Question

Strategies involving mergers and acquisitions are particularly vulnerable to cultural problems. Mergers between two organizations often are easier to accomplish on paper than in reality. Reality may reveal that the cultures of the organization fail to mesh as easily as corporate assets.

Research the history of the Daimler-Chrysler merger on the Internet. Learn as much as you can about each original company’s organizational culture. In addition, there are numerous other mergers within the same industry that have occurred over the last 10 years. In fact the automobile industry is an industry of recent consolidation. It might add to your understanding of things if you add some research about the industry and the mergers within the industry. There are only about 12 to 15 global automobile car manufacturers in the world.

What problems have the companies experienced in combining their cultures?

Have these problems affected their execution of strategy?

What has been done to overcome these challenges?

What role do ethics play in the culture and leadership of an organization?

Why is it so difficult to change the culture of an organization?

Is it worth the effort? Why or Why not?

Answer 1

In today’s' era, lots of stress is being laid on adding more synergy and value by addition of financial, technological and human resource might between two or more business entities. These partnerships are commonly known as Mergers & Acquisitions.

In any case, guaranteeing that there is ideal concordance between the two isn't that simple and CULTURAL contrasts have enormous task to carry out in this. Couture might be characterized as the method for working, morals, ethics and standards of an association i.e. like the reality as there are social contrasts between religions, nations and so forth; it occurs in associations too.

Case-Study: Daimler-Chrysler Cultural Misfit

(a) PROBLEMS

1. Different managerial Styles-Daimler is a German company known to be-conservative, efficient and safe. Chrysler on the other hand was more daring, diverse and creating.

2. Business Structures- Daimler had a hierarchial approach of working. Capacities and obligations were unmistakably separated among individuals. Chrysler then again worried on group arranged methodology.

3. Lack of trust- Employees of both the organizations found it difficult to work with each other.

4. Ego-tussles-Daimler was much more dominating and tried to dominate the business. This created problems owing to the fact that both ( Daimler and Chrysler) are equal partners.

5. Different Goals- Daimler esteemed unwavering quality and accomplishing most elevated amount of qulaity while Chrysler lay accentuation on infectious plans and aggressive estimating.

(b) Steps taken to overcome these challenges

1. Open communication- Channels of communication should be kept open and misunderstanding to be avoided at any cost.

2. Clear business fundamentals- In the beginning, emphasis should be laid on how each party will benefit from this and role in the business.

3. Increased cooperation- Initiatives to be taken by top-management on how companionship and trust will be increased between different teams.

4. Respect for each other- Both the gatherings ought to hear each out other and attempt to do what is to the greatest advantage of both.

E.g.: Tata-Jaguar Merger finished in progress on the grounds that TATA didn't disturb the working and structure and laid accentuation on trust-building.

(c) Why is it difficult to change the culture of an organization?

Organization culture is a very complex thing because a large number of people, processees and goals are involved in this. Also, it takes a lot of time and effort to build it and thus, it is a daunting task to change it.

Resistance- Change is regularly opposed as hauling individuals out of their customary range of familiarity is extremely overwhelming assignment.

Risk- Culture is often associated with the profits generated. Many fear that this may disrupt the business functioning.

Different mindsets- Different people have varying mindsets. Making people agree to your thought-process is difficult.

(d) Is it worth the effort. Why/Why not?

One ought to have exceptionally solid motivations to change the way of life of any association bolstered by solid realities.

Whenever done in an appropriate way; it can yield advantages to both the gatherings.E.g:

1. Exxon and Mobil

The results of acquisition are impressive; they became the world's biggest company and continues to maintain this position.

2. BNP-Paribas & Fortis

They also consolidated their strengths and benefitted hugely from the partnership.

But, if gone they can be disastrous

E.g.:

1. Nomura & Lehman

After the fiasco of Lehman, Nomura got hold of its Asian branches. Yet, they couldn't pivot things as third were colossal contrasts in demeanors, method for working and so on.