Culture Change Through Mergers and Acquisitions

When one organization acquires another organization or when two orga­nizations are merged, there is inevitable culture clash because it is unlikely that two organizations will have the same cultures. The leadership role is then to figure out how best to manage this clash. The two cultures can be left alone to continue to evolve in their own way. A more likely scenario is that one culture will dominate and gradually either convert or excom­municate the members of the other culture. A third alternative is to blend the two cultures by selecting elements of both cultures for the new orga­nization, either by letting new learning processes occur or by deliberately selecting elements of each culture for each of the major organizational pro­cesses (Schein, 2009b).

For example, in the merger of HP with Compaq, though many felt that it was really an acquisition that would lead to domination by HP, in fact the merger implementation teams examined each business process in both organizations, chose the one that looked better, and imposed it immedi­ately on everyone. Elements of both cultures were imported by this means, which accomplished the goal of eliminating those elements that the HP leadership felt had become dysfunctional in the HP culture.

As organizations become more global, we will see many other forms of culture mixing as in joint ventures of various sorts. How these new mul­ticultural entities stimulate culture change will be taken up in Chapter Twenty-One.

Source: Schein Edgar H. (2010), Organizational Culture and Leadership, Jossey-Bass; 4th edition.

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