Merger occurs when two or more companies combines to form a single company. There are so many reasons why merger occurred. These might includes gaining market share and increase sales and profitability. The market world today is facing increase competition, at such firms as well as organisation will like merge to have popular strategic tools for increasing products portfolios, entering a new market and acquiring new technologies. On the other hand, 80% of mergers do not reach their financial goals and 50% of the mergers fail. (Nahavandi and Malekzadeh 1993) it's true that most merger fail because of financial reasons or economic crisis, and management as well, but we must critically look at the important of culture in the merger process. When two companies merged with different in culture, it will have greater consequences on the organisation. A good example can be seen when two American airline merged call US air and America West. The two airlines had extremely different organisation cultures. US Airways had an older workforce with highly structured bureaucracy, whereas America West had much younger workforce with entrepreneurial culture. In other for this company to succeed, they must adopt to a common culture that will suits the company.
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Cultural differences: When employee does not agreed in an organisation because of culture. This will affect their performance in the organisation. Culture play an important role in the way employees will react when they face new business environment. In some situation where merger take place. Some employees have feared that they would lose their jobs; it's difficult for some to work with new members within a team. Some employee will as well developed fears not to take risks in the organisation. At such we need to always make sure that we give a lot time for employee to adapt to the new culture.
5.8. Impact of organization culture on merge
Organization culture is one of the most important factors of success or failure of a company. Culture of an organization can be defines as set of norms, values and beliefs. These have developed over time unplanned and emergent. Culture will have an enormous impact on the way a company operates today. The important point about culture is that whilst there may be striking differences between organizations, there are shared understanding within them. The culture does not become established until this shared understanding achieves dominance in the collective thinking of them members of the organization. The dominant culture that develops in an organization is the primarily the product of the aims and methods of founders or their successor in senior management combined with their interaction with variety of internal and external forces. The following points below illustrates some important interrelationships that both produce, are deeply affected by the organization culture
Purpose and Goals
Employee skills and attitudes
Use of technology
Customers / competitors
Rules and procedures
Decision- making mechanisms
The purpose and goals of the organization initially trigger the kind of culture that founders of their successors want to see their vision. The extent to which they achieve this culture depends as much on the others factors as on their own leadership. The external environment will also will also play a major role, customers, suppliers shareholders and competitors will exert some influence on what the organization choose to day. However, internally the attitudes of employees, as well as managers will matters a lot. The development of technology and the way it's implemented will create an impact on the organization culture.
5.9. Factors that influence organizational culture
Change in management
For an organization, change management means defining and implementing procedures and/or technologies to deal with changes in the business environment and to profit from changing opportunities. Change management is one of the main factors that influence organization culture. Change might come in various forms within an organization, such as technological change, change in management staff as well as change in leadership. In the case of technological change within an organisation, the organization might adopt this to increase production processes or to improve service quality. In this case the use of technology involves changes to organization. During the 1830s when the industrial revolution started, many organizations changed their management system, work done by hands where later changed to machine. Its affected most organization culture, in the sense that most workers went unemployed, but its increased production and sales and automatically generated more profits which lead to more growth opportunity.
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Change of business.
Change of Business influences organization culture. It's important to note that business employs, sells to, buys from is regulated by and is owned by people. Business includes people from different cultures, every business function managing a workforce, marketing output purchasing supplies , will be subject to potential cultural problems. Firms as well as companies and organization which are form of businesses must be sensitive to these cultural differences in order to predict and control it relationships and operations.
Employees are part of an organization, at such they would be unhappy if things are not going well in the organization. In today competitive world, it's important for organization to do all they can to keep their employee happy and motivated. Organizational culture plays a vital role amongst our employees. An organization that has a good culture ensures that its employees are satisfied with the facilities it provides them. This means that taking adequate care of employees ensures organizational effectiveness. This culture also enables employees to work in a comfortable environment that is reflected in the overall efficiency of their work performance.
Geographical locations influence organization culture, in sense that when companies are located in a particular region, they most adopt to the culture of that area in other to succeed. Geographical location might vary in turns of language; language is a factor that greatly affects cultural stability. When people from the same geographical location speak the same language, culture spreads easily. Since countries see language as an integrate part of their cultures, they sometime regulate their languages for examples by requiring that all business transactions be conducted and all made in labels be printed in their languages. Religion is a strong shaper of value; different geographical location has different religions, at such this affects organization culture in that particular region. Major religion of the world includes Buddhism, Christianity, Hinduism, Islam and Judaism- as many factions can affects specific beliefs which may affect business.