As a recent study by PricewaterhouseCoopers found, the key to successful mergers is the integration of corporate cultures, which is considered in three main aspects:
defining desired behavior;
deployment of key role models;
providing meaningful incentives.
Indeed, a simple merger of qatar phone data two companies does not yet result in the formation of a new corporate culture. The following are the features of corporate culture that hinder the effective integration of companies after a merger.
Features of organizational cultures and integration problems during company mergers:
Features of organizational cultures Integration issues
Decision-making style (e.g. consensus, top-down, etc.). To ensure full integration, decisions must be made promptly. Due to the mismatch of styles, decision-making takes longer and control over their implementation is complicated.
Leadership style (e.g. authoritarian or consultative, open or closed leadership, power distance, etc.). Changes in management style may lead to the departure of some employees who do not agree with it. These are mainly the most experienced and capable employees, who are also more inclined to change jobs. As a result, the overall qualifications of the staff decrease, which can significantly weaken the positive effect of integration.
Attitude to change (e.g. willingness to take risks by giving up satisfaction of current goals). When a team is not sufficiently prepared for change, employees begin to resist the implementation of new projects and refuse to solve the problems that accompany any integration.
Features of interaction (e.g. based on formal structure and definition of roles or based on informal relationships). If there are significant discrepancies in the order of interaction, it becomes more difficult to establish a stable work process. Ultimately, the idea of integration does not find support among the staff, and accidental or deliberate breakdowns are possible.
Understanding of “personal success” (for example, whether there is a focus on individual “stars” or whether effective teamwork is important). The lack of a unified position can hinder the performance of work. Some will put effective interaction with colleagues first, while others will strive to demonstrate personal achievements. As a result, mutual dissatisfaction will begin to grow, and team cohesion will disappear.
The development of corporate culture after the merger of companies can be carried out in one of three standard directions:
"Diffusion"
This option involves the complete integration of the culture of one company into the culture of another. This usually happens when, as a result of the acquisition of a company, it becomes an integral part of another business. Here, any differences in cultures have a negative impact.
Many Western corporations, which pay great attention to preserving their specific cultures, also act in a similar way. When using this approach, the work will be carried out in accordance with the program of cultural transformations of the acquired company.
An example of “diffusion”: the merger of Raiffeisenbank and Impexbank.
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"Dispersion"
With this scheme, existing cultural features are fully preserved, and after integration, the coexistence of two or more subcultures is observed. This option is suitable if the companies being merged differ greatly in their areas of work (say, they belong to the b2c and b2b segments) and it is important for them to rely on established cultural values for successful operations.
Using this approach, the culture should be developed in the direction of strengthening the distinctive features of each segment and helping businesses to establish high-quality interactions.
An example of "dispersion": the acquisition of the Russian company Kalina by Unilever.
"Synthesis"
This means creating a new culture based on the distinctive features of previous cultures, along with new values that may not have been previously characteristic of either company. This method is appropriate if the merged company is expected to develop in a fundamentally different direction compared to those that took place before the merger. Such mergers are characterized by rebranding and the establishment of a new system of values.
An example of “synthesis”: the merger of Rostelecom and Svyazinvest.
"Synthesis"
Source: shutterstock.com
A specific scenario should be chosen based on the current situation. It is recommended to eliminate cultural contradictions in the shortest possible time due to the long duration of the complete transition to a new culture.
Here are some useful tips to help you implement cultural changes correctly when managing company integration: