MERGERS AND CULTURE CLASHES

Mergers Don't Always Lead to Culture Clashes



Mergers Don't Always Lead to Culture Clashes

Cultural differences are a significant cause of decreased organizational performance. Mergers and acquisitions directly impact the organizational performance if it is unable to adjust with the corporate culture of merging company. In many situations, where culture change is not handled properly, direct impact is observed on the performance of employees, employee turnover rate, and conflicts between groups.In what ways were the cultures of Bank of America and MBNA incompatible?

Many big organizations have faced critical situations when they merged with or acquired other organizations. In many instances, it directly leads to failure. This highlights the situation when organization's values are not fully adopted that directly influence the organization's effectiveness. Culture of Bank of America and MBNA were significantly different on many factors. MBNA's culture can be defined as an entrepreneurial spirit, where employees were given highly accustomed life (Dash, 2007). MBNA had a luxurious culture as its employees were given high salaries and perks. Contrasting to that, Bank of America had a quite bureaucratic culture. Main emphasis was placed on cost minimization. BOA adopted a conservative approach towards gaining success. It more focused on the size and smartness of its employees than the growth rate (Dash, 2007).

Another difference is observed in the dress code of employees. MBNA had a formal dress code for its employees; however, BOA had a casual dress code for its employees. MBNA was more focused on the professional approach towards client building, whereas BOA had a no-nonsense operation (Dash, 2007).Why do you think their cultures appeared to mesh rather than clash?

People had a belief that the merger between BOA and MBNA will not succeed. Although chances of failure were comparatively higher but not obsolete. BOA's approach towards adopting the constructive culture values of MBNA and aligning the difference between cultures to the BOA's values enabled the success of the merger.

First of all, BOA cut the pay scale of highly ...