MERGERS AND ACQUISITIONS
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A merger (although used together with the name Mergers and acquisitions), sometimes confused and resembled to an acquisition, means that two existing companies decide to go forward as a new company, sometimes taking a new name or probablly combining both of their names into one, cool name.
In todays blog entry, I would like to talk about the positive and negative impacts that merging processes can bring to the already established corporate culture. Why? because besides from analyzing hows the process of mergers done, what it consists of, what does each company have to do, and so on, I think that it very important to analyze it from the humain point of view: what happens to a culture already present? how do people from each TEAM react? what are the consequences? These aspects are important to understand because people are a company´s most important asset.
Positive Aspects:
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- Cultural synergies: given that a merger can consist of many cultures and subcultures, advantages could be taken from this aspect; taking advantage of the best things prominent from each culture could translate into a synergy that can take the proper pace of the company.
- Learning and growth: people (especially those involved in international commerce) can learn from their new partners through proper integration; new ideas, religions, beliefs, habits, and so on can be learned from one culture to another, giving people the space to interact and learn from others, and possibly seek alternatives to their own culture.
- Diversity in management: a wide variety of people could be very positive to managemente because different ideas, different concepts and strategies can be analyzed by a new formed team. Similar to the synergies, management can take the best out of each culture (that is, through its employees) and find a way to apply it to business.
Negative Aspects:
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- Frustration on the employees: a clash of cultures, a bad integration or the lack of appropriate training can lead employees from both sides to be frustrated and upset with their new jobs. Frustration then leads to bad performance, lack of motivation and underachievement. This translates to the company as less productivity and efficiency.
- Organizational proliferation: a clash can occur when hierarchy is set on the table; people coming in from a culture where a sense of hierarchy is VS. people who sense it is low can create tension and arguments.
- Hosfstede´s cultural dimensions: as we saw in intercultural management, each culture has its own grades in the 5 dimensions proposed by this scholar; when 2 companies decide to merge, they generally come from different countries (so, they have different cultures) and this is where problems happen without proper training. Space isn´t defined properly, time isnt respected at all, lack of emotion or excess of it is displayed, and so on.
Bibliography
- Ridhawn Foundation, 2011. A. H. Almaas. Accessed on 06/04/2011. http://www.ahalmaas.com/Glossary/n/negative_merging.htm
- Gitelson, Gene-Bing, John W.-Laroche, Lionel, 2001. The impact of culture on M&A´s. ITAP International. Accessed on 06/04/2011. http://www.itapintl.com/facultyandresources/articlelibrarymain/the-impact-of-culture-on-mergers-a-acquisitions.html
- Appleton Grant, Elaine, 2008. First, the merger. Inc.Accessed on 06/04/2011. http://www.inc.com/magazine/20080101/first-the-merger.html
- Wolgemuth, Liz, 2008. Culture shock! How to survive a merger. USnews. Accessed on 06/04/2011. http://money.usnews.com/money/careers/articles/2008/03/31/culture-shock-how-to-survive-a-merger
- Recklies, Oliver, 2001. Mergers and corporate culture. Recklies management project GmbH. Accessed on 06/04/2011. http://www.themanager.org/pdf/Merger_Culture.PDF
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