Bower (2001) identified five different kinds of mergers: the over capacity M&A, the Geographic roll-up M&A, the product or market extension M&A, the M&A as R&D and the industry convergence M&A. According to Bower (2001) definition the merger between Southcorp and Rosemount will fall some in to third type of merger i.e. the product or market extension type. He identified major areas of concern in different types of mergers. For the product or market extension type the major concern is cultural or governmental differences. While Southcorp was an archetypical Australian wine firm linking vertically along the value chain with major focus on production and less focus on marketing, Rosemount was actually a family business, focusing on sales and marketing only and majorly outsourcing other functions. This difference of working culture can be compared with the one faced by Daimler and Chrysler, both very performing firms prior to merger but failing miserably after the merger (Weber and Camerer (2003).
Culture can be defined as the set of commonly shared and important assumptions in a community”. As an organization is also a community of members i.e. employees, etc the set of commonly shared assumption held by members of the organization, can be called as organizational culture. Chatterjee et al (1992) claim that culture affects practically all aspects of the way people of a group interact with each other.
There are diverse views on the relative importance of cultural integration, during or post merger, for the success of the merger. Some authors have undoubtedly favored that the cultures of the merging entities need to be integrated to achieve merger goals, while others have considered them as either partially or not important for merger success failure.
Cartwright and Cooper (1993) argued that since culture is as fundamental to a company as