Acculturation -

The View of the Acquired

Master’s Thesis 15 credits

Department of Business Studies
Uppsala University
Spring Semester of 2019
Date of Submission: 2019-06-05

Gustav Jonsson
Ehsan Ullah
Supervisor: Lena Zander
Abstract
Acquisitions are growing in popularity as a way for organizations to grow. Yet the proportion
of acquisitions that fail to meet their performance goals are high. The reason behind this failure
rate can be many, but one often cited cause is differences in organizational culture and
acculturative stress.

This thesis aims to gain a fuller understanding of how acculturation and acculturative stress are
perceived by the members of staff of an acquired firm. This thesis took a qualitative approach
with semi-structured interviews as the method of data collection. The sample consisted of four
members of staff of a firm who had been acquired part of an international acquisition.

The results showed that they perceived the acquirers preferred mode of acculturation to be more
intrusive than the one preferred by the members of staff of the acquired firm. Furthermore, the
participants expressed that the organization suffered from common symptoms of acculturative
stress, such as increased turnover among management.

Keywords: Acculturation, Acculturative Stress, International Acquisitions, Culture.

Acknowledgements
Firstly, we would like to thank our supervisor Lena Zander for her feedback at the seminars.
Secondly, we would like to thank the members of our seminar group for their invaluable
comments and feedback. Lastly, we would like to extend our sincere gratitude to our
interviewees.
Table of Contents
1. Introduction 4
1.1 Background 4
1.2 Problem Formulation 5
1.3 Research Question & Purpose 6
1.4 Delimitations and Definitions 6
2. Theoretical Framework 6
2.1 Culture 6
2.1.1 National culture 7
2.1.2 Organizational culture 8
2.2 Acculturation 8
2.2.1 Definition of Acculturation 8
2.2.2 Types of Acculturation 8
2.2.2.1 Integration 8
2.2.2.2 Assimilation 9
2.2.2.3 Separation 9
2.2.2.4 Deculturation 9
2.2.3 Preferred Mode of Acculturation 9
2.2.3.1 Acquired Firms Preferred Mode 9
2.2.3.2 Acquiring Firms Preferred Mode 10
2.3 Acculturative Stress 11
2.3.1 Acculturative Stress in an Organizational Context 11
2.3.2 Acculturative Stress and Performance 11
2.4 Acculturative Model 12
3. Methodology 13
3.1 Research Approach and Method 13
3.2 Data Collection 14
3.2.1 Sampling Method 14
3.2.2 Semi Structured Interviews 15
3.2.3 Data Analysis 17
3.3 Research Credibility 18
3.4 Research Ethics 19
4. Empirical Findings 20
4.1 Culture of the Company Before and After the Acquisition 20
4.2 Employee Retention and Satisfaction 22
4.3 Decision Making and Leadership 23
5. Analysis 25

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 5.1 Congruence of Acculturation Modes 25
5.2 Acculturative Stress 26
6. Conclusion 28
6.1 Limitations 29
6.2 Suggestion for Future Research 29
References 30
Appendix 1 Interview guide 35

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1. Introduction
1.1 Background
Merger and Acquisitions (M&As) are playing an increasingly important role in the growth
strategies of companies (Seo & Hill, 2005). During the seventh wave of M&As, recently
published statistics, show a record level of global activity in 2018, with a total of 50,874 deals,
and a total value of 3.9 trillion USD (Statista, 2019). They represent a form of external growth
where existing organizations or organizational parts are acquired (Freitag & Schulz, 2012).
Growth is one of every economic organizations’ primary goals as they face the constantly
changing market challenges (Ruess & Voelpel, 2012). Staying competitive through company
growth can occur either internally, or externally by acquiring resources and skills. M&A
transactions are generally carried out when internal growth is too limited in time and resources
needed (Freitag & Schulz, 2012). Firms have responded to the sharper competition by reducing
costs and expanding their size, often by merging with or taking over competitors (ibid). All
parties emphasize their advantages in terms of cost reduction and growth opportunities at each
announcement of a new deal of merger and acquisitions (Focarelli & Panetta, 2002). Through
M&As companies can acquire and gain immediate access to the target companies technologies,
channels of distribution and market share (Freitag & Schulz, 2012).

From the beginning, the M&A literature has focused on post-operation performance, and an
ongoing issue was the disappointment that most M&As decreased rather than increased firm
value (Bauer & Matzler, 2014). To gain a better understanding of the changes in M&A
performance, scholars have developed a special focus on how humans can impact M&A results
(Finkelstein & Cooper, 2019). M&As have proven to be an important and increasingly popular
means of achieving product diversity and growth in corporations (Nahavandi & Malekzadeh,
1988). This strategies effectiveness depends on extensive planning and careful implementation
(Iankova, 2014). Although, these operations are increasing and are undertaken by executives
with great enthusiasm (ibid).

Finkelstein and Cooper (2019) argue that strategic, economic, or financial factors seem
insufficient to understand the phenomena, reasons for M&A failure are increasingly associated
with how people within the acquiring or merging organizations deal with and respond to the
deal. Research broadly speaking in the area of organizational behavior, and to a lesser extent in

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human resource management, sociology, and psychology diagnosed a myriad of approaches
that human beings ought to have an impact on M&As overall performance (ibid).

Acquisitions often cause cultural difference between the acquirer and the acquired (Olie, 1990).
Redfield, Linton and Herskovits (1936) defines acculturation as phenomena caused by groups
of individuals with different cultures coming into contact with each other resulting in changes
in one or both groups culture. Berry and Annis (1974), defines acculturative stress as stress
linked to acculturation. According to Very, Lubatkin and Calori (1996) acculturative stress is a
major barrier for strategic change. Moreover, Very et al. (1996) found that acculturative stress
had a negative impact on the performance of an acquisition.

1.2 Problem Formulation

“[..]the combination of one plus one yields less than two” (Seo & Hill, 2005, 422). This
statement addresses the challenge for success faced by both firms, acquirer and acquired after
an acquisition (ibid). M&As in the business world are a common phenomenon, but the rate of
failure is extremely high. Although numbers vary widely, studies show that 50-80% of all
mergers do not achieve their strategic, operational or financial goals (Ruess & Voelpel, 2012).

