Mergers and acquisitions are usual in the corporate world. It is a regular practice where a giant corporation decides to take over a smaller organization. It is the secret to ensuring competitiveness because the organization that has been taken over has valuable expertise for the larger organization. However, it is unfortunate that both organizations may not be on the same page in terms of their organizational cultures. It results in the clash of cultures of both entities that can hurt the effectiveness of the takeover. It is worth understanding the reason for such clash and solving it so that takeover can remain an effective business strategy.
Reasons for the Clash of Organizational Cultures:
Organizational culture is not simple, but it is a combination of many organizational attributes. The attitudes and behaviors of employees and top management practices count towards it. Organizational behavior and employee behavior studies have noted that human behavior plays a dominant and fundamental role in forming the culture. It takes lots of time to develop and takes considerable time to change. It is not one night job to change organizational culture. Some companies might have different organizational cultures, but they have some similarities, as well. For example, two tech companies might have the same technology to run the operations and functions of the organization. One might say that there would not be a clash of cultures. But it is difficult to say this for sure because it depends on the behavior and attitudes of the top management.
The clash of organizational culture after the takeover has the biggest reason for the lack of involvement and participation from the top management. Understanding culture is not a short-term practice; instead, it is a long-term approach that should continue for a considerable period. For instance, Apple and Microsoft are the two companies in the technology industry. They make devices and products used in the technology industry. However, they differ in organizational culture considerably. The culture of Google is way different from these two. Therefore, the clash of organizational culture is due to the inability of the top management to understand the crucial importance of culture (Panibratov, 2017).
Resolving the Clash of Organizational Culture:
The resolution of the clash of organizational cultures starts from admitting the fact that organizational culture is challenging to control and manage. Both companies have different organizational cultures, and top management from both sides has to sit together to ponder it. They have to seek overlapping attributes of each organizational culture and then should start resolving them. It requires patience because sometimes, the inability to solve clashes may lead to failure of the takeover. A competitive initiative may fail because of a lack of addressing the issue effectively. After recognizing the need to understand both organizational cultures, it is essential to start communication and developing teams for joint actions. Half of the journey would be made after recognizing the need to solve the clash, and the rest would be achieved by effective communication (Filipović, Podrug and Kandžija, 2017).
Organizations should learn the effectiveness of matrix organizations and projects. In these projects, employees from different departments participate as one team. Therefore, it should not be unusual for both organizations to make the takeover a success. They should learn how the matrix organizational structure works in an organization. Sometimes, departments within an organization have different cultures or ways of performing functions. Despite this fact, the matrix organizational structure works well. Moreover, it is of considerable help to choose an organization for a takeover that has similarities in the organizational culture. It starts from recognizing the crucial importance of culture that should be in the minds of top management of both organizations.
References
Filipović, D., Podrug, N. and Kandžija, T. (2017) ‘Successful takeovers and internal organizational variables: Experience from Croatia’, International Journal of Organizational Leadership, vol. 6, no. 2, pp. 232-248.
Panibratov, A. (2017) ‘Cultural and organizational integration in cross-border M&A deals’, Journal of Organizational Change Management, vol. 30, no. 7, pp. 1109-1135.
