Cultural Clashes within Organizations

This topic contains 6 replies, has 7 voices, and was last updated by   8 months, 1 week ago.

Viewing 7 posts - 1 through 7 (of 7 total)
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  • #112924

    Matthew Chatelain
    Participant

    Would be curious to understand other M&A experiences, where employees of one organization felt severe culture shock upon merger with another organization. We have witnessed situations where acquisitions did not go according to plan as a result of different decision-making styles, leadership hierarchies, and change management approaches. However, has anyone experienced a situation where cultural integration was initially questionable, but eventually, the integration was deemed successful from a human capital perspective, and if so, what techniques were implemented to get to that point?

    #113984

    Awais Dilawer
    Participant

    Being Culturally Fit is the foremost requirement for the organization for making the decision to acquire a firm. Culture differences turns out to be a disaster and source of big loss for the companies

    #114576

    Clark Murphy
    Participant

    Absolutely Awais. It should be the first requirement of any acquisition opportunity. If there is a culture clash, then the transaction will most likely cost a lot of money to the acquiring company and would provide no value. That being said, if the transaction is only IP based, then that might not be a requirement. However, the seller might not want to sell the company to the potential acquirer if that were the case.

    #115035

    Brandon Kissinger
    Participant

    What seems to be the most difficult is assessing potential cultural clashes. While firms like Vista Equity Partners require all employees to take a competency test, this seems to be done after the acquisition is completed. Along these same lines, I can imagine that you could only interview the most senior leaders (small sample size) to gauge the cultural fit of an acquisition.

    Are there steps one can take to get a feel for say 70% of the organization prior to an acquisition?

    #115774

    KH Tai
    Participant

    This would depend on which departments and roles you are integrating, for instance, for sales and marketing departments and roles, you might be better off keeping the two groups/team as separate brands/entities. The risk of integrating these teams may negatively impact the company’s P&L.

    #116231

    CHEE KOK SENG
    Participant

    Start planning early
    Cultural Integration is a process, not an event. Too many organisations only start thinking about culture after the deal is signed. Culture could be a key reason why a merger does not happen, so prioritise it at the beginning of the due diligence process.

    #116294


    Participant

    Really good questions – I have seen some examples where it has happened but has taken time for the individuals, who were competitors one day previously, to begin to trust their new colleagues, which is a natural reaction. Some are never able to beyond it, but for others, those with a more growth mindset, through time and learned experience they begin to trust, and even like, one another. The challenge has been in ensuring that the inevitable in between period doesn’t cause irreparable damage to existing supplier and customer relationships, and that leadership time is not wasted on the “lost causes”. To speed up the process ensuring there is time for the individuals to spend together and connect on more than a purely business level, and that trenches are not drawn on day 1 – integration planning is critical.

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