According to Brueller, Carmeli, and Markman (2018) it is widespread among employees that
acquisitions are a disruptive activity that are usually related to work losses, structural changes,
adjustments in work practices, cultures and values and general feelings of uncertainty and
tension.

M&As seem to stay a distinctly enduring characteristic of global business and a focal point of
cross-cultural research(Gertsen, Søderberg & Torp, 1998.). The cultural dimensions of
international M&As are becoming increasingly interesting (Cardel, Søderberg & Torp, 1998).
Cultural clashes are often attributed to human resource and performance issues in M&As (ibid).
In a comparative survey of a large number of domestic and cross-border M&As, the Swedish
researchers Larsson and Risberg (1998) explore the relative impact of clashes between
corporate and national culture. Their tentative findings suggest that in cross-border M&As,
unexpected high acculturative stress, low employee resistance, and high synergy realization
may be partly explained by increased cultural awareness (ibid).

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The motivation for this thesis has been based on how acculturation and acculturative stress
perceived by the members of an acquired firm, and how did these factors change their way of
working?. This stress can lead to reduced productivity, increased personnel turnover and
reduced profits (ibid).

1.3 Research Question & Purpose

Research question: How is acculturation and acculturative stress perceived by the members
of an acquired firm, and how did this impact their way of working?

The purpose of this study is to gain a deeper understanding of how staff members in an acquired
organization perceive acculturation and acculturative stress after an acquisition where the
acquiring organization is from a foreign country.

1.4 Delimitations and Definitions

It is common that the words merger and acquisition are used interchangeably (Sarala, 2010).
However, according to Sarala (2010) using them interchangeably comes with the risk of
confusion. Hence this study will use the same definition as Sarala uses. That is, an acquisition
is when one party acquirers over 50% of the other party. In this study only acquisitions will be
included. Additionally, only international acquisitions will be included. An international
acquisition, sometimes called cross-border, is defined as an acquisition where the headquarters
of the acquirer and the acquired are in different countries (ibid). If the headquarters are in the
same country it is a domestic acquisition (ibid). This study will focus only on the perspective
of the acquired firm. Since the Swedish company was acquired in 2008 by an American firm
and it has been 11 years since the acquisition the study will only include the members of the
company in Sweden. The study will not take into account the perspective of the members
outside of Sweden, that means it will not be a comparison between American and Swedish
culture.

2. Theoretical Framework
2.1 Culture
According to Schein (2017) culture is the compiled shared knowledge of a group. The learning
forms a pattern of beliefs, norms and values that are taken for granted (ibid). Very et al (1996),
state that commonly the members of the culture are not conscious of the cultures effects on

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them. Despite this unconsciousness regarding cultures effect on peoples’ actions, it affects
essentially all interactions between different groups of people (ibid). The studies focused on the
effects of culture, or rather cultural differences, has on performance of an acquisition is
inconclusive (Reus & Lamont, 2009). Some studies show that cultural difference is a hinder
and that it is negatively related to post-acquisition performance while others show cultural
distance as a source of enrichment (ibid).

2.1.1 National culture

In international acquisitions factors external to the firm play a bigger role in the preferred
acculturation mode than in domestic acquisitions, one of these factors is the national culture
(Olie, 1990). According to Hofstede (1989), national culture determines “deeper” feelings and
values such as right and wrong, rational or irrational. Hofstede (1989) finds that that these
deeper values vary between organizations more based on national culture than more superficial
beliefs, which Hofstede calls practices rather than values. Those types of values are believed
to be acquired at a young age by the members in the organization, making them harder to
augment (ibid). National, or societal values, are shared in a society, hence similarities between
different organizations in the same society can be seen (Olie, 1990). Increased national cultural
differences leads to increased stress. Olie (1990) argue for that certain cultures are more easily
combined, lessening the acculturative stress. The subject of national culture is complex and
nations are not so homogeneous that one overarching national culture encompasses all members
of the nation (Larsson & Lubatkin, 2001).

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2.1.2 Organizational culture
Olie (1990) argue that organizational culture is not as deeply ingrained into the members of the
organization as national culture. Organizational culture is according to Olie (1990) symbols,
rituals and heroes. These define the way organization members speak and dress, social norms,
leadership styles, administrative proceedings, and who that is considered a role model for other
members of the organization (Olie, 1990; Larsson & Lubatkin, 2001). Organizational culture
plays an important role in determining organization members’ commitment, well-being and
productivity (Larsson & Lubatkin, 2001). Previously in managerial research it was common to
consider organizational culture as unanimous culture that encompassed the entire organization
(Teerikangas & Very, 2006). However, according to Teerikangas and Very (2006) new
argumentation for a multilevel perspective on organizational culture has been raised. I.e. the
culture of an organization is not necessarily the same in all levels and parts of the organization.

2.2 Acculturation
2.2.1 Definition of Acculturation
Redfield, Linton and Herskovits (1936), defined acculturation as phenomena which results in
cultural change. The change is caused by that the members of the culture coming in contact
with members of other cultures (ibid). According to Berry, Kim, Minde and Mok (1987) the
contact has to be continuous between the two groups for acculturation to occur. Berry (1997)
state that although acculturation is a neutral phrase, ie. acculturation can result in changes in
one or the other group, it is most common that more changes appears in one of the groups.

2.2.2 Types of Acculturation

According to Berry (1997) the dominant and the non-dominant group are affected with the issue
of how to deal with acculturation. Berry (1997) identify two concerns, cultural maintenance
and contact and participation. Cultural maintenance concerns to what extent the cultural identity
is deemed important by its members and contact and participation concerns to what magnitude
the group should become involved in other cultures (ibid). The acculturation can take four forms
according to Berry (1983, 1984 cited in Nahavandi & Malekzadeh, 1988), integration,
assimilation, separation or deculturation.

