Case Study: Mergers and Culture Clashes

Mergers do not always lead to culture clashes - Group 50i – Hossam Helmi Elbohi

The issue

Even though a well thought/planned approach to resolve cultural differences in

mergers/acquisitions would come short in few crucial aspects. Leaders opt for ruling through

forced coercion to establish the core values of one over the other for the sake of speedy results

undermining the effect on their new staff capital value for the business.

The root-cause

As clearly stated in the business case, BOA growth had been built and attributed through thrift.

The size and smarts had enabled them to acquire MBNA that valued staff entrepreneurship and

speed. Such core value had prevailed as senior leadership oversighted what they admired of

MBNA culture and considered as secret of their success. Such over ruling and the use of force

pay-cuts and benefits disposition had resulted into tension among management of both entities

and perceptive view of either arrogant or bureaucratic from both counterparts.

Though BOA had kept some of the cultural practices from MBNA and in some cases they

adopted a hybrid approach to keep both cultures. Yet, BOA focus on cost and size culture was

not revisited and improved through the culture transition while the innovative and risk taking

entrepreneurship traits was not embraced and valued as being brought in the mix by MBNA

staff.

The fact that only few employees had left after the merger doesn’t indicate a failed change

management, however, the end result of perceptive segregation between counterparts

managers is indicative of cost of lost opportunity of possible good change that merger would

have gained from such acquisition.

Alternatives to achieve creativity within formal organization structures

Alternative I:

Use of Rational persuasion strategy to manage change to all staff benefits

and compensation pay.

Alternative II:

Use of Shared power strategy to manage changes to all staff benefits and

compensation pay....