Merging OC

Business environment is characterized for the strategies, tactics and tools that organizations use when want to gain more market, participation, be more powerful than the competitors, gain more knowledge and create learning opportunities. One of those strategies is making alliances and or buying horizontally the chain of production.

Organizations must be aware that this integrations must be successful in order to achieve the propose of the merging. It is common that integrations that are not been managed properly create difficulties and put in danger the stability of the organization.

The document Challenges and Opportunities in Mergers and Acquisitions: Three International Case Studies – Deutsche Bank-Bankers Trust; British Petroleum-Amoco; Ford-Volvo", explain that two companies can integrate effectively if they are aware of this two important aspects: 1) The need for individuals to have a strategic independence between firms, and 2) The need for organizational independence.

When this two aspects are take in account the merged organization must created of a new value between the companies that promote in whole organization without remarking cultural differences, that promote individuals to joint efforts to achieve goals.

The author explain with 3 cases of effective integrations between organizations, that they all concentrated their effort in avoiding the uncertainty of their employees about the merging, they control it by creating committees that guide the employees in the new process. The author also explain that in the merging process the organization must identify the aspects in common and the aspects that differentiate firms, and remark the commonalities and avoid the differences.

Questions: 

Based on the required reading for this module, list and explain - using evidence from the cases presented in the reading - the main challenges and opportunities arising in processes of mergers and acquisitions from an organizational culture perspective.

Include at least 3 challenges and 3 opportunities.

• Integrating Deutsche Bank (DB) and Bankers Trust (BT) 

This case is about the challenge of the integration between to important banks to become one global, powerful organization. With this integration what was wanted was:

1) Gain a globally orientated business area on a transatlantic platform that BT already have.

2) Increase innovation, financial strength and client focus on both sides of the Atlantic

3) Ability to satisfy its customers' wishes even more successfully on a global level.

4) Lay foundations for a long-term growth of the company value.

This integration creates enormous opportunities but also have challenges in the middle, in this case there was an internal conflict about what will be the name of the new bank, conflict that will produce a lack of identity if the name doesn’t represent anything about their old bank name. The solution to this challenge was named the new bank: The Deutsche Bank - Alex Brown Investment Bank, name that not only reinforced the brand but also identity remained. Another challenge was the change of managerial style, it was shown in the case that DB was a high bureaucracy company, with a hierarchical style, and a slower decision making process than BT.

• Integrating British Petroleum (BP) and Amoco into a single organization. 

This case explains how can two organizations with two different cultures can merge into one new corporate culture. The main challenge that this case present is how they create a new organization culture that didn’t affect any of both cultures and promote work cooperation, to achieve this the company made meetings with all the managers and explained the philosophy of BP, they also motivated employees to socialize among themselves.

• Volvo and Ford.

This case is about the integration of two big automobile companies which was very beneficial for both sides, the opportunities of this integration are:

1) Volvo need financial power to stay competitive in the market, they were losing capacity of research and development to create competitive cars.

2) Combine technologies.

3) Share knowledge.

4) Introduce new products in new markets.

This case have the traditional challenges mentioned before but is characterized by a major challenge that is the merging of two cultures that have been doing things by different ways, one Swedish culture used to be team work oriented and very decentralized an another very complex and hierarchical.

References:

Alzira Salama, Wayne Holland, Gerald Vinten, (2003) "Challenges and Opportunities in Mergers and Acquisitions: Three International Case Studies – Deutsche Bank-Bankers Trust; British Petroleum-Amoco; Ford-Volvo", Journal of European Industrial Training, Vol. 27 Iss: 6, pp.313 – 321.

Tapking J, Yang J. Horizontal and Vertical Integration in Securities Trading and Settlement. Journal of Money, Credit & Banking [serial online]. October 2006;38(7):1765-1795. Available from: Business Source Complete, Ipswich, MA. Accessed October 17, 2010.

Than L, Lao T. EVIDENCE ON EFFORTS TO ALIGN ORGANIZATIONAL STRUCTURES AND BUSINESS STRATEGIES. Global Journal of Business Research (GJBR) [serial online]. January 2010;4(1):71-84. Available from: Business Source Complete, Ipswich, MA. Accessed October 17, 2010.


Images taken from
- http://browse.deviantart.com/?qh=&section=&q=corporation#/dovyuu
- http://www.bypd.in/DeutscheBank/Images/deutsche-bank-normal.jpg
- http://yevgyeni.com/UNCTV/amoco-bp.jpg
- http://www.blogcdn.com/www.autoblog.com/media/2007/07/ford_denies_volvo_sale.jpg