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Dear Workforce How Do We Avoid Cultural Conflicts Related To Our Merger

Both companies need to understand the business reasons behind their differing cultures and use that information to find common ground.
May 16, 2002
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Related Topics: Mergers and Acquisitions, Dear Workforce
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Q Dear Workforce:

My company is planning to merge with a competitor within our industry. Ianticipate some internal problems arising and want to do a pre-merger staffanalysis to identify potential problem areas. What is the best way to conductsuch a study?

-- Wary of consolidation, transportation, Kuala Lumpur.

Q Dear Wary:

You are right to be concerned about cultural differences in a merger. Infact, research shows that up to three-quarters of mergers fail to achieve theoriginal business goals. Common problems include lack of cooperation between thetwo legacy organizations, turnover of key staff, drops in customer service, andnegative impact on revenue and profitability.

Although cultural differences are a key driver of these problems, the issuesare more than just personality or feelings -- and the solution is more than justasking people to play nice. Both companies need to first understand the businessreasons behind why they operate the way they do. They then need to use theirshared interest in growing a successful business together as the reason toreview the differences and decide how and where to integrate.

Your idea to conduct an assessment is a very good one. The assessment shouldinclude a staff analysis or survey as you suggest, but should also compare thebusiness goals, key business processes, and management procedures and values ofthe two companies. Sometimes these are clearly articulated, but often they arenot. Again, the assessment should highlight differences in the business reasons(or business model) for how each company operates.

Don’t stop with assessment. Invite key representatives from both companiesto meetings where the goal is to develop immediate, tangible actions that willaddress gaps. The best way to accelerate the integration process is to show sometangible results within 30, 60 or 90 days on issues important to the business(e.g., sales coordination with customers). Some issues require more long-termsolutions, but showing and communicating immediate results is essential. Mergerintegration is possible, so address issues head-on, reinforce everyone’sshared interest, and push for quick wins to build momentum.

SOURCE: Bruce N. Barge, Ph.D., Principal, organization effectivenesspractice, Buck Consultants,Inc., Orange, California, May 13, 2002.

LEARN MORE: See Global Merger Integration: Ensuring Success After theShake-Up

The information contained in this article is intended to provide usefulinformation on the topic covered, but should not be construed as legal advice ora legal opinion. Also remember that state laws may differ from the federal law.

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 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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