Cultural differences are often used as explanations of organizational problems following mergers. This paper argues that this literature is to a large extent based on a realist epistemology where too little emphasis has been placed on the constructive processes. To partially bridge this gap, this study adopts a sensemaking approach to studying the (re)construction of cultural conceptions in the merger context. The study is based on extensive ethnographic material from eight cases of Finnish-Swedish mergers and acquisitions. The analysis of this material leads to a specification of three concurrent cultural sensemaking processes through which the top decision makers involved in the post-merger integration processes make sense of and enact cultural conceptions. First, this cultural sensemaking involves a search for rational understanding of cultural characteristics and differences. Second, cultural sensemaking also includes more or less suppressed emotional identification with either of the merging sides. Third, cultural sensemaking also involves purposeful manipulation of the cultural conceptions for more or less legitimate purposes. Based on this distinction, this study leads to specific propositions concerning how cultural conceptions are formed in post-merger organizations.

Individual interactions between partners are recognized today as playing a central role in the evolution of cooperative inter-organizational relationships. Most theoretical treatments of interactions have been made at a macro-level, with reference to constructs such as trust, outcome expectations, process and outcome discrepancies, communication. Relationships are analysed at the level of organizations seen as collective actors, and their international aspects are reduced to the comparative analysis of macro-level dimensions of culture. In the past two decades, research in social science has progressively revealed the complex and multiple nature of culture and 1 identity in organizations. Surprisingly, the monolithic vision of organizational and national cultures is still dominant in the strategy field and has tended to use organization-wide or nationwide classifications (one organization – one culture / one country – one culture) and seeing top managers as the most reliable source of information on the topic. The paper suggests substantial modifications in our approach of culture and argues that the mapping and codifying of different management styles and cultural dimensions may not be enough to understand the dynamics of international business encounters. The main issue is not the existence of differences per se, but rather the way behavioural differences are perceived and interpreted by members of other

Drawing on research on the value drivers in mergers and acquisitions, as well as work on knowledge transfer in multinational corporations, we present an integrative model of the socio-cultural antecedents of strategic capability transfer in cross-border acquisitions. Its basic premise is that the impact of national cultural differences on the strategic capability transfer success in acquisitions is mediated by the degree of social integration, the ability of the acquired organization to absorb capabilities from the acquirer, and the existence of capability complementarities. Under this perspective, cultural differences can be viewed as enhancing the combination potential in acquisitions, as well as a source of social integration problems and difficulties in absorbing capabilities. Furthermore, the model proposes that the perceived attractiveness of the acquirer and the use of formal and informal integration mechanisms affect the capability transfer through their impact on the social integration of the combining organizations. It is argued that this model provides us with an overall framework through which one can better understand the linkages and causal relationships between national cultural differences and capability transfer. Future empirical work is encouraged to validate and/or refine the various testable propositions.