2.2.2.1 Integration
Integration entails that the culture of the acquired is assimilated into the new entity while
preserving parts of the culture of the acquired and acquirer (Nahavandi & Malekzadeh, 1988).

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In this form, acculturation is only partial, with a higher degree of structural assimilation than
cultural and behavioral assimilation (ibid). According to Nahavandi and Malekzadeh (1988),
integration is dependent on the acquirer granting independence for the acquired to keep beliefs,
practices and organizational proceedings.

2.2.2.2 Assimilation
Assimilation is a one-sided process, where the acquired voluntarily relinquishes its old identity
and culture to adopt the new culture of the acquirer (ibid). Nahavandi and Malekzadeh (1988)
states that, assimilation is more likely to take place in an unsuccessful organization, where the
workforce of the acquired can clearly see the benefits of the acquirer’s culture and identity.

2.2.2.3 Separation
Acculturation through separation entails keeping the two organizations cultures and structures
separate (Rottig & Reus, 2018). The acquired and acquirer will largely remain as two
organizational and cultural entities (Nahavandi & Malekzadeh, 1988). If separation is non-
voluntary, i.e. forced upon the non-dominant group by the dominant group, it is considered to
be segregation (Berry, 1997).

2.2.2.4 Deculturation
Deculturation, also called marginality, entails that the acquired disconnects from its old culture
without becoming a member of the acquirers group culturally (Rottig & Reus, 2018). According
to Nahavandi and Malekzadeh (1998), this occurs when the members of the acquireds
workforce sees no value in its established culture and does not want to be incorporated into the
acquiring organization.

2.2.3 Preferred Mode of Acculturation

2.2.3.1 Acquired Firms Preferred Mode

The preferred type acculturation is determined by the acquired and the acquirer’s attitude
towards the merger (Nahavandi & Malekzadeh, 1988). The perception of one's own culture and
the perception of the acquirer’s culture affects the preferred mode of acculturation (ibid). If the
organization's own culture is not valued or if the culture of the acquirer is seen as attractive a
more invasive mode of acculturation will be preferred (ibid).

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2.2.3.2 Acquiring Firms Preferred Mode
Nahavandi and Malekzadeh (1988) claim that the degree of multiculturalism and the degree of
relatedness of firms affect the acquirers preferred acculturation type. Nahavandi and
Malekzadeh (1988) define the degree of multiculturalism as how an organization accepts and
values cultural diversity. Organizations which values multiculturalism are less likely to institute
its own management style and culture on the acquired (ibid). The degree of multiculturalism is
also defined by the degree of different cultural groups within the organization (Sarala, 2010).
On the other hand, if the organization favors uniculturalism it will try to impose its management
system and culture upon the acquired, increasing the risk for conflict (Nahavandi &
Malekzadeh, 1988). However, some studies suggest that increased multiculturalism of the
acquirer increases the risk of conflict, due to the increased stress felt by the employees of the
acquired (Sarala, 2010). According to Sarala (2010), the stress is caused by the employees
having to deal with a conflicting and splintered culture from the acquirer. Nahavandi and
Malekzadeh (1988) also propose that “relatedness”, the similarity of the business that is being
acquired to the business of acquirer, impacts the choice of acculturation. If the “relatedness” is
high, it increases the chance that the acquirer impose its culture (ibid). This is due to that when
“relatedness” increases the possibility synergies increases, and as synergies typically demands
increased integration the risk of culture clashes increases (Larsson & Lubatkin, 2001). Sarala
(2010) adds culture preservation of the acquirer to this model. It is most common that the
acquirer is the dominant party in an acquisition, the wishes of the acquirer to preserve its own
organizational culture could lead to a more dominating mode of acculturation (ibid).
Furthermore, the attractiveness of the culture of the acquired in the eyes of the acquirer
influences the acculturation type (ibid). According to Sarala (2010), an organizational culture
which is perceived as attractive increases the chance that the acquirer will choose a less
intrusive type of acculturation to preserve the culture of the acquired.

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2.3 Acculturative Stress
Berry et al. (1987) define acculturative stress as a psychological and physiological state of being
caused by the experience of stressors with their source in acculturation. Acculturation,
originally from anthropology, is defined as changes occurring in both groups as a result of
intercultural group contact (Seo & Hill, 2005). Acquisitions researchers argued that the
acculturation process also applies during acquisitions involving the combination or imposition
of different organizational cultures (values, beliefs, or practices that define an organization)
(ibid). In addition, since organizations include individuals and groups with unique cultural
identities, organizational cultures are better described as an integrated subculture network
(ibid).

2.3.1 Acculturative Stress in an Organizational Context

During acculturation oftentimes the personnel of the acquired organization feels pressured into
conforming with the values imposed upon them by the acquirer (Larsson & Lubatkin, 2001).
Commonly this is referred to as “culture clash” or acculturative stress (Larsson & Lubatkin,
2001). Larsson and Lubatkin (2001) argue that this “culture clash” causes multiple issues for
organizations. An exodus of managers, reduced operating performance, a deterioration of
shareholder value is some of the issues that may arise in the acquired firm due to acculturative
stress (ibid). Acculturative stress does not necessarily come from a large distance in culture
between the acquirer and acquired (Very, Lubatkin & Calori, 1996). Very et al. (1996) found
in their study of European cross-border mergers that dependent on the home county of the firms
cultural distance can either increase or decrease the level of acculturative stress. Rather,
according to Very et al. (1996) acculturative stress arises when the expectations of how the
culture of the other party should be are not meet.

2.3.2 Acculturative Stress and Performance

According to Very et al. (1996) acculturative stress have a negative impact on acquisition
performance. Very et al. (1996) argue that this is due to the fact that different cultures place
different values on dimensions of culture. For example, personal and social responsibility might
be more important for a Swede than for an American who comes from a less collectivistic
culture. This has the effect that different things affect the performance, dependent on the
country and culture of the organization (ibid).

