However, when asking employees of companies who faced mergers, a different story can be seen. An AonHewitt study showed that thirty three percent of participants blamed “cultural integration issues” as the core reason their merger failed.
This difficulty in integration is known as culture clash, where two organisations fail to integrate the social aspects of their companies. Instead of the harmonious merger anticipated by the higher-ups, what instead occurs is a fracturing from the inside, where the same boundaries which existed before still remain. According to another study by Marsh Mercer Kroll, half of the respondents said that “organisational cultural differences” was the most significant issue they faced after the acquisition had taken place.
These differences in organisational culture can be seen in many different factors of mergers. Paul Siegenthaler, author of Perfect M&A's, shows that while many factors may contribute to culture clash, it is usually culminated in one very prominent factor; the differences in how companies communicate internally. The difference in lines of communication leads to both confusion, and a stagnation in how information flows to the top. Even before the merger has taken place, internal communication within the companies seize up; messages will tend to hover at the strategic level when what employees want to know is why the organisation is merging, why a merger is the best course action it could take, in what way the company will be better after the merger, how it will “feel,” how the merger will affect their work and what support they will receive if they are adversely impacted.
Where clear communication is lacking, rumours start flying, and the acquiring company will assume the worst. If there’s bad news, be sure to deliver it all at once, not piecemeal, and make it clear that that’s all there is. Being able to effectively communicate the meaning behind the changes occurring will help facilitate the merger and help to ensure the survival of the combined company.
Thomas Straub notes in his study, that the understanding of culture clash has primarily led to the assumption that it creates human resource problems. Resource requirements are often underestimated in the process of merging and acquiring. This can have serious consequences, as it can take two or three months to properly integrate the various teams of employees effectively. Most companies start too late and are not ready once the deal is completed. A large part of this comes from implementation plans not being detailed enough. These plans are often not detailed enough because of a lack of information and the result is a failure to identify key connections between the many workstreams. This can bring projects to a halt, or requires costly rework, extending the integration timeline and causing much frustration among both the work base and at a managerial level.
A lot of this is due to a lack of clarity as to who makes the decisions, and the lack of a clear issue resolution process. Integrating organisations bring up a number of issues that need fast and concise resolution or else the project comes to a complete stand-still. Speed matters, and with clear and effective communication not only can you have speed, but sound decision-making.
What we see here is that, while the finances may be combined, the cubicles occupied by different combinations of workers, and the leadership completely reorganised, the merger still is not complete. A complete merger only comes when there has been a merger of communication, with an emphasis on the people in the company. This will inevitably lead the way to a more complete social merger of both the human and cultural aspects of each company combined.
By: Alexander Morisson