An Examination of the Role of Organizational Culture on Mergers and AcquisitionsLiterature ReviewIntroductionThis chapter is meant to critically review extant literature regarding the role of organizational culture (OC) on mergers and acquisitions. The chapter will give an overview of mergers and acquisitions to chronicle the environments within which they thrive unperturbed. Additionally, the context of organizational culture will be synthesized summarily to contextualize the influential parameters that play the invisible roles in how mergers and acquisitions thrive past the deal. A critical analysis of the continually changing world of mergers and acquisitions will be delved via conceptualized subheadings that revolve around the dynamics of organizational culture on the business concepts.
The primary purpose of this chapter is to elucidate what extant literature and other forms of relevant media have documented regarding the topic, which will purposively widen the knowledge breadth logically. The primary rationale of this review is to underscore documented information that provides that a proper understanding of the organizational culture by any business enterprise bolsters the adoption of feasible measures fit for rejuvenation and maintenance of culture. The aim of the literature review is to interrogate ubiquitous belief in the contemporary business realm that in a transitioning situation, the people management policies and procedures should be adjusted to be realigned with the desired culture.
Moreover, the literature seeks to contextualize the dynamics of organizational culture, which is a challenging process that must not only be influenced by extrinsic factors or decision making regimes. Strengthening OC in mergers and acquisitions (M& A) should be a guarded process that presided by all stakeholders in the deal by facilitating the desired culture that influenced by local cultures and environmental changesMergers and AcquisitionMergers and acquisitions are business forms that are pursued by business organizations in almost every industry.
It is appreciable that despite their prominence in the contemporary business growth and development planning, mergers and acquisitions are poorly documented in the academic sphere. This situation leads data mining to online sources and particularly individual business websites and reviews (Weber & Camerer, 2003). These forms of business cut across frontiers, which reflect their canonical cultural diversity burden that they have to put up with if they are to survive.
These businesses are increasingly populated with failure rhetoric, and the vast coverage of the subject in the extant literature delves greatly in the financial or performance aspects. Mergers can be horizontal implying partnership between businesses within similar line of activities, and vertical that takes place between companies that do not lie within the same level of business. The conglomerate mergers happen between companies that work in completely different lines of business. The primary purpose of a merger or acquisition is largely profitability growth and business expansion. Organizational CultureThe literature review in this context reflects a tremendous reception of attention by organizational culture from researchers and relevant theorists.
Culture is traditionally thought of as a general shared social understanding, which builds the conventional discourse among organizations that it holds the social drive in the human resource realm (Rousseau, 1990). Accordingly, culture is developed in an organization through closely knit individual and group experiences that often take long time to establish. Organizational culture is pivotal in that it evolves into a common denominator under which the operational synergy of human resource is bolstered through tacit coordination of activity.