Smooth operation

first_img Comments are closed. Mergersare a fact of business life, yet it’s still not easy to encourage employees toembrace new methods and cultures claims Elisabeth MarxWiththe number of cross-cultural mergers at a record high last year, we are nowconfronted with the negative consequences and potential failures of thesedeals. Many do not achieve the promised result of increased shareholder value –the debacle of DaimlerChrysler is a well-documented case in point.Thefailure rate may be high because these mergers are characterised by a clash oforganisational and national cultures, and one could assume that the greater thedifference between the merged cultures, the greater the clash. Thereare various definitions of corporate culture – including “the way we dothings around here” attitude. Culture is a shared system of values andmeanings and produces the glue of an organisation as the basis forcommunication and understanding. If this glue or internal integration isjeopardised, organisational performance will be greatly reduced.Inorder to be successful, organisations have to deal with the clash or shock ofintegrating the unfamiliar or “alien” in international mergers. Toindividuals who work abroad, cross-cultural mergers seem to go through similarphases of adaptation, starting with the honeymoon phase at the announcement ofthe merger, which is particularly present at top management level. This isfollowed by a period of “culture shock”, where general helplessnessand disorientation prevail and the fear of job losses produces stress andnegative emotions. Lowerdown the hierarchy, employees ask themselves:–Is my job safe, or will I be replaced by someone from another organisation?–Will I have to change my working style dramatically in order to survive?–Can I actually work closely with the people from organisation X?Eventually– and this entirely depends on how the integration process is handled –employees will start developing a more realistic attitude in the “recoveryphase”, where they will hopefully be able to take a different perspectiveand integrate the new values into their own value system. This process iscompleted in the adaptation phase, which is characterised by a consolidation ofthe new culture.Thetable above summarises the culture shock in mergers. The clash of values,behaviour and expectations is evident in all mergers, but is more obvious ininternational mergers.Oneof the first publicly noted differences between Daimler-Benz and Chryslerconcerned their respective attitudes towards pay and benefits. As the WallStreet Journal observed (26 May 1998), there were huge differences in executivepackages between German and American CEOs. Germans,it suggested, are more concerned with equality in pay and focus on salarydifferentials, whereas US companies are not really concerned with this issue,being more individualist in focus. Looking at cultural dimensions, this mayreflect the higher individualism in the US versus the more collectivisticapproach in Germany. The table gives some idea as to how different thesebusiness cultures are.Whatare the solutions and how can some of the major problems in internationalmergers be overcome? The following steps represent an ideal-case scenario:Step1: Cultural auditsPre-mergerpreparation should not focus solely on the economic/financial analysis and thebusiness case, but also on the cultural compatibility of the two organisations.Cultural audits, focusing on values, performance parameters and attitudes,allow you to predict how successful the integration and ultimate businessperformance of the new, merged organisation will be. They also give clearsignposts for faster integration.Step2: Integration Teamsworking on the so-called “softer” issues of the merger may enable youto buffer some of the performance problems that are the by-product of everymerger, due to anxiety over jobs, disorientation, paranoid speculation (who’sgoing to win) and the typical “us and them” attitude. Integrationteams have to target the psychological effects of mergers on most employees.Step3: Management audits Theseprovide an impartial recommendation and solve the problem of senior executivepositions with objective assessment and advice by external consultants.Step4: Individual work (self-management)Employeesin any company should start early with proactive career planning, and shouldanticipate and prepare themselves for mergers to happen in the first place.FurtherReadingWehave five copies of Elisabeth Marx’s Breaking Through Culture Shock: how tosucceed in international business, published by Nicholas Brealey Publishing, togive away to the first five readers to send an e-mail to [email protected], updated, paperback edition of the book, priced at £12.99, is now availablefrom all good bookshops or can be ordered direct from the publisher (tel: +44(0) 207 430 0224 or e-mail: [email protected]) Previous Article Next Article Smooth operationOn 1 Jun 2001 in Personnel Today Related posts:No related photos.last_img read more