THE ROLE OF ORGANIZATIONAL CULTURE IN MERGING PROCESSE

“It was a successful adquisition…because it achieved more synergies than had originally been forecast..It achieved them faster than we had forecast..it went further and faster than we had forecast…It went further and faster than we promised the market and the shareholders“ Nick Starrif talking about BP and Amoco integration.

In order to achieve that succesful a firm have to be able to create value by reconcile strategic interdepence and cohesion between both firms objectives and interests. This can be possible just if the company adjust cultural gaps.

Cultural Modifications

1. Support for a global view of business.

2. Reinforcement of ethical behavior.

3. Empowerment of employees to excel in product and service quality.

By a process of compromising, the capabilities are transferred from one company to another, with strategies to encourage integration within the process and between employees, to facilitate units of work; bringing together different values and beliefs.

Integration variables:

1.    The motive of the adquisition (reasons)

2.    The process of implementation (the way)

The acculturation process:

Describes the cultural changes resulting from the interaction of one organisational cultulture with another, can be applicated when a firm decides to work by cultural differentiation or to move organisational forces to integration.

Cases:

1.    Deutsche Bank and Bankers Trust: their key aspecto to be sucessful was creating synergies by undertaking a cultural assesment exercise in order to minimize cultural clashes; the process was based on better communication for employess to believe in the validity of the adquisition.

2.    British Petroleum and Amoco: they created a new corporate culture for the future organisation, with clear structure and boundaries about objectives and expected performance, with shared values.

3.    Volvo and Ford: each company kept working by a product differentiation in two major divisions and integration teams were created to find synergies in specific areas within the company.

According to the case studies, (in class and in textbook), what are the practical steps to minimize the feelings of uncertainty normally expected by employees, and also to facilitate the learning process to occur between the two groups of people in their process of cultural and behavioral integration?

I think the first step should be creating trust, within the group of employees of both companies, but moreover in the project both companies are following. In second step employees should be communicate and involved in the goals and objective of the process. In a third step I would situate the creation of shared values and believes.

All the steps should be manage at the same time of a coordination and a previous study of both companies in order to have a real integration and no a rupture of strategies like in the case of Mercedez and Chrysler. Managers should make accurate decisions before involved all the company in the integration process.

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REFERENCES:

1. The Role of Organizational Culture in Merging Processes. Sin Kit I. Class 2011-1
2. Alzira Salama, Wayne Holland, Gerald Vinten, 2003. “Challenges and ooportunities in mergers and acquisitions: three international case studies –Deutsche Bank-Bankers Trust; British Petroleum-Amoco; Ford-Volvo
3. Image retrieved from: http://www.sobelmedia.com/2008/12/25/2008s-top-interactive-mergers-and-acquisitions/