Organizational culture relates to a system of shared values, beliefs, and assumptions, which direct how people behave in organizations. These shared beliefs have a major influence on people in the organizations and dictate how they act, perform their duties, and dress. As such, organizational culture also impacts the change management process as it determines how people will respond to the change (Briody, Pester, & Trotter, 2012). The recent years have seen many companies and businesses engage in mergers to enhance their competitiveness in the market. The success of these mergers is largely dependent on the resulting firm’s ability to integrate cultures from both companies forming the merger. Cultural clashes often lead to problems in the management process and in most cases, if this is not addressed, the merger ends in failure. Sprint/Nextel merger is a perfect example of a merger that did not survive as a result of cultural clashes (Woodsworth & Penniman, 2013). This paper assesses the impact of culture with the merger between Sprint and Nextel and how to give recommendations on what organizational leaders could have done to create unified strong culture for the organization.
Sprint/Nextel Merger
…show more content…
While portrayed as a merger of equals, the resulting firm did not survive for long, as the two companies ended their relationship in 2013 (Yellin, 2010). Leaders in both companies had hoped to use the merger to improve their competitiveness, specifically, their ability to provide the best products and services to their target consumers. However, this goal was not realized as the two companies failed to integrate their operations and cultures leading to mistrust and insubordination. At the center of the failure, differences in organizational culture have been highlighted as a major factor that contributed to the collapse of the merger (Gale,
In the year of 2005, the companies eventually found a way to make it easier for the companies to combine without having any major issues or problems. Unfortunately, around the year of 20010 the merging com...
Each organization big or small has its own values, ways of doing things and assumption that it operates in. The principles and ethics that exist in each of these companies are the baseline through which the company operates its affairs. This is what can be called as that organization’s culture. The culture in existence has an impact on the productivity, effectiveness and efficiency (Keyton, 2011). The basis of setting the most appropriate culture of a company is not only to move or increase the profitability but also to make the stakeholders happy and satisfied. One aspect of that is the employee or the human resource the firm who put their expertise in the firm and add a bit of creativity and innovativeness to move the products. Chick-Fil-A operates in a competitive industry thus it requires all the stakeholders.
Leadership succession in a merger of equals is an article, which examines the implications of leadership succession in an extreme form of mergers, a merger of equals, can yield important findings to better understand what allows some mergers to succeed while others fail (Cheng, 2012). Mergers and acquisitions are much more common these days and only a few of them end up being successes. Even though mergers and acquisitions do not result in much success rate, many organizations still prefer it because, it is used as a cooperative strategy but nowadays it is used for cooperative development. Cultural differences and merger integration can be considered as an important factor in the failure rate, but this study mainly focused on the choice of leadership succession and merge of equals. Mergers of Equals Mergers of equals is the combination of two organizations of similar size to form a single organization.
A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate clinical and managerial interventions.
Before granting merger forms The Bureau of Competition was committed to ensuring that involved companies do not create a monopoly in the market and hence reduce competition that may also affect the integrity of the services provided. In most cases the bureau controlling the start and the running of mergers uses the Hart-Scott-Rodino amendments to the Clayton Act (Clark, 2011). Before becoming a part of the merger it is important that FTC does an analysis of the merger to evaluate the effects the merger may have on the businesses. In addition, it is important that FTC gets to have a clear picture of the situation and how it is expected to affect the relations...
Organization culture is the matter that holds a company intact. This is what makes each company stand out from one another. Organizational culture is also what makes employees want to retain employment with a given employer and have a sense of pride in the work that they do. I believe that AT&T is a company who invests a lot in to their employees. According to the company’s career website, AT&T has been named: "America's Most Admired Telecommunications Company" by Fortune magazine nine out of the last 11 years and "World's Most Admired Telecommunications Company" eight out of the last 10 years.
