Culture is defined as the set of shared attitudes, values, goals, practices and underlying beliefs that characterize an organization. To place this definition in context, one must look at an organization as a society or extended family that is bound by more than its work processes. It should be clear that culture is not a process but rather it is the way people in an organization treat one another. Culture can be "measured" by viewing how things are done in an organization.
It has been said that a good culture is the greatest competitive advantage that a business possesses. An organization can acquire commodities such as technical knowledge, technology, furnishings, etc. However, these type of assets can be replicated and thus contribute to a less sustainable competitive advantage. The influence of culture, the ability to collaborate in harmony to achieve the organization's objectives, is critically important. In most cases, culture is the only dramatic competitive advantage and it's the one asset that you cannot buy.
Is culture important in a merger of businesses?
Typically, businesses merge for a number of reasons. The intended results are generally to increase market share by consolidation or removing competition, acquiring new technologies, creating vertical integrated organizations, and the like. In most cases, the primary driver for a merger is the financial opportunities that are anticipated. Says Jim Stern of Corporate Management Developers, "The good news is that when the importance of culture is recognized and steps are taken to avoid clashes, even companies with very different cultures can successfully merge. In looking at potential merger partners, you've got to weigh potential culture clashes along with the financial aspects of any proposed deal. When cultures clash, you may not enjoy all or even most of the benefits you'd hoped for in a merger. Look at failed mergers and you'll see the companies never reached a point where they could work together."
Some strategies
There are some quick and easy ways to sense an organization's culture. Walk into the company premises, look around at the order or disorder of things and see if people smile at you as you progress through the offices. Orderly offices and friendly staff are two good indicators of a company's culture. Another approach is to ask the following questions of the employees and gauge their answers in light of how your organization treats its employees:
- What is encouraged here?
- What is forbidden?
- What is really valued?
- What are people held accountable for?
- What are people rewarded for?
Concluding comment
Understanding the cultures that exist in the merger candidates and the steps needed to deal with them will increase the chances for a successful combined entity.
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