mergerculture - -1- Mergers and Corporate Culture...

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- 1 - © Oliver Recklies, 2001 Recklies Management Project GmbH § www.themanager.org Tel. 0049/391/5975930 § Fax 0049/721/151235542 § mail: drecklies@themanagement.de Mergers and Corporate Culture It is widely recognized that cultural differences between the partners of a merger are one of the most common reasons for failure in mergers. This may happen during pre-merger negotiations or during post-merger integration. Despite all Due Diligence, the two partners of a merger fail to form a new successful unit that is able to exploit all synergies. Often, the term ‘corporate culture’ is used to describe issues like objectives, personal interests, behaviors etc. Many problems in cooperation and teamwork are blamed to culture. However, in a merger, ‘culture’ is more than making the people from both partners work together smoothly. The development of a new, shared culture is a critical factor for merger success. It is possible to manage this process in a structured way. Explaining Corporate Culture Corporate Culture is embedded deeply in the organization and in the behavior of the people there. It is not necessarily equal to the image the company gives itself in brochures and on the website. Therefore, it is difficult to determine an organization's culture from the outside. Especially in pre-merger negotiations – when time and confidentiality are critical factors while trust still needs to be established – it can be a challenging task to find out if the cultures of the potential partners fit together. Culture: Assumptions Believes Values Norms Styles Mechanisms: Rewards Systems Structures Capabilities Strategy: Products Services Customers Colleagues Behavior Customers Suppliers State Society Competitors Shareholders The Cultural Onion Skin Corporate culture is determined by a variety of different factors: Artifacts Management styles Norms Values Believes Assumptions The concept of corporate culture is best described by the sentence The way we do things around here. There is no one right culture for an organization. There are only cultures that fit more or less to the particular situation of the organization.
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- 2 - © Oliver Recklies, 2001 Recklies Management Project GmbH § www.themanager.org Tel. 0049/391/5975930 § Fax 0049/721/151235542 § mail: drecklies@themanagement.de In practice, several cultures can exist within one organization. This may more often happen in larger, diversified companies, when some
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mergerculture - -1- Mergers and Corporate Culture...

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