LO4 - Merging Organizational Cultures

• Audit is part of the merger’s due diligence.
• Bicultural audit


  A process of diagnosing cultural relations between companies and determining the extent to which cultural clashes will likely occur.
• Bicultural audit


  Minimizes cultural collision by diagnosing companies.
• Three steps in bicultural audit:​

  1. Identify cultural artifacts.​
  2. Analyze data for cultural conflict/compatibility.​
  3. Identify strategies and action plans to bridge cultures.
• The four main strategies for merging different corporate cultures

  • assimilation
  • deculturation
  • integration
  • separation
• Assimilation 


  occurs when employees at the acquired company

  willingly embrace the cultural values of the acquiring

  organization.
• Assimilation


  this strategy works best when the acquired company has a weak culture or is dysfunctional, whereas the acquiring company’s culture is strong and aligned with the external environment.
• Deculturation


  imposing their culture and business practices on the acquired organization.
• Deculturation


  Acquiring firm imposes its culture and practices.
• Integration

  Merging companies combine the two or more cultures into a new composite culture.
• Separation


  Merging companies remain distinct entities with minimal exchange of culture or organizational practices.
• Separation


  Works best when firms operate successfully in different businesses requiring different cultures.
• Integration


  Works best when existing cultures at both firms are relatively weak or have overlapping values and can be improved.
• Deculturation


  Works best when rarely successful—may be necessary when acquired firm’s culture is dysfunctional but its employees aren’t yet aware of the problems.