Cultural differences in a merger
We live in a world full of differences. Differences in gender, age, ethnicity, religion, education, culture and many more other aspects of life. For example, in the Netherlands, 16.9 million people live on 33.8 m2 with 190 different nationalities, 189 different cultures and 7 different generations (CBS, 2014). This diversity logically is also apparent in today’s business life and provides unique challenges and opportunities in the workplace (Kappoor & Solomon, 2011).
The intensifying globalization and its consequentially increasing ethnical-, cultural- and gender diversity turn scholars’ attention to the management of cultural differences (Cox & Blake, 1991; Fullerton, 1987; Johnston, 1991). Cox & Blake (1991)
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Defendants of the theory suggest that these differences have to be taken into account at an early stage in the merger process to tackle possible barriers right away. This model believes that the level of cultural compatibility between the units to be merged determines the success of the integration process (David & Singh, 1994; Morosini & Singh, 1994; Cartwright & Cooper, 1996; Javidan & House, 2002). It derives its conclusions from the development of the cultural differences which are apparent at the pre-merger stage, into the post-merger integration results. Scholars Cartwright and Cooper, significant defendants of the cultural fit perspective, argue that the cultures of the merging parties should be similar or adjoining in order to integrate them successfully. The authors explain that if there is an equal deviation of power, the units involved in a merger should adapt to each other’s culture and ultimately create a coherent third culture to overcome the differences. However, since organizations inherently strive to retain their own culture, mergers between culturally divergent units are argued to result in major integration …show more content…
The trustees have reduced the organization to the extent necessary for the settlement of the bankruptcy. The loan portfolio in the Netherlands is not sold and therefore, all services of the bank have continued since the bankruptcy, except that the bank does not advise, close new contracts or initiate new loans, nor offer pay services. Company A currently loans more than €5 billion, of which €2 billion is securitized, to over 100.000 customers. There are still approximately 100 employees active for the bank. The interest repayments which Company A receives on the loan portfolio are used to pay costs and remittances to organizations who manages the securitizations and pledgees. What remains is be paid to creditors. To date, the trustees have paid out 74% to creditors. No additional distributors are expected for the coming five years. Each quarter, the trustees report on their activities. The trustees also publish an annual financial report each subsequent
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.
Organizational culture is key in project management and in any merge process, as it will dictate the parameters in which an organization preforms. In the case of Honicker and its merge process, organizational culture has a tremendous importance, as it regulates the way in which this organizations execute in regular basis and how they interact with their clients and stakeholders. Schein (2010) stated: “culture is an abstraction”. It can be argued then that even when companies are working in the same market, the way in which they actually do business might (most probably) be different. In any merge process organizational culture plays a pivotal role as it might signify the success of complete failure of the process. Honicker appears to be a mature organization in project management; nevertheless, the other four companies, along with their PM immaturity, possess cultures that showed little commitment to Honicker’s goals (which after the merge were their goals as well), a different teamwork approach, and a selfish engagement to the “common” endeavor. One of the main reasons why this situation happened was because of the different cultures that characterized each organization. If these cultural issues continue, the merge is most likely to end up being a failure, as the acquired organizations will not be able to perform in accordance to Honicker’s standards and
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:
Cultural differences plays a huge role in growing and sustaining a business. It helps companies understand different cultures to provide greater services not only to their customers but a greater work environment for their employees. Some aspects include gender, race, nationality, religion and age group. (Seymen 2006) proposed that values and morals each individual hold have influences on behaviours and ideas in different scenarios. According to (Bateman and Snell 2012), there are many advantages towards the organisation in terms of better market connections, improved international competition, multiplicity points of view and a better team performance.
This report will address three fundamental themes of intercultural comm-unication: stereotyping, discrimination, prejudice, essentialism, and their func-tions in every day life, relativism and ethnocentrism as a role in worldview, and the rapid increase in cultural diversification around the world. Gender and sexuality are not deemed relevant to the case at hand, and will not be exam-ined in this report.
Today, we were called into the boss’s office and told that our company was about to go through a major restructuring. In two weeks, the organization will be merging with a national conglomerate and it is our job to get the “troops prepared”, as she put it. She stresses to us the importance of effective leadership and communication. She would like for us to establish and initiate a plan that will help the employees with the transition. Luckily for us, we just completed a seminar on organizational behavior and we know exactly what needs to be done to make this transition as positive and seamless as possible.
This study aspires examining and learning cross- cultural differences in management. There are parts in management whereby dissimilarities concerning attitudes, behaviors, performance, communication matters and cultural inferences can be realized. Cross-cultural dissimilarities shoot from the diverse backgrounds of each culture. Cultural diversities may be countersigned in organizations, and there are additional influences presented such as attaining sales targets, encountering goals, functioning on compact budgets and that can result in disagreement and struggle. Because of the dissimilarities in cultures, there might always be certain misinterpreting between people that work in the same workplace since they have diverse standards,
In conclusion mismanagement and culture clash can be described as the barriers of entry to a global environment, to a large extent culture clash which is known as differences in corporate culture is more of a risky barrier than the mismanagement because culture clash in general can lead to mismanagement. Therefore we conclude that, “ mergers are tricky; the benefits and costs of proposed deals are not always obvious”
In an article “A framework for the human resources role in managing culture in mergers and acquisitions, Mitchell Marks and Philip Mirvis shows the importance of “cultural endstate” as a framework to guide the company’s transition. They highlight four types of distinct cultural endstates—Pluralism, Integration, Assimilation and Transformation (Marks & Mirvis, 2011). What they mean by “cultural endstate” is the company’s new direction post the merger. Using the framework, this essay attempts to analyze the strategy to address issue of resistance to change due to merger and acquisition.
“The basic concept of managing diversity accepts that the workforce consists of a diverse population of people. The diversity consists of visible and non-visible differences which include factors such as sex, age, background, race, disability, personality and work style. It is founded on the premise that harnessing these differences will create a productive environment in which everybody feels valued, where their talents are being fully utilised and in which organisational goals are met.”
It is a need to recognize the differences in a global multicultural environment and learn to use them to one’s advantage, rather than either attempting to ignore differences or simply allowing differences to cause problems. Manager should learn to have basic respect towards the diversified workforce to maximize contribution.
Understanding how organizational and national cultures relate, analyzing and identifying cultural similarities and differences, and addressing potential cultural conflict is crucial to the pursuit of cross-cultural harmony within an organizational environment. Cross-cultural harmony is essential to prevent misunderstandings, disagreements, and other types of conflict in the workplace. Organizational culture is highly impacted by national cultures, incompatibilities will not only result in an increased complexity of organizational management, but may also result in actions and behaviors contradictive to the organization’s mission and goals.
Understand and heed cultural differences - cultural variables in transacting international business. (1991, January 28). Business America. FindArticles.com., Retrieved March 20, 2009, from http://findarticles.com/p/articles/mi_m1052/is_n2_v112/ai_10412261/pg_4?tag=content;col1
Our world is constantly changing and it requires a society that is well versed in understanding the problems deriving from culture differences and tolerance of one another’s beliefs and perceptions. We are dealing with systemic problems in education, economic, government, religion and culture differences.
According to Lavaty and Kleiner (2011) the most crucial term affecting workforce in the 21st century is an increase in cultural diversity and therefore it never should be ignored.