The culture of an organization can simply be defined by its core values, traditions, and beliefs. For over 45 years Southwest Airlines has been successful. Its success has been attributed to a value system that tasks managers with the responsibility
The soft factors can make or break a successful change process, since new structures and strategies are difficult to build upon inappropriate cultures and values. These problems often come up in the dissatisfying results of spectacular mega-mergers. The lack of success and synergies in such mergers is often based in a clash of completely different cultures, values, and styles, which make it difficult to establish effective common systems and structuresBased on the case study, extensive research and annual reports of AT&T the writer has mapped AT&T in the different domains. AT&T should strive to attain a perfect circle as close to the centre as possible, which indicates total synergy, order and equilibrium. Where the circle is skewed drastic change is needed as it moves closer to the outer ring of chaos:
Organizational cultural is the system of shared beliefs and values that develops within an organization and guides the behavior of its members, while organizational structure is an expression of social and economic principles of hierarchy and specialization (Kinicki, 2015). Both the culture and the structure of an organization are important things for management to understand in order to successfully set and achieve an organization’s goals. Companies who excel in highly competitive fields can attribute their successful economic performance to a cohesive corporate culture that increases competiveness and profitability. This culture is best utilized in an organization that has the necessary structure to allow its employees to coordinate their
Firstly, the need for achievement is met by understanding that people strive to master difficult situations, endeavors or challenges. This idea works on both an organizational level, as well as an individual level. From an organizational level, it is well known that a merger of this magnitude had never been attempted. With that brings a great challenge to succeed, and lets the leadership work in new and innovative ways to make such a merger successful. McClelland’s theory states, in regards to need for achievement, that people strive “To excel one’s self…to rival and surpass others… to increase self-regard by the successful exercise of talent” (Kreitner & Kinicki, 2010, p. 215). By this definition, the merger would motivate leadership to excel in the face of a challenge, and to increase their professional self-regard in their success in doing so. On an individual level, you are asking the performers and employees to recognize both economic and social climates, and to come together in action to save both their careers, as well as their passion in life. Such a merger would only embolden self-worth and perceived achievement, because they would be part of a much larger organization more adverse to risk and future change, and they would easily be able to look at other similar organizations and realize they were part of an organization who accomplished something never before attempted.
As the world is changing at an incredible pace (Kotter & Cohen, 2002b), the way leaders approach change varies widely (Black & Gregersen, 2008). No organization is immune from the impact of globalization. Organizations must increasingly cope with diverse cross-cultural employees, customers, suppliers, competitors, and creditors. In its infancy, a business culture reflects the characteristics of the organization’s most dominant personality, the leader (Bohl, 2015). The leader’s vision of what the business culture should be is often a cultural paradigm in their heads, based on their experiences in the culture in which they have grown up in (Schein, 1983). Culture is an abstraction, yet the forces that are created in social
BR was sold to Delta Foods in 1996 for US $2 billion. At this time, it was one of the largest fast-food chains in the world generating sales of US $6.8 billion. DF purchase of BR brought in a new cultural paradigm. DF is an individualistic, aggressive growth company with brands they believe are strong enough to support entry into new overseas markets without the need for local partnership. The DF strategy is one of direct acquisition and JV’s were not part of their strong suit. DF strategic implementation is based on hiring local managers directly or transferring seasoned managers from their soft drink and snack food divisions. The DF disdain for JVs is clearly reflected by their participation in only those JVs where local partnering was mandatory (e.g. China) to overcome regulatory barriers to entry. JVs had been the predominant strategy for BR which was unlike the DF outlook. Terralumen’s strategy was misaligned and out of sync with the DF strategy. This was unlike the complementarity that existed with BR’s strategy. This misalignment began to affect the JV relationship that had worked well with BR in the initial years. The failure of Terralumen and DF to recognize this fundamental cultural difference between their operational strategy styles i.e. Individualistic and Collectivism leads to their inability to proactively create steps for better alignment in the early period after acquisition, creating uncertainties and difficulties for both corporations. There is a lack of communication and virtually absence of trust between two new partners. DF appeared to be flexing its muscles in the relationship and using a more masculine approach compared to Terralumen’s more feminine approach. Both the corporations are strategically involved in a complex situation where they appear reluctant to address the issues at stake and move ahead together. The DF strategy of
Creating a strong and collaborative corporate culture, especially in an organization with a diverse workforce, requires a proactive strategy. The challenge is heightened in this case, where an acquisition has created a collision of cultures and generations. Three interventions that could be used to promote a unified culture include mutual mentoring, knowledge management to transfer knowledge, and a detailed communication plan. The organization could use job satisfaction and work-life balance surveys along with key business performance indicators to determine its progress towards creating a unified culture. While the task is a challenging one, these interventions may prove that the melding
The primary research and research done afterward was evident enough that the countries have different cultures and those cultures impact the standardization of way of work within the large organizations. The examples quoted by Hofstede demonstrate the difference of cultures among different countries. These areas were overlooked before by other researchers and practitioners but these were the main factors to consider. According to a KPMG study, "83% of all mergers and acquisitions (M&A 's) failed to produce any benefit for the shareholders, and over half actually destroyed value. Cultural preferences have been identified as an often overlooked barrier to the effective implementation of mergers and acquisitions. In the following the four factors are briefed in
Organisational culture is one of the most valuable assets of an organization. Many studies states that the culture is one of the key elements that benefits the performance and affects the success of the company (Kerr & Slocum 2005). This can be measured by income of the company, and market share. Also, an appropriate culture within the society can bring advantages to the company which helps to perform with the de...