THE ROLE OF ORGANIZATIONAL CULTURE IN MERGIN PROCESS

THE ROLE OF ORGANIZATIONAL CULTURE IN MERGIN PROCESS

Organizational culture:

A pattern of basic assumptions that are considered valid and that are taught to new members as the way to perceive, think, and feel in the organization. Is an idea in the field of organizational studies and management which describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. It has been defined as "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization

Mergers and acquisitions (M&A) is a corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity

Integration process:

is the real source of value creation in acquisitions, it value could create through: economy of scale, economy of scope, increased revenue or market share, Geographical or other diversification and resource transfer

Merging: implies the reconstruction of a new social identity

The success of a particular integration strategy depends primarily on:

• The manager’s ability to reconcile the need for strategic interdependence between the two firms.

• The need for organizational autonomy

• The existence of cultural fit.

Given the current business environment, managers may want to focus on three particular 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.

According to the case studies, 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?

The cases studies demonstrate that the impact of cultural differences in international merging and acquisitions can be minimized when the company that buy the other company takes the time to create a positive environment before initiating any actual consolidation of human and physical assets . also appropriates integration strategies implementation can facilitate the learning and acculturation process resulting in minimizing the uncertainties in the work place and increasing the willingness to cooperate and to be part of a new cultural integration.

References:

Alzira S., Wayne H., and Gerald V. (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, p. 313-321.

Salama, Alzira, Wayne Holland, and Gerald Vinten. "Challenges and opportunities in mergers ans acquisitions. ." Journal of European Industrial Training 27 (2003): 313-321. Prin

Nelson, D and Quick, J.C. (2009) Organizational culture. In Organisational Behavour: Science, the

real world and you.