Most HR Managers and strategic planners argue that people are the most important part of any organization. When two companies merge and incorporate a group of people with differing cultures and identities, many companies find it difficult to change the culture and identity one company has relied on for so long in a way that allows for integration of the bidding company's organizational culture (Daniel & Metcalf, 2001). Conflict always arises in mergers and acquisitions, but cultural conflict is often more prevalent when M&as involve international trade and relationships. To help manage cultural differences, each company must focus on collaborating with one another to discover the similarities and differences that exist between the firms becoming one. The Human Resources Department has a leading role in strategic planning for organizational diversification in these cases, and can severely limit the risks associated with merging divergent cultures by working diligently to promote an environment of open communication, understanding and shared goals and objectives (Daniel & Metcalf, 2001).

Collier (1993) notes that opportunities for "increased size, strength and diversity for cooperatives" are virtually infinite when mergers occur with due diligence (p.4). What this means is to minimize risk, companies have an obligation of performing "due diligence" or assessing what the risks are of working with international firms and assessing whether the risks outweigh the benefits.

Conclusions and Analysis

There are many costs and benefits associated with mergers and acquisitions. As M&as have become increasingly commonplace, it is important for owners and strategic partners to fully assess the risks and benefits associated with such transactions....

Transfer of ownership to a company can create an environment filled with opportunity and may result in increasing revenues for the merged entity. In some cases however, there is the risk that an M&a will result in a corporate structure that is too large, too diverse and inefficient at operating on a conservative budget (Collier, 1993). This is where the concept of due diligence arises, where companies must assess the risks, benefits, costs and implications of a merger or acquisition before initiating one. Hostile takeovers are most likely to result in unsuccessful ventures where diversification leads to disgruntled employees and poor performance.
Communication and understanding lie at the key to every firm's success. This is true whether a firm operates independently or whether a firm acquires another through mutually agreeable or beneficial assessments. Given modern trends, it is likely that firms will continue to engage in M&as, both domestically and internationally. If executed with attention to detail, people, customers and intent, there is much evidence that such actions can lead to greater value and shareholder benefits.