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How Organisations Undergoing M&As Should Culturally Blend to Sustain Employees in the Long-Term

Consider employee gatherings or even short retreats where the common values and behaviours are reinforced so that transitioning to a common culture becomes an enjoyable activity where everyone is on the same page

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Of late, we heard of Amazon's acquisition of supermarket chain whole foods, but perhaps more relevant to the Indian market was Walmart's colossal acquisition of e-commerce frontrunner Flipkart. These swift acquisitions lead us to consider the effects that these seemingly quick business decisions have on the workplace culture of such organizations. In the last decade, culture has emerged as one of the most principal barriers to effective business integrations. In one study, workplace culture was found to be the cause of 30% of failed mergers.

Transforming Attitudes and Actions: How Senior Leaders Create Successful Workplace Cultures Whitepaper states that corporate culture is such an abstract concept, that even employees from different areas of the same organization have vastly varying perceptions of it. This further complicates the process of merging two entirely separate ones. In situations such as mergers or acquisitions, the very elements of a culture that have helped the organizations to flourish can become liabilities as business environments evolve. Companies involved in mergers or acquisitions must deal with the integration of multiple corporate cultures, and for organizations operating internationally, societal cultures - the customs, ideas and behaviour of diverse peoples and nations - add further complexity. Learning a new culture can be challenging, but is especially so when employees are faced with uncertainty about what the future may hold and whose job is on the line. An acquisition or merger-related dip in morale can lead to absenteeism, lack of innovation, collaboration and ultimately, efficiency. Morale suffers as employees who survive layoffs feel fear and resentment.

Companies looking to merge should start with a plan that details the entire process of the merger and detail to a great extent what their communication and plan of action should be with regards to their workforces. This begins with an assessment and identification of the aspects of both cultures that have proven most integral to the bottom line. This includes quantitative and qualitative research on the outlooks, views and behaviours in both companies. The prevailing similarities will be the common ground on which to build the foundation of the new culture.

The next task should be to permit other stakeholders to have a voice in defining this new culture and find aspects of both, that work in tandem. This can be done through group brainstorming sessions where the company's value proposition, mission, vision and values are solidified. It's not about whose way is the right way, it's about incorporating the best of both worlds and emerging with something optimal. This culture should then be maintained through concise and direct communication that starts from the top, carries across the entire organization, is integrated into the business systems and then reassessed six months or a year later to see what is working and what is not. The leadership in both organizations needs to align, express and exemplify the new culture by putting it into action. This can be done through town halls and training sessions that articulate the new values and expected behaviours, as well as choosing leaders who are already exhibiting them. The new culture becomes intrinsically established within both businesses. Ensure culture is part of the performance assessment system, so behaviours that exhibit the preferred qualities are rewarded and expected.

Consider employee gatherings or even short retreats where the common values and behaviours are reinforced so that transitioning to a common culture becomes an enjoyable activity where everyone is on the same page. If you can pull this off correctly, the blending of different cultures will be fruitful. At the six-month point, retrospect to see how far you've come and whether your efforts can be adjusted to cement your new culture even better.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tags assigned to this article:
merger and acquisitions

Pallavi Jha

The author is MD & Chairperson of Dale Carnegie of India.

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