The articles stressed the important role culture plays in mergers and acquisitions (m&a).
Several factors regarding the cultural impact on mergers and acquisitions were evident in the information gathered from the Internet. These factors such as reward systems, operating and decision making styles, organization structure, and company values should be pre-assessed and considered when determining the viability of a m&a. Leaders of today’s global markets should look past financial and strategic synergies and focus more on the cultural impact of changing two previously independent organizations into one integrated solution. There were four main areas of importance regarding organizational culture and mergers and acquisitions:
Conduct a cultural self-assessment of potential organizations involved.
Determine cultural objectives through due diligence.
Integrate the “right” amounts of diversity from both organizations.
Actively manage the post-deal culture.
At the start of a merger, key cultural characteristics should be assessed in both organizations to choose to 1) keep the two cultures independent (coexist), 2) have one culture dominate and absorb the other, or 3) blend the cultures with surviving aspects of each remaining. The preferred method noted would be to blend the cultures together resulting in a more effective culture than the sum of the two parts. Unfortunately, in many mergers, culture combination and chemistry are mere after-thoughts. Subsequently, the initial objective to acquire the talent and benefits inherent in the “human resource” aspect of a company are lost after integration.
The Essay on Mergers and Acquisition
... organization in another country and how those risks could be mitigated. First we will we will assess the impact of mergers and acquisitions ... country. One, oftentimes there are culture clashes between the foreign firm and the home firm. These cultural clashes sometimes lead to losing ...
Because of the probable culture clashes, employees will have a tendency to fiercely hold on to their cultural norms. Human nature causes clashes to erupt out of noting and evaluating the cultural differences based on “my way” is the superior way and then attacking the other side by identifying inefficiencies. However, a fair amount of cultural debate brings positive outcomes. Cultural due diligence does not suggest elimination of cultural conflict, because diversity, to some degree, is necessary in developing the newly combined corporate culture.
After integrating the appropriate amounts of cultural diversity from both organizations, it is also important to actively manage the newly developed post-deal norm. Some suggest that culture has a bottom-line impact on corporate financial performance. By initiating ongoing dialogue and communication, the organization can maintain its cultural objective.
In summary, corporations involved in mergers and acquisitions should, at the very least, be aware of the differing organizational cultures and the inherent risks and conflicts associated with merging the two. Leaders need to look past financial and strategic synergies, to gain a better understanding of how the resulting organization will do business and the impact of these changes on the current cultural norms. Blending of cultures is preferred by taking the finest characteristics of both organizations, resulting in a better corporate culture. This is the ultimate integration test facing globally minded organizations.