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2.4 Acculturative Model
Nahavandi and Malekzadeh (1988) proposes a model for how acculturation takes place after an
acquisition. The model is a dynamic model, meaning that the outcome of the implementation
of the merger will affect the culture of the acquired firm and the acquiring firm, which in turn
will impact the preferred mode of acculturation (ibid). A presentation of the acculturation
modes can be found in section 2.2, acculturative stress in section 2.3.

Congruence between the desired acculturation types of the acquired and the acquiring firm
reduces acculturative stress which in turn increases the chance of a successful implementation
(ibid). Furthermore, according to Nahavandi and Malekzadeh (1998) congruence can take place
even if the two cultures are substantially different from each other. In other words, it's the
consensus about the mode of acculturation that affects the acculturative stress level in the
model, not the cultures themselves.
Figure 1
The figure is an adaptation and merger of Nahavandi and Malekzadehs models in their work
from 1988 page 83, 84 and 85.

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3. Methodology
The following section contains a short discussion about research design, data collection method
as well as sections about research credibility and research ethics. Furthermore, this section
contains the chosen approaches and the justifications for it.

3.1 Research Approach and Method

This paper takes on a qualitative method. Qualitative research aims to understand a research
question as a humanistic or idealistic approach (Pathak, Jena & Kalra 2013). According to
Pathak et al. (2013) a qualitative method is suitable when the aim is to understand peoples’
interactions, beliefs and behaviors. And its key purpose is to gain insight and understanding
(Ghauri & Grønhaug, 2005). Bryman (2004) describe qualitative research as non-quantifiable
data collection, analysis and interpretation. Furthermore, Bryman (2004) add that this research
approach is appropriate when investigating multiple variables from a few entities, thus
attempting to gain a deeper understanding of the data collected and the problem studied. While
Yilmaz (2013) explain that quantitative research method refers to systematic empirical research
using statistical, mathematical or numerical data to enable the researcher to identify various
patterns or relationships of the data collected through surveys and questionnaires.

However, it has to be considered that qualitative research is commonly critiqued for inadequate
academic rigor (Gioia, Corley & Hamilton, 2012). According to Gioia et al.(2012) part of this
criticism is based in that qualitative research regularly does not justify its assertion. This leads
to doubt whether or not the assumptions made by researchers using qualitative methods are
valid (ibid). These issues can be solved, at least partly, by presenting clear connections between
the data and the concepts derived from it (ibid).

Before the collection of the data, a theoretical framework was developed. As this thesis starts
with a theoretical framework and standpoints it can be argued that the approach is deductive. A
deductive approach involves moving from a general to a particular theory, deriving hypotheses
from it, testing those hypotheses and revising the theory (Woiceshyn & Daellenbach, 2018).
The deductive approach can begin with any theoretical basis from which to deduce any number
of alternative hypotheses (ibid). Saunders (2009), further explain that a deductive approach is
theory driven and that it takes a clear theoretical standpoint that will be tested by the collected
data. If the topic is explored and theory is being developed, either with the goal to develop new

13
theory or to modify existing theory, as the data is collected and analyzed it is an inductive
approach rather than deductive (ibid). As this thesis starts with a theoretical framework and
standpoint it can be argued that the approach is deductive, not inductive. As mentioned, an
inductive approach is where the theory is a research outcome. An inductive approach draws
theories from observations or data collections (Bryman, 2004). Abduction on the other hand
can be seen as a combination of deduction and induction (Saunders, 2009). The purpose of this
study is to gain a deeper understanding of how members of staff in an acquired organization
perceive acculturation and acculturative stress after an acquisition where the acquiring
organization is from a foreign country.

3.2 Data Collection

The aim with this thesis is to gain knowledge about how is acculturation and acculturative stress
perceived by the members of an acquired firm. Therefore, five semi-structured interviews with
employees from an acquired organization were performed. All of the interviews were
performed at a Swedish medical devices firm. The firm was acquired in 2008 by a large
American based medical devices firm. The acquirer was significantly larger than the acquired
and performed several, approximately 5, acquisitions prior to the Swedish firm. The interviews
were conducted face to face except one that was also scheduled as a face to face interview, but
after sending the questionnaire via email the respondent responded via email because was not
able to answer all the questions except few, due to that the respondent started working five
years after the acquisition. Since very few questions were answered by responded and the
quality of the interview, this interview was deemed not appropriate to include in the empirical
data.

3.2.1 Sampling Method

In this thesis a snowball sampling technique has been used. Snowball sampling entails that
interviewees suggest possible new interviewees to the researchers (Pallister & Law, 2006) . This
process is then repeated until a sufficient volume of interviewees has been attained. The
motivation behind snowball sampling was to get interviews with those employees that were
working before, during and after the acquisition to get a clear picture and comparison of the
company culture after the acquisition. Snowballing as a sampling method is a common method
in the various social sciences (Kirchherr & Charles, 2018). According to Kirchherr and Charles
(2018) snowball sampling oppose traditional sampling methods where a full set of data, a
sampling frame, is first defined then a limited and defined sample is collected from this frame.
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This is due to that snowball sampling do not depend on a sampling frame at all (ibid). A
snowball sample technique is frequently used when a sample frame cannot be created due to
that the population being studied is elusive (ibid). However, critique has been directed towards
snowball sampling. Biernacki and Waldorf (1981) state that snowball samples run the risk of
becoming dependent on social networks. As snowball samples are not probabilistic samples
they can suffer from sample bias due to a surplus or lack of a particular segment of the target
population (Lindstrom, 2016). Furthermore, as there is no sampling frame it cannot be known
how the characteristics of the participants compare to those of the population (Beins, 2017).

As mentioned previously, snowball sampling was used in this paper. It entailed establishing
contact with possible interviewees that were employed at organizations that had been involved
in an acquisition. The ones that chose to participate where then asked to suggest other possible
interviewees. This was then repeated until a suitably sized sample had been attained. All the
participants that have been interviewed are from the same company that has been acquired in
the year 2008. In total four interviews were conducted, out of four interviewees three worked
at the acquired firm prior to the acquisition and were the part of the whole process, one was
employed right after the acquisition and had almost the experience of the same culture because
the culture was changing gradually after the acquisition. And one started after five years of
acquisition, and had no idea about the culture of the company before the acquisition.

