Managing Change in Organizations

Managing Change in Organizations

We will like to start with some facts to show the importance the importance of managing cultures in the organisation and how lack managing changes could haunt back the companies in terms of mergers and acqusions.

The challenges to merge, and so change two organizations is so huge and it always requires a lot of resources and the right people. According to Business journal ’The successful merging of cultures is difficult, traumatic, and crucial. Individuals and companies with different histories, values, expectations, and beliefs are asked to adopt a unified perspective and to serve as a cohesive unit. This is made more difficult by the fact that in almost any merger situation there are perceptions of “winners” and “losers” as well as fear and uncertainty regarding the future.

The stakes involved are great. Quite simply, mergers often fail, and culture clashes are a key reason for that failure. One 10-year study of 340 major acquisitions found that total shareholder returns for 57% of the merged concerns lagged behind their industry averages three years after the merger (Lublin & O’Brian, 1997). Other studies conclude that over 60% of mergers fail in their intended purpose (Carleton, 1997).

And according to New York Times or the Wall Street Journal clearly demonstrates that success in merging cultures (that is, in preventing “culture clash”) is critical to positive merger outcomes. In fact, many management experts cite culture clashes as the primary cause of merger failures (Lublin & O’Brian, 1997). Several recent mergers have suffered from culture clashes. For example, success of the merger of Harty Press, an old-line printer, and Pre-Press Graphics, a high-tech desktop publishing concern, was jeopardized by a severe culture clash (Welles, 1994). Culture clashes following the merger of Boeing Co. and McDonnell Douglas have thrown Boeing off course, with its stock well below pre-merger levels (Bernstein, Reinhardt, & Browder, 1998). In similar fashion, the $4 billion acquisition of Santa Fe Corp. by Burlington Northern, the largest in history when it was completed, has become one of the industry’s most disappointing, in large part because of unanticipated cultural gaps. Many other culture-related merger disappointments could be cited.

Then its so clear that managing culture is so important and in this paper we will discuss why managing change is so difficult and why there is always resistance to it. We have to note that employees do not always welcome change and there are the main hindrances as shown many studies conducted over the years.