The clash of corporate cultures

When two big companies merge, their chief executive officers and chief financial officers are in the spotlight, discussing the strategic and financial aspects of the merger. Rarely, if ever, are the chief human resources officers sought for what they might have to say about the cultural integration of the merging entities. That’s because the role of the HR department in shaping an organisation’s culture is only reluctantly acknowledged. Practices define a company’s culture, but can there be practices without people?

Unified system

“Leaders of the two organisations should put their heads together and figure out how best people-oriented systems could be integrated. A system in an organisation defines the habitual behaviour of its employees and determines the level of discipline. In one company, employees may eat together at the desk and in the other, this may be unacceptable and everyone heads to the canteen. So, HR personnel of both companies should promote a style of functioning that appeals to both groups and eventually leads to their integration,” says Prof. Sunney Tharappan, director, College for Leadership and Human Resource Development.

Integrating strengths

Sometimes, inherent weaknesses in an organisation may be evident and there will be no alternative to rooting them out. However, when it’s a toss-up between two good practices, can one be chosen over the other?

“One organisation may be highly people-centric and the other may have clearly-defined and tested processes. Both are positive features and ideally, they have to be combined with each in its right proportions. However, the sad reality is that often the company that is acquiring the other will end up imposing its systems and culture on the other. Leaders of the dominant company have to realise they acquired this company only because it was good enough to be acquired. So, it has to be respected for its strengths, which should be retained. Integrating the strengths of two companies takes time, analysis and calculated changes,” says Naresh Purushotham, management consultant and co-founder, Crestcom India.

Employee morale

When a company is being acquired, its employees will experience anxiety. They need reassurance and should be hand-held through the change. Actions speaking louder than words, this reassurance should take the shape of a commitment to avoid taking drastic changes that would demoralise these employees.“In some cases, mergers play out disastrously for employees of the acquired company. Most of the top management may be removed, which will make the rest of the workforce feel orphaned. In the process, some efficient employees may leave. The best approach would be making the effort to understand the workforce before introducing the necessary changes, which should be made slowly and cautiously,” says Purushotham. Without open communication lines between leaders of the two companies, effective cultural integration cannot be achieved. Prof. Tharappan says there should be a series of meetings to discuss people-oriented systems and value practices and understand goal definitions. And then, some more meetings. With these conversations, the light of clarity will stream in, dispelling unfounded fear and uncertainty.

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Printable version | Aug 1, 2021 7:58:34 PM |

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