3.2.2 Semi Structured Interviews

An interview is a type of verbal exchange in the interviewer, attempts by asking questions to
obtain information from the interviewee (Longhurst, 2003). Longhurst (2003), further explain
that a list of predetermined questions is prepared by the interviewer is called semi-structured
interview, semi-structured interviews unfold in a conversational manner that offers participants
the opportunity to explore issues that they feel are important.

To understand how humans make their stories significant qualitative interviews are very
flexible and powerful tool (Rabionet, 2011). In this thesis it has been decided to use semi-
structured interviews, a good reference was found to place the chosen method within the
broader qualitative framework. Recker (2013) state that semi-structured interviews have three
advantages. Firstly, semi-structured interviews are less invasive due to the fact that they allow
for dialog between the interviewer and interviewee. Secondly, semi-structured interviews offer
the opportunity to confirm previous theories and knowledge. Thirdly, as semi-structured

15
interviews resemble a conversation the interviewee and interviewer might strike up a personal
rapport making the discussion of sensitive subjects easier.

Semi-structured interviews were chosen because the interviewer wanted to ask the interviewee
to narrow down some areas or topics. A completely unstructured interview runs the risk of not
eliciting the topics or themes closer to the research questions (Rabionet, 2011). In this thesis,
some specific topics have been covered, but at the same time the stories of the interviewees will
have great importance. Therefore, a format of an opening statement and some general questions
will be used to provoke conversation. The interview questions were based on three different
areas of the warm-up questions, culture of the company before and after the acquisition,
employee retention and satisfaction, and decision making and leadership. The reason behind
choosing these three areas previous research and to find out how the members of the firm react
to cultural stress. Some additional follow up questions are also designed to test the information.
The interviews were conducted face-to-face at the company’s office, the company’s offices
where chosen as a location as it was a familiar environment for the interviewees. The interviews
were recorded with the respondent's consent, later these recordings were transcribed. The
interview guide can be found in Appendix 1, information about the interviews and the
interviewees can be found in Table 1.

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Table 1
Summary of interviews.

Participant Position Time at the Documentation Length At the Mode

company method company
before the
acquisition

A Sr. Engineer 12 years Recorded and 40 minutes Yes Face-to-face

R&D transcribed

B Project 14 years Recorded and 32 minutes Yes Face-to-face

Director transcribed
R&D

C Electrical 9 years Recorded and 23 minutes No Face-to-face

Engineer transcribed
R&D

D Production 20 years Recorded and 25 minutes Yes Face-to-face

Group transcribed
Leader

E Quality 6 years Email -- No Email

Engineer conversation

3.2.3 Data Analysis

Data analysis is a process in which phenomena are described, classified and interconnected with
the concepts of the researcher (Bryman & Bell 2015). In qualitative research, data analysis is
of vital importance as it has a major influence on the results of the research carried out (Mayer,
2015). Mayer (2015) further highlight that data reduction is part of the analysis and that it
constantly takes place during the analysis. The main objective is to reduce data without losing
information, in quantitative analysis (ibid). The recorded interviews were transcribed, after that
a coding scheme was developed. This is helpful in identifying interesting themes and aspects
in the interviews and is thus useful in the analysis and process the data into a meaningful way.
The coding scheme is developed through the division of the interview search for common
themes and key quotes. This is done by reading the transcriptions iteratively and making notes
of various categories that were then reduced to the most prominent themes. The final scheme
consists of quotes divided into certain codes of perception or codes of conduct. These codes are
then aggregated and interconnected to provide a basis for analysis and a response to the research
question.

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3.3 Research Credibility
Qualitative research approaches have become highly diverse. Reliability refers to the technique
of data collection and analysis results consistently (Saunders et al., 2009). One issue when it
comes to reliability is participant bias. Participant, or subject bias, commonly manifest itself in
two ways. Either the participant tries do anticipate the types of answers the researchers want
and adapts the answers to that or the participant adapts the answers so that the answers might
benefit themselves (Duignan, 2016).

The participants were informed well in advance about the purpose of the research to increase
the reliability and reduce the risk of participant bias, and also it’s been emphasized that they
might choose to be anonymous. The offer of anonymity was meant to increase the probability
that the participant gives truthful answers, not withholding because of risk of retaliation from
colleagues or alike.

In addition, special attention has been paid to the five P’s: "prior planning prevents poor
performance" to improve reliability (Saunders et al., 2009). Before conducting the interviews,
necessary information about the organizational setting was collected, and knowledge about
literature was gained before conducting the interviews. Validity refers to whether the findings
are what they seem to be about (ibid). To maximize the validity, pre-related practice interviews
were conducted to see the expected answers. Based on these, to avoid misinterpretation, some
of the interview guide questions were re-formulated.

18
3.4 Research Ethics
Bryman and Bell (2015) present four areas of ethical considerations regarding business
research. Firstly, harm to participants covers psychological and physical harm (ibid). According
to Bryman and Bell (2015) harm can also be damage to potential career opportunities. To
mitigate any issues regarding damage to potential career opportunities for the informants
participating in this study, all of the participants have been anonymized.

Secondly informed consent, or rather the lack of it, is a concern that needs to be considered
while conducting research (ibid). Participants of a study should be given enough information
about the purpose and the nature of the study so that they can make an informed decision
regarding their participation (ibid). To reduce any risks of issues regarding informed consent
the participants were informed about the nature and purpose of the study.

Thirdly, according to Bryman and Bell (2015) invasion of the privacy of the participants has to
be considered. Informed consent is linked to invasion of privacy (ibid). As when consent is
given by the participant the right to privacy is partly surrendered (ibid). Yet according to
Bryman and Bell (2015), participants might still feel that their privacy has been invaded and
chose not to answer certain questions. To alleviate any concerns regarding invasion of privacy
the participants were informed that they could at any time chose not to answer the questions or
end the interview.

