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What is merging of culture?
It means that you’re gaining another company’s assets, expertise, or customer base. It also includes its workforce and with that, its culture. It’s naïve in the extreme to think that you can get one without the other. Since you’re acquiring another culture, it’s important to think through how you will merge the two.
What is merging organizational cultures?
The four main strategies for merging different corporate cultures are assimilation, deculturation, integration, and separation (see Figure below). Assimilation Assimilation occurs when employees at the acquired company willingly embrace the cultural values of the acquiring organization.
Why is merging cultures important?
Your culture has a significant effect on your company’s decision-making and leadership styles, its ability and willingness to change and adapt and its beliefs regarding what success looks like. It also sets the stage for how people work together.
How do you combine cultures?
Leaders in merging companies can establish a clear, structured culture by following these action items:
- Create a fact base and a common language:
- Set the cultural direction early and use it to support the deal’s goals:
- Align the top team around the planned cultural direction:
What problems can occur with mergers?
Overpaying Without question, the most common problem that arises in mergers or acquisitions is overpaying for companies. A large part of this is because the mergers and acquisition challenges on this list destroy company value, making an overpayment inevitable.
Why does cultural absorption occur?
It can be concluded that eventually over time, the minority group will shed some of their culture’s characteristic when in a new country and incorporate new culture qualities.
What does a merger mean for employees?
Mergers and acquisitions tend to result in job losses for employees in redundant areas in the combined company. The target company’s stock price could rise in an acquisition leading to capital gains for employees who own company stock.
Why do most mergers fail?
That’s on the low end of how many mergers and acquisitions (M+As) are likely to fail. Basic reasons frequently cited for such a high failure rate include an uninvolved seller, culture shock at the time of the integration, and poor communications from the beginning to the end of the M+A process.
What happens to a culture after a merger?
Ignoring the need to address and ultimately merge cultures will result in a “culture of cultures” after the merger, lengthening indefinitely the process of actually integrating people, teams, processes and critically, success outcomes. 2. No process to leverage culture post-M&A
Why do people cling to their culture after M & A?
This is detrimental not only post-M&A, but during as well. People cling to the culture they are accustomed to, either because they enjoy working within the culture and are loyal to it or (at the other end of the spectrum) prefer “the devil they know.”
What to do when an organization merges?
You must identify the structural obstacles that exist and change them, too. Sponsor programs can be particularly effective, where the counterparts from each organization get together and talk about how they did their jobs before the merger and how they will collaborate so that they can move forward together post-merger.
What do you need to know about merging workforces?
The second thing you need to recognize is that the merging of workforces is a form of organizational change, and it needs to be treated as such. Here you use the same principles as you would in any other change management program. You also need to think about what you want the final outcome to look like.