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M and A

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The M&A (Mergers and Acquisitions) field can be a goldmine of opportunity. It can also become a quagmire which can cause the eventual demise of the newly merged or acquired company.

What makes the difference between success and disaster? Simply, an understanding of how employees at all levels and from all sides perceive the changes. In a merger or acquisition there will be a clash between two cultures - the dominant and submissive. People's base insecurities and fears rise to the fore during such situations.

The stresses are caused by uncertainty and fears that individuals, groupings and departments will be marginalised by the coming together of the corporate entities. There will also be well founded fears that layoffs, downsizing and rightsizing will be the result of a merger or acquisition. In the beginning stages of the merger, one may expect heightened tensions and politicking as employees attempt to evaluate the expediency of belonging to a particular grouping or 'tribe'. The organisation may expect to become 'inward focused' as a result of this process with more attention being placed on events within the organisation than normal. This is to be expected as the individuals will feel livelihoods and their very existence are threatened. As individuals perceive that they are being threatened at a very base level, one can also expect their reactions to be visceral.

The stage is now set for a clash of cultures - the dominant and submissive. Certain behaviours associated with the different cultures now start to become evident - a dominant swagger versus gestures of timid appeasement. Unless firm proactive action is taken, the distrust and frustration experienced here, especially by members of the submissive culture, is likely to take hold an poison the organisational culture for many years to come.

Action

  1. The first step is for top management of the merged culture to get to know one another and be seen to be getting to know one another. And when doing this, it is important that this be utterly sincere. People quickly cotton on to any insincerity.
  2. Define and promote a consistent framework in which decisions will be made and how these will be communicated to employees.
  3. Acknowledge peoples' fears and emotions. A way ahead needs to be mapped as quickly as possible. If there are layoffs and downsizing in the pipelines, get this into the open and perform the surgery as quickly as possible.
  4. Decide on what the new culture will be like and communicate this. Openly communicate the shared values.
  5. Live the reality of the newly merged entity.