Lastly Bryman and Bell (2015) brings up deception. Deception is defined as when researchers
present their research to participants as something other than it is (ibid). There are however
instances where it might not be possible or advantageous to reveal the purpose of the study
(ibid). This issue deception connects to the issue of lack of informed consent. Hence, the remedy
for the issue was the same as for lack of informed consent.

19
4. Empirical Findings
The research question underlying this thesis has been: how acculturation and acculturative
stress is perceived by the members of an acquired firm and how this impacts their way of
working. To explore this question four interviews with employees of an acquired firm were
conducted. The interview questions were divided into three main categories, the culture of the
company before and after the acquisition, employee retention and satisfaction, and changes in
decision making and leadership.

4.1 Culture of the Company Before and After the Acquisition

Participant A
Participant A describes the period after the acquisition as “shaky” and that the company culture
changed substantially after the acquisition. According to participant A, these changes in culture
were caused by a large turnover in combination with a change of management. One major
change was that the “closeness” the employees had to each other somewhat disappeared,
according to the participant before the acquisition “everybody knew everybody”. Participant A
states that nothing has been done actively in the acquired organization to preserve the culture.
On the other hand, the participant expresses that the acquirer has actively taken steps to augment
the culture of the acquirer, mainly by imposing their decision making hierarchy and regulations.

Participant B
According to participant B, the culture of the acquired company was “family oriented”,
however some of the family feeling has been lost after the acquisition. Participant B describes
that some of the company culture has survived the acquisition, participant B mention that the
senior staff that have been working at the acquired company a long time have tried to keep
some of the culture alive. However, the participant also expresses that it is like working in two
different companies due to the change. According to participant B the acquirer worked actively
to augment the company culture of the acquired. For instance, participant B mentions a
pamphlet being handed out to every employee during the acquisition by the acquired containing
information about the acquiring companies values and the processes.

20
Participant C
Participant C was not the part of the company before the acquisition, instead joined the company
soon after the acquisition. According to participant C the previous owner was the most
“important figure” in the company, and the final decision maker. Furthermore, it’s been added
by the participant C that the acquirer initially did not change a lot. Participant C also mentioned
that after the first few years the acquired could not deliver the results expected, after that the
headquarter sent a team to improve the R&D and production. Also, the delivery on time
products was a big problem from acquired side. Participant C describes that improving on time
delivery and sustaining excising products is good for business, but at the same time if
innovation is also an important aspect of the company that has been transferred from the
acquired to the headquarter. Participant C further explained that the company went from a “flat
management style” to a “hierarchical management style” and now the decision-making process
has become more complicated and time consuming. According to participant C having “fika”,
that is a relaxed meeting between the colleagues were not only company related issues are
discussed, was an important part of the acquire culture that has been disappeared now.

Participant D
Participant D describe the company before the acquisition as a company where they had a
“family feel”, because the families of the employees were also joining them at different events.
Participant D experiences the acquisition as a “positive atmosphere”, but also mentioned that
many people were wondering about the future of the them and the company. Furthermore,
participant D explains that the acquirer had a good message for the employees about focusing
on the development of the acquired “firm, brand and products”. Participant D also highlighted
that leadership of the site was changed by the acquirer. The top leadership was brought from
the headquarters of the acquirer. Participant D defines the acquirer as a big company a well-
organized with clear goals and with clear strategy that are predefined and considered a positive
change. Participant D did not found any culture clash except the government rules and
regulation. Participant D further added that the acquirer adopted one routine of quarterly
meeting in a big hall with all of the employees present in the meeting.

21
4.2 Employee Retention and Satisfaction
Participant A
Participant A estimates the employee turnover to approximately 25% after the acquisition. It is
the participant’s belief that this turnover was caused by the integration process which started
after the acquisition. Furthermore, the participant states that a large proportion of those who
started in close proximity to the acquisition left the company rather quickly. The same turnover
rate has not been observed by the participant among the staff with longer experience at the
company. However, the participant has observed an increase in the turnover of managers after
the acquisition. On a general level the participant expresses that her job satisfaction has not
been affected by the acquisition, and over all she holds a positive view of the work done by the
acquirer.

Participant B
According to participant B staff turnover increased after the acquisition, previous to the
acquisition the turnover was lower than what can be considered common in an organization
according to participant B. From participant Bs point of view this was caused by dissatisfaction
among the staff, mainly this dissatisfaction was caused by the lack of communication from the
acquirer to the staff regarding the vision and direction of the company after the acquisition.
Moreover, the participant explains that the strained relationship, caused by the cultural
differences according to the participant, reduced employee satisfaction. Furthermore,
participant B claims that the loss of “family feel” increased the turnover. The increased turnover
could be seen in all levels of the staff.

Participant C
Participant C mentioned that even two years after the acquisition the employee turnover was
high, stating that “every month at least two employees” were leaving. The reason was a change
in the company environment that most of them did not like it and most of the ones who left
were senior managers. Also, participant C added that most of the Swedish people do not share
the actual reason of leaving. According to participant C now it is “stable” people are happy to
work. Furthermore, participant C added that after the acquisition it was hard to keep the
employees, and new employees need time to learn things. Participant C further added that
overall the employees trust in the acquiring organization has been built up over time. Resulting
in that now the employees are rather satisfied with the new owners and the acquisition as a
whole, stating that the change has been positive.

22
Participant D
According to Participant Ds point of view some people has been “fired” after the acquisition
because the acquirer could not keep all of the employees. Participant D also adds that some of
the employees left of their own will. However, Participant D states that in his opinion most
employees did not want to leave the organization. Participant D is more satisfied at work after
the acquisition, the reasons are that clear goals, strategies, and everyone task has been defined,
which is a positive impact from him and also the same feelings have of his colleagues.
Furthermore, participant D added that he can express his opinion more now after the acquisition
than before the acquisition. According to Participant D, it is now the norm in the organization
to listen and consider issues brought up by all members of staff.

