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Without a concrete plan of the cultural and human side of things, mergers and acquisitions too often fail

Untitled6The companies that merge can have so fundamental different ways of working that people feel frustrated, leading to demoralization and defections (Stafford & Miles, 2013). Take the IBM-Lenovo merger for example (Mu-hyun, 2015). On paper both companies shared similar values and work culture. Yet, it took them two years to realize that processes slowed not because of their strategies or products, but because of organizational and national culture. Actually, it is an ongoing process to break down cultural barriers. In the beginning there were different values for communication during meetings. Speaking your mind versus being humble. How people address each other posed another problem. First name versus title plus last name. Different wage systems is another factor to consider, for example the ratio between base pays and bonuses.

Drawing on my own experience as a PhD-researcher I remember interviewing a high-level Chinese executive who worked in China at an American company. He was so used to the American organizational culture, that when I compare him with other Chinese executives I talked to, he displayed more American behavioral characteristics, than Chinese.

I will conclude my article by providing ways to consider culture during and after a merger (Fairchild, 2014; Mu-huyn, 2015; Stahl & Lengyel, 2012):

  • Figure out how to align the companies’ common goals while respecting everyone’s differences;
  • Develop new communication rules for meetings and teamwork;
  • Don’t rush cultural integration, consider it constantly to make workers feel like they are truly a part of a global company;
  • Have a zero-mindset. Start from square one and build a new organizational culture.

By: Marleen Spijkman
Marleen Spijkman is a PhD-researcher at the Shanghai Jiao Tong University and the University of Twente.

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