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Cross-Cultural Business Success Tips

The Role of Culture in Mergers, Acquisitions, and Divestitures

A sensitivity to the role of culture and leadership in these organizational transactions is a critical consideration. In fact, the proof is in the pudding. Google the phrase “unsuccessful transactions” and see what the primary reasons are for failure – the lack of attention paid to understanding and effectively managing organizational culture. Think about Time Warner-AOL, Daimler-Chrysler, and the America West-USAirways mergers. These organizations cited the inability to effectively manage cultural complexities as being a key reason for less than desirable outcomes.

So, what can organizations that are facing a merger, acquisition, or divestiture do to ensure that organizational culture serves as an enabler rather than a detractor? Here are some important tips worth considering:

The Role Of Culture In A Transaction:

According to Bill Neale, co-founder of Denison Consulting, the greatest danger in a transaction is that the dominant culture will try to suck the color, or life, out of the other company’s culture, thus destroying the value proposition of the transaction.

Consider embedding the culture component into the change management program, which must consist of more than just a communications effort that cascades decisions from the top.

Be clear to link culture work to tangible and measurable components in order to maintain the momentum and to decrease the risk of it being perceived as the soft stuff. Yes, it can be measured using both a quantitative (surveys) and a qualitative approach (interviews and focus groups). This baseline can serve as a way to create mile markers along the way in order to maintain the momentum.

It’s About The People:

If a new culture is insensitively imposed on an acquired organization, it could destroy what it seeks to achieve. Consider the strengths of both cultures during the transaction and leverage those that will take the new organization into the future. Meshing these strengths strategically to achieve the organization’s goals is important – not just taking the best of both cultures and combining them since the best of both may not be helpful in achieving the new definition of success.

Communication is the basis for a successful integration effort and must be managed effectively – and not just in a top down manner. The most effective tool for an integration that preserves value is “process”, which refers to a managed and effective dialogue. This implies careful listening, based on the willingness to learn.

Take time to gain insight into the values and the basic assumptions that leadership and members of each organization hold true about people, the customer, rewards, systems, processes, and other critical topics. Will these beliefs and assumptions lead to behaviors that help or hinder the new organization from achieving its mission?

And It’s About Leadership:

Oftentimes, it’s the little things that leaders do (or don’t do!) that make the biggest impact on the transaction. Defining a decision-making process that is efficient, for example, is something that is generally overlooked, the result of which can have significant consequences. The leadership team should implement a speedy decision-making process by identifying decision makers, understanding decision-making styles, applying the right decision-making style to the situation, and providing deadlines as to when decisions need to be made.

Leaders must model the behaviors they are expecting from others. Oftentimes, it is difficult for leaders to change the culture since they are responsible for creating the current culture. Generating awareness about this is necessary to ensure success.

Leaders should have high levels of cultural intelligence. Cultural intelligence includes having a good understanding of one’s own culture and how their culture is perceived by the “other”. That is to say that one can only understand the “other’s” culture if they understand their own. Know yourself, your values, and your assumptions about the world and people first.

Mindfulness – the ability to pay attention to cues in cross cultural situations, to be curious and to ask questions – is also critical. Having a repertoire of behaviors to use in varying situations will help leaders navigate the most challenging cultural scenarios.

About gothamCULTURE

gothamCULTURE, a leadership and organizational development consulting firm, focuses on identifying the underlying causes of business obstacles and assisting leaders in developing and executing action plans at the right time to ensure that clear and measurable results are achieved. The team at gothamCULTURE is comprised of professionals in the leadership and organizational development field whose education, training, and work experience assist clients with a variety of issues including, but not limited to, improving leadership effectiveness, developing strategy, managing team dynamics, and transforming culture.

Author: Christopher Cancialosi
Article Source: EzineArticles.com
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