4.3 Decision Making and Leadership

Participant A
Participant A discusses work priority before and after the acquisition they were free to prioritize
their work and the owner of the business could tell them which project to prioritize, but after
acquisition it is already decided by the executive teams which project when they have to
complete first. Participant A expresses that the high turnover among the managers after the
acquisition have resulted in a decrease in work satisfaction. Furthermore, participant A added
that she had “10 managers after the acquisition” until today. According to participant A work
control has been increased because of experience at the same company. About the company
structure participant A explained that many departments has been moved to the headquarters
from Sweden, like marketing and international sales. Participant A also expresses that the speed
of decision making has been reduced after the acquisition. From participants point of view this
is largely caused by the acquirers desire to control the business which has resulted in decision
making power being transferred from the acquired to the acquirer.

Participant B
Participant B reports to the US team after the acquisition, where the leadership style is more
“responsibility and accountability” for the managers. According to participant B before the
acquisition there was only one person who was making decisions and the process was faster as
it is today. Participant B feels that the leadership style they had before the acquisition was a
better one than the one they have now. Meanwhile, participant B feel more control over her
work now than before acquisition. Participant B is project director in the R&D department and
leads her team in a mix of management style, to attain set goals the acquirer management style
23
works more, while the soft perspective also needed for motivation that is from the acquire.
According to participant B, as a leader of the team expectations are high especially on delivery
times, needed to be taken care of. As for organizational structure, participant B mentioned that
it looks the same with smaller changes, reporting style is much more as a “political organization
than matrix organization”.

Participant C
Participant C states the organization transformed from a flat management to a hierarchical
management style. According to participant C, before the acquisition the decision making
process was “faster”, but according to participant C this leads to a lot of mistakes. In an example
participant C added that if there is an urgent problem and fast decisions are needed to resolve
the issue quickly it is possible, while developing new products need to be tested and verified at
different stages that could take time but will deliver better and sustainable results, that has been
adopted after the acquisition. Furthermore, he added that it is easy now to get help from the
headquarter if needed after the acquisition. Participant C, sees this as a great advantage as he is
the only one in his role with his skill set in the organization in Sweden.

Participant D
Participant D explained that before the acquisition, the company did not have a “proper
strategy” to achieve goals, but after the acquisition now the company has clear strategies to
achieve goals for the whole year. Participant D feels more in control of his work after the
acquisition. Participant D leads the production department and feels that it’s been easy after the
acquisition to manage teams, because of clear strategies and goals, it is easy now to deliver a
clear and defined message. According to participant D after the acquisition “Lean
manufacturing and 5S” has been introduced in the company and the framework for the whole
year already set up in advance and they are more free to make impartments. Furthermore,
participant D added that the structure of the organization has been changed slowly in the
beginning after the acquisition but after a few years it has been a change in a much faster pace,
and now it has been developed more.

24
5. Analysis
As this thesis aims to study the acquired staff's perception of acculturation and acculturative
stress special focus will be devoted to the congruence of the acculturation modes as well as
acculturative stress throughout the analysis.

5.1 Congruence of Acculturation Modes

The acquirer shows signs taking active steps to augment the acquired, participant B mentioned
one example of this. The pamphlet with company values that were handed out to the staff.
Furthermore, participant A describes that the decision power has shifted to management after
the acquisition. Participant C expresses views similar to participant A and states that the
organization went from a flat organization into a more hierarchical organization. Nahavandi
and Malekzadeh (1988) states that organizations that value multiculturalism are not as likely to
impose its own management style and culture on the acquired. The pamphlet and the changes
in decision power and management style described by participant C and A. This suggests that
the acquirer was unicultural as it acted to impose its culture and management style.

Participant A expresses that staff with long experience in the company tried to keep the
organization's culture somewhat intact after the acquisition. All participants also describe the
culture prior to the acquisition in positive wording such as “close”, “family oriented” and
“relaxed”. This suggests that the members of the acquired firm valued their own culture and
that they valued the preservation of it. Moreover, participant B states that the staff with long
experience at the firm took active steps to preserve the organizational culture after the
acquisition. All this taken together implies that the organizational culture was valued by the
members of the acquired firm. As stated by Nahavandi and Malekzadeh (1988) acquired
organizations who value the preservation of will prefer either integration or separation as the
acculturative mode.

The acquirer and the acquired are in highly related, they are both in the medtech industry and
the possibilities of synergies between the two companies ought to be rather large. High
relatedness increases the likelihood that the acquirers culture will be imposed upon the acquired
(ibid). Given that the participants use positive wording regarding when referring to the acquirer,
it can be assumed that they perceived the acquirer an attractive. For instance, participant B and
D state that they are more in control now than before. Participant D also mentions that clear

25
goals and strategies have done work easier. This suggests that the acquired organization
perceive the culture of the acquirer as rather attractive.

When all these factors are taken into account, the left hand side of Figure 1 suggests that the
members of the acquired firm preferred a less invasive mode of acculturation, namely
integration. Due to the fact that the organization valued the preservation of its own culture and
saw the culture of the acquirer as attractive.

As the businesses of the firms were highly related and the acquirer took active steps to impose
their culture, e.g. the pamphlet, this suggests that the firm was unicultural. Aspiring for an
invasive mode of acculturation such as assimilation. Hence, the modes preferred by the two
parties were in incongruence.

5.2 Acculturative Stress

All participants describe that the company was suffering from the effects of acculturative stress
after the acquisition. For instance, all participants mention that the turnover of staff increased
following the acquisition. However, the participants’ perception of at which level in the
hierarchy the turnover was highest somewhat differs from each other. The participants also
differed in their views of if the employees themselves chose to leave or if they were made
redundant by the acquirer. Participant C mentions that senior managers left, participant A agrees
with that the turnover was particularly high among the managers. However, participant A adds
that the turnover also notably increased among junior staff with a short time at the company.
The situation described by participant A and C is a common effect of acculturative stress.
Larsson and Bilatkin (2001) state that increased turnover in senior management and executives
is a common effect of acculturative stress after an acquisition. Participant D however, describes
a somewhat different reason to the high turnover of staff, namely that people were made
redundant by the acquirer. It is possible that this was the case, however it should probably not
be linked to acculturative stress.

