Mergers, spurred on by the avarice of financial advisors and the egos of company directors, have become the growth method of choice in recent years.

Yet they remain poorly understood. On the outside, the newly-merged colossi pose as robust giants with the market power and reach to strike fear into the hearts of competitors. On the inside, however, they are often turbulent with strong cultural identities fighting for supremacy.

Mergers quickly create a step change in scale, but carry with them great risks, which are compounded when the complexities of cross-border integrations are contemplated. A number of studies have, however, indicated that they rarely add to shareholder value.

DaimlerChrysler is an interesting example. The 1999 merger of German Daimler Benz with American Chrysler represented the joining of a brand (Mercedes) which had demonstrated consistent international growth and what was very much the number three US auto manufacturer. From the outset, it was clear that this marriage of equals was no such thing, with the Stuttgart headquarters calling the shots and newspaper articles pointing to stereotypical images of Germans and Americans in questioning their ability to work harmoniously.

By 2002, the Chrysler part of the company had become bloated and inefficient, with few new products. Additionally, there was a cultural problem, but not the story of arrogant German control often portrayed by the press. Indeed, it was the very failure of German executives to intervene and take control of American assets, despite Chrylser executive departures, which exacerbated problems. When their belated and hurried intervention did occur, it appeared to be too late and "typically authoritarian".

Last week, Daimler sold most of its stake in Chrysler. In a breathtaking understatement, Daimler's website described the sale of an investment which recouped $3.7bn of the original $35bn outlay as a "realignment".

But it doesn't have to be like that. Newcastle-based Sage has grown rapidly to a £1bn internationally diversified software group by assiduously making worldwide acquisitions year by year. By not biting off more than it can chew, and shrewdly mixing centralised systems with devolved management structures, it has been able to maintain its growth trajectory as one of the region's few flagship companies.

It all goes to show: mergers have to demonstrate a good strategic fit, but must also be capable of working from a cultural perspective.

* Nigel Evans is the acting dean of Teesside Business School, University of Teesside.