Cultural aspects of global companies acquiring much smaller organizations

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This topic contains 3 replies, has 4 voices, and was last updated by   3 months, 3 weeks ago.

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  • #116986

    Vijay Dravid
    Participant

    What cultural and operations aspects should large global ( multi billion$) companies consider when they acquire much smaller companies, but those which are more nimble and digitally native and digitally born in their way of working and staffing?

    #117039

    Ian Smith
    Participant

    Hello Vijay,
    Good topic and one I can relate to. In my opinion…

    In terms of culture I would try to ensure there is alignment with the relationship of the key stakeholders of the deal. Meaning that pre-deal relationships should be strong and/or strengthened. Opinions on fairness, vision and ambitions should be similar and both parties should see a mutual benefit of being in a relationship with one another.
    This is similar to operational alignment – both parties need to benefit i.e. the smaller company should see a benefit from the larger company’s brand, market presence, systems etc and ideally in the same industry the target is in, and the Larger company should see that they can grow the business without destroying any value.
    I see this simply as a seed being planted in a green-house. The seed could be a ‘magic bean’ by any means – but in the wrong growing conditions it will never grow and both parties lose.
    The only winners would be the targets shareholders, who, if they see any failures in the points regarding culture and operational synergies either wont sell or will take the money and leave.

    Cheers,
    IanS

    #117061


    Participant

    Fully agree with the previous remark. I think that larger companies that take over smaller more digitally native companies should have the awareness that it is very important have a “fit” with regards to culture and that this can mean that both parties evolve.

    #117626


    Participant

    Smaller companies are mostly entrepreneurial and may not have proper structure and processes. That is the reason sometimes why they are successful because of faster decision making, lack of bureaucracy. Bring them into the fold and allowing the founders to continue to be creative and feeling like they have the autonomy to experiment is important vs. where they are being asked to work in a rigid and structured environment.

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