Participant D describes that the clear communication about the strategy, goals and future of the
organization acted as a mitigating factor reducing the effects of acculturative stress.

The acculturative stress could have been predicted in this case. As Figure 1 shows, when
incongruence regarding the acculturation exists acculturative stress occurs. And as discussed in
26
the previous section, the preferred acculturative modes were not the same for the acquirer and
acquired, at least not in the eyes of the staff.

27
6. Conclusion
The research question for this thesis was how is acculturation and acculturative stress perceived
by the members of an acquired firm, and how did this impact their way of working?

In this thesis it is found that the employees in the acquired firm experience the acquisition and
following acculturation in much the same way regardless of position or time at the company.
Even participants, namely participant C, who had not been a part of the organization prior to
the acquisition expressed his experience as similar to the other participants. All participants
experienced that the acquirer desired a more intrusive mode of acculturation than what was
desired by the members of staff in the acquired firm.

In the findings of this thesis, it’s been mentioned that the culture of the company was changed
very slowly with time, except the top level management that was changed right after the
acquisition by the acquirer, which also resulted in a change in the decision making process.
Three out of five participants described the company before the acquisition like a family. But
at the same time it is also found out that the acquisition had a positive impact on the company’s
business, employee opportunities, career growth and support for work from headquarters. The
decision making process became time taking but effective. All those participants who worked
before the acquisition shared the they are more in control and responsible for their work after
the acquisition.

Furthermore, the participants expressed that the organization experienced acculturative stress.
It is interesting though that participant A and C convey that senior managers chose to leave
after the acquisition. While participant B states that the staff turnover could be seen at all levels
of the organization. An increased turnover in senior management would be expected based on
Larsson and Balatkins statement that acculturative stress often leads to increased turnover
among executives and upper management.

A conclusion can be drawn that acquisition causes acculturative stress that leads the acquired
firms into culture changes and influence from the acquirer, changes in decision making style
and retention of the employees.

28
6.1 Limitations
This study is limited to one acquired Swedish firm, all the participants are from the same
company that has been acquired by US firm in 2008. Also this study is limited to the employees
that were the part of the company during the acquiring period but not the part of integration
team. Furthermore, it is possible that the ones most affected by acculturative stress has chosen
to leave the organization, as former members of staff were not a part of the sample this limits
the study.

6.2 Suggestion for Future Research

Since this study was conducted with participants from one acquired firm, for future research it
would be interesting to know about the acquiring firm strategy how they plan to cope with
acculturative stress. That will help to understand the expectation and stand point of the acquirer.
A second suggestion for future research would be to have interviews with more than one firm
both acquirer and acquired firms. That will help to understand the different experiences and
suggestions how they cope with the acculturative stress both by acquirer and acquire.

29
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Appendix 1 Interview guide

Interview Guide

RQ. How is acculturation and acculturative stress perceived by the members of an acquired
firm, and how did this impact their way of working?

Information to interviewees about the research purpose

The purpose of this study is to gain a deeper understanding of how staff members in an acquired
organization perceive acculturation and acculturative stress after an acquisition where the
acquiring organization is from a foreign country.

Interview Procedure

Estimated time 30 minutes. The interview consists of questions about, the culture of the
company before and after the acquisition, employee retention and satisfaction, and decision
making and leadership, and some follow up questions.

Data Usage

The interview will be recorded for later transcription. The names of the interviewees and the
names of the organizations they work at will be redacted from the findings.

Warm-up Questions

1. What is your educational background?

2. For how long have you been employed by your current employer?

3. Describe your prior work experience

4. What is your current position, and what are your responsibilities?

35
5. Have you held any other positions at the company?

6. Describe the business your organization is in.

7. When did the acquisition occur?

8. What happened after the acquisition was realized?

9. Describe the business of the acquirer and acquired

The Culture of the Company before and after the acquisition

10. Describe the company culture prior to the acquisition.

11. Describe the company culture after the acquisition.

Possible follow ups:
11.1 Has any part of the culture changed? If possible, please give examples?

12. In your opinion has the change been positive or negative? If possible, please give examples?

13. Has the parent company adapted any of your routines and processes that you are used to
have here?

14. Describe the culture of the acquired / Describe the culture of the acquirer? (Depending on
what organization the interviewee belongs to)
Possible follow ups:
14.1 In your opinion, what are the differences between the cultures?
14.2 Do you or your colleagues have personal experience of acquirer company?

15. Have you perceived cultural clashes due to the integration?

Examples?

16. What was seen as valuable to preserve from the acquired and the acquirer’s perspective?
Possible follow ups:

36
 16.1 What parts of the culture survive?
16.2 Have you been working actively to preserve the culture?
16.3 Have the acquirer been working actively to augment the culture

Employee retention and Satisfaction

17. After the acquisition, did you notice an increase or decrease in staff turnover at your
company?
Possible follow ups:
17.1 What were the effects after the acquisition on the staff, we there a lot of them that
left?
17.2 Why do you think more people are leaving now than before?
17.3 The people that are leaving, are they senior figures?

18. What do you think about work satisfaction been before and after by the acquisition?
Possible follow ups:
18.1 Would you say that you are more satisfied now?
18.2 Do you think this feeling is shared by your colleagues?

19. Do you feel free to express your opinions at work?

Possible follow ups:
19.1 Has that feeling changed compared to prior to the acquisition?
19.2 Do you feel that the change is positive or negative?

Decision Making and Leadership:

20. To what extent the leadership style of your superiors has changed after the acquisition?
Possible follow ups:
20.1 In what way has it changed?
20.2 Do you feel that this change has been positive or negative?
20.3 Do you feel more or less in control over your own work now than before the
acquisition?

37
21. Do you lead your team in the same leadership style after the acquisition? (Only asked if
the interviewee is in a leadership position)
Possible follow ups:
21.1 In your opinion, have actively been trying to change your leadership style?

22. How of the organizational structure, has it been changed after the acquisition?

38