the potential benefits from merging two companies (e.g. an increase in market share) and the ease with which the merger can be accomplished. Studies show that most failures originate from lack of communication or differences in management styles and culture. In fact, it has been confirmed that as much as 80 percent of the risks associated with mergers and acquisitions originate from poorly managed cultural integration (Brahy, 2006). This chapter reports on a study of the merger of two mid-sized construction companies in the Gothenburg region of Sweden. The companies were considered to be a good match by both parties since they operate within different, but complementary, sectors within the construction market. When merging, however, other factors than optimized joint activity must be considered. These factors, such as differences in culture and styles of management, have an impact on whether a merger will be successful or not. While studying the merger between the two construction companies (A and B), questions arose on how the merger could become as efficient as possible. The most distinctive difference between the two companies is that company A focuses mainly on its projects and financial position in order to achieve profitability, while company B places a higher value on its organization and employees’ personal development. Since cultural differences tend to be overlooked during mergers, it is one of the drivers for this study. In this connection, communication can be
regarded as an essential tool (Doherty, 1988). The aim of this study is to outline how these two construction companies can manage cultural differences using different means of communication.
