Employment Relaition

Cultural Conflict and Merger Failure: An Experimental Approach Author(s): Roberto A. Weber and Colin F. Camerer Source: Management Science, Vol. 49, No. 4, Special Issue on Managing Knowledge in Organizations: Creating, Retaining, and Transferring Knowledge (Apr., 2003), pp. 400-415 Published by: INFORMS Stable URL: http://www.jstor.org/stable/4133947 . Accessed: 18/01/2014 07:06

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Cultural

An

Merger Failure: Experimental Approach

Roberto A. Weber * Colin E Camerer

Conflict

and

Mellon University, 15213 Department Socialand DecisionSciences,Carnegie of Pittsburgh, Pennsylvania Divisionof Humanities SocialSciences228-77, California and Instituteof Technology, 91125 Pasadena, California * camerer@hss.caltech.edu rweber@andrew.cmu.edu

laboratory experiments explore merger failure due conflicting organizational We cultures. We introduce a laboratory paradigm for studying toorganizational 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...