Blending Tribes: Leadership Challenges in Mergers and Acquisitions

By Duvall-Dickson, Susan | SAM Advanced Management Journal, Autumn 2016 | Go to article overview

Blending Tribes: Leadership Challenges in Mergers and Acquisitions


Duvall-Dickson, Susan, SAM Advanced Management Journal


The primary purpose for merging with or acquiring another company is to create efficiency, eliminate redundancy, and improve profitability (Tetenbaum, 1999). Historically, economics are primary. Lay-offs are common, creating uneasiness and insecurity for those who remain (Lin and Wei, 2006). Mergers and acquisitions occur for several reasons, including, but not limited to, reducing overhead through consolidation or gaining access to new research or proprietary information. In these instances, the health of the culture may not be a consideration. While management competence, market realities, government oversight and regulations may play a key role in the success or failure of a merger or acquisition, this research focuses strictly on the role of culture.

Leaders of merging organizations have traditionally understood cultural change from an epistemological point of view (Bligh, 2006). Often the idea of "buy-in" of the new culture is expressed through facilitation, feedback, and mission statements. In light of the dominant epistemological viewpoint, this research offers a different approach into an inquiry on mergers. Specifically, it is a study of organizational culture in mergers and acquisitions from an ontological perspective.

Both organizational cultures should be considered in creating the ideal in a merger. In fact, sooner or later, one culture usually assimilates into the other, leaving behind most of one organization's history and traditions that were once vibrant and alive.

Mergers and acquisitions are traumatic events that reduce trust, satisfaction, and productivity among the members of an organization. Telling the story of "who one is" offers the opportunity for reflection, shared understanding, and reinterpretation that may imbue new ways to transition toward mergers and acquisitions.

Critical hermeneutic (interpretative) theory was used as the basis for the inquiry. The data were collected through conversations with individuals directly involved in mergers across several industries. The methodology included extensive conversations with the participants, transcribing the conversations, and identifying common themes related to culture in their respective mergers or acquisition.

Two categories within critical hermeneutic theory were chosen to guide the narrative. Under each category is a general question related to the category:

1. Narrative identity. Through the collection and interpretation of narratives, discuss some of the happenings that could provide an opportunity to embrace new identities for individuals and organizations that experience radical change.

2. Mimesis. Through collective reinterpretation of the past, how might we imagine a new future for an organization?

Paul Ricoeur (1984; 1991; 1992) and Richard Kearney (2003; 2004) provide the theory behind the research categories. Ethics, power, tradition, integration, and imagination emerged as themes within these categories, adding essential layers to this study.

The findings reveal an opportunity for further study into how organizational culture might become a more integral part of due diligence at the onset of the merger or acquisition discourse.

The Cultural Connection

Every business and organization has a culture. It can be weak or strong but either way has significant influence and affects everything from how decisions are made to what people wear (Deal, Terrence, and Kennedy, 2000). Deal and Kennedy (2000), believe that American business, in particular, should remember that people make businesses work. One of the major contributors to organizational culture are corporate rituals. In mergers and acquisitions, ritualistic behavior can present barriers to the integration of two cultures (Deal and Kennedy, 2000).

The ability of people in organizations to integrate and adapt to change following a merger or acquisition continues to be challenging. …

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