Merging Organizational Culture

Mergers and acquisitions have a unique potential to transform firms, and to contribute to corporate renewal (Angwin, 2001). They can help a firm renew its market position at a speed not achievable through internal development (Haspeslagh and Jemison, 1991; Harrison, 2002). Attempting to merge two organizations with distinct values and beliefs could result in a cultural collision that threatens the success

of an otherwise strategically compatible merger. Throughout a merger or acquisition, people in an acquired company often complain that they don’t know what is happening, express fear about losing their jobs, and feel demoralized as to the future of their contributions.

Mergers and acquisitions immediately impact organizations with changes in ownership, in ideology, and eventually, in practice. Of the three root strategic assets noted above, cultural cohesion is most often the critical asset in the eventual success or failure of the overall deal and the one that impacts the extent to which qualitative talent retention can be attained.

Despite the fact that it is increasingly common these days for companies to publish their cultural traits or values, what is listed does not always reflect the actual culture of the place. Anthropologists have long known that the task of learning about a specific grou

p’s culture does not start by asking members themselves to identify the specific traits. In fact, cultural traits are not readily identified by the members of a social group. Understanding the depth of cultural influences that are practiced over time within a specific group or organization requires long periods of reflective observation and the formation of key questions about beliefs, disciplines and innovative problem solving strategies.

Challenges:

1. Create a positive atmosphere: The impact of cultural differences in international mergers and acquisitions can be minimized when the buyer firms take the time to create a positive atmosphere for capability transfer before initiating any actual consolidation of human and physical assets. The creation of an integration team who studied the

2. Strategic interdependence and Organizational autonomy: The need of strategic interdependence and the need of organizational autonomy vary between the uniqueness of each acquisition process. New ideas are going to be implemented and old ideas challenged, a new organizational culture is going to be gradually emerging which will reflect in performance and profitability of the new firm.

3. Cooperation: Appropriate integration strategies implementation can facilitate the learning and acculturation process resulting in minimizing the uncertainties at work place and increasing the willingness to cooperate and to be part of a new culture entity.

Opportunities:

1. Acquisition of new competencies and knowledge: This is an important motive behind the firm’s cooperation and can be an important and desirable by-product of their collaboration. Always when there are firms willing to merge, one of the main reasons is the opportunity they have to acquire new knowledge and the development of new strategies in order to become much more competitive in the international markets.

2. Developing new Competitive Advantage: If learning is an important source of competitive advantage, then firms who accumulate skills and knowledge appropriate to their environment will outperform and will do better than those firms who don’t.

References:

• Alzira Salama, Wayne Holland, Gerald Vinten, (2003) "Challenges and Opportunities in Mergers and Acquisitions: Three International Case Studies – Deutsche Bank-Bankers Trust; British Petroleum-Amoco; Ford-Volvo", Journal of European Industrial Training, Vol. 27 Iss: 6, pp.313 – 321.
• http://www.kfunigraz.ac.at/iimwww/iimwww/orgculture.pdf
• http://gbr.pepperdine.edu/041/mergers.html
• http://1-focus.com/sustainingchange/merger-excellence
• http://impeccabile.net/a_o_p_pages/merg_acqui.html