The paper "Role of Organizational Culture in Mergers and Acquisition" is a good example of a management research proposal. While the effectiveness and efficiency of production and manufacturing processes bolster the performance elements assumed to anchor success in mergers and acquisitions, neglecting the competencies underpinned by the human aspects of the stakeholders requires a reproach. Edd (2004:1) recognizes the inevitable role of organizational culture in mergers and acquisitions, arguing that research on the business models is increasingly delving to explain the factors influencing their success. The rationale appears to revolve around the rhetoric that like other businesses, the long term success of mergers is not merely accomplished through effectiveness and efficiency of the conventional competencies but through the strategic integration of the human capital from the partnering entities. The background of this study is underpinned by the emerging precedence formed by the recognition that corporate mergers are crucial drivers of contemporary corporate and economic growth.
However, the final deals often fail to deliver expected value for the shareholders of acquiring or end partnerships. Though out the merger or acquisition, the human capital in the acquired company is plunged into a pool of uncertainty especially about the unfolding of events, the stakes of their jobs and their morale is derailed as they discern their contributions to the future.
As provided by Edd (2004:1), failures being witnessed in business deals with otherwise progressive strategic and financial fit are essentially weakened by the irretrievable, immeasurable, and difficulty to manage human resources that forms any company’ s most valued asset. The concepts of mergers or acquisitions were established on the enlargement of key corporate resources: financial, physical, intangible and other tradable endowments (Sherman 2006).
The future-oriented integration strategies in mergers and acquisitions also capture elusive competencies: knowledge bases, skills, organization’ s best production and manufacturing practices and schedules. However, typically ignored but critically essential are the anchoring assets that hold the real prospects of the future of the resulting business from a merger or acquisition. These foundational assets that buttress the root success strategies include collaborative leadership, skills and knowledge retention, and working cultural cohesion. The Rationale As aforementioned, the effectiveness of products or products and services promotion does not conclude the success features of a resultant merger or acquisition.
The root strategic asset is the cohesiveness of the inherent corporate cultures of the partnering organizations. Although the success and market achievements of an organization make it attractive for potential acquires or merger partners, the custom corporate culture forms the nerve of important strategies and may not necessarily be modelled for long-range. If the leadership of an organization drives a cultural stature established on the desire for approval without candid ownership of the job and the resulting outcomes, the essence of saving the face crumbles upon mingling with rather long-term oriented corporate culture.
In concurrence with (Van den Steen 2010b: 1720), many organizations have defined competencies that are measured against 360-degree assessments, peer reviews, and feedback from customers. This culture masks the crucial practice of discerning the realistic assumptions and the mental operating systems that shape organizational culture. This classical anomaly is the “ bug” eating into the nerve of mergers and acquisitions that drives exclusive strategies calling leaders to reshape their culture, delegate more effectively, without duly putting into account the assumptions that created the old culture.
In nutshell, organizational culture through sophisticated and complex is the root strategic asset that any potential merging organizations should audit exhaustively before the conclusion of the business units.
Bargeron, L, Jared, S and Kenneth L 2012, ‘Corporate culture and M&A activity’, working paper.
Brockner, J 1992, ‘Managing the effects of layoffs on survivors’, California Management Review Vol.34, pp. 9-28.
Buono, A, Bowditch, J and Lewis, J 1985, ‘When cultures collide: The anatomy of a merger’, Human Relations, Vol. 38, No.1, pp. 477-500.
Cartwright, S and Cooper, CL 1993, ‘The role of culture compatibility in successful organizational marriage’, Academy of Management Executive, Vol. 7, pp. 57‐70.
Change, Vol. 2, pp.351‐386.
Cremer, J 1993, ‘Corporate culture and shared knowledge’, Industrial and Corporate
Cronqvist, H, Low, A and Nilsson 2009, ‘Persistence in firm policies, firm origin and corporate culture: Evidence from corporate spin‐offs’, working paper.
Datta, DK 1991, ‘Organizational fit and acquisition performance: effects of post‐ acquisition integration, Strategic Management Journal, Vol.12, pp.281‐297.
Davy, JA, Kinicki, A, Kilroy, J and Scheck, C 1988, After the merger: dealing with people’s Uncertainty. Training and Development Journal, pp. 57-61.
Edd, KR 2004, ‘The importance of understanding organizational culture in mergers and acquisitions’, Graziadio Business Review, Vol. 7. No. 1.
Hunt, J 1988, ‘Managing the successful acquisition: a people question’, London Business School
Krug, J and Hegarty, H 1997, ‘Post acquisition turnover among U.S. top management teams: an analysis of the effects of foreign vs. domestic acquisitions of U.S. targets’, Strategic Management Journal, Vol.18 No.8, pp.667-675.
Levinson, H 1970, ‘A Psychologist diagnoses merger failure’, Harvard Business Review, Vol.48 No.2, pp.139-147.
Marks, M 1988, ‘The merger syndrome: the human side of corporate combinations’, Journal of Buyouts and Acquisitions, pp.18-23.
Moran, P and Panasian, C 2005, ‘The human side of mergers and acquisitions: a look at the evidence’, Enero, Vol. 1, No. 3, pp. 1-22.
Schuler, R, Jackson, S 2001, HR issues and activities in mergers and acquisitions, European Management Journal, Vol. 19, No.3, pp.239-253.
Sherman, AJ 2006, ‘Preventing post-M&A problems’, The Journal of Corporate Accounting and Finance.
Van den Steen, E 2010b, ‘Culture clash: the costs and benefits of homogeneity’, Management Science, Vol. 56, pp.1718‐1738.
Weber, Y 1996, ‘Corporate culture fit and performance in mergers and acquisitions,’ Human Relations, 49 Vol.9, pp.1181-1202.