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THE ROLE OF ORGANIZATIONAL CULTURE IN MERGING PROCESS





BY

LAURA BOTERO

MANUELA ISAZA

MANUELA MESA

DAVID JIMENEZ



TEACHER

KIT I SIN







SUBJECT

ORGANIZATIONS AND CULTURE







EAFIT UNIVERSITY

SEPTEMBRE 2011, MEDELLÍN



ABSTRACT

Many organizational researchers, such as: Barney (1986), Ott (1989), Pfeffer (1994), and Wilkins and Ouchi(1983), have examined corporate culture as a source of competitive advantage, but explicit theories are few and empirical evidence is limited. (Denison and Mishra. 1995)FALTA PONRERLOS EN LA BIBLIOGRAFIA At the same time, theories that do exist have been developed and applied just in Unites States, and scholars that have focused on the applicability of American management theories abroad, likeAdler (1991), Boyacigiller and Adler (1991), Hofstede (1980-1993), Lammers and Hickson (1979), have questioned whether organization is science, and if it is applicable across countries, and to what extent must organizational culture´s theories be modified due to national differences (Boyacigiller et al., 2003). (Carl F. and Daniel R., 2003)



Therefore, the purpose of this work would be toexplain what Organizational Culture means; as well as there will be several reasons why managers do not focus on culture`s impact within the enterprises. At the same time, this work will attempt to examine the role played by culture and provide a framework for enhancing the success of mergers and acquisitions. And finally, there will be a Canadian case that will provide an example of the role oforganizational culture in merging process.











THE ROLE OF ORGANIZATIONAL CULTURE IN MERGING PROCESS



Organizational culture, “consist of three interrelated dimensions: A sociocultural system of the perceived functioning of the organization´s strategies and practices, an organizational value system, and the collective beliefs of the individuals working within the organization”.As well, it is “operationalized by several latent variables: Organizational structure and purpose, organizational values, task organization, climate, and individual values and beliefs”; who attempt to affect in a direct way the organizational performance. (George A. and Ronald H., 1993)

Consequently, it is important to say that Organizational Culture is the different kind of cultures,believes, ways of life, and behaviors of the employees among an organization. And this factors, will affect the performance and working environment; which in fact will lead to job satisfaction, work motivation, and self-fulfillment in the enterprises. That is why, is really important to take into account culture, as it is the one who will provide for people to get along and fell content while working.MANAGERS FACING CULTURE
“The cultural element in merges and acquisition’s integration process has been identified as one of the key issues that may help explain the failure of many mergers and acquisitions. Yet what needs to be done to improve cultural integration in order to enhance M&As' success has received relatively little attention”. (George L. and Agyenim B., 2006)
Some studies done byGeorge and Agyenim, have founded out that culture differences between the merging firms are a key element affecting effectiveness of the integration process and consequently the success of M&As. Furthermore, they argue that, although managers agree that cultural differences create organizational challenges, the attention given to cultural integration issues during M&As are at best tenuous and insome cases reactive. Therefore, they suggest a four staged approach in dealing with cultural differences:
1. Phase 1: pre-merger and pre-planning stage: This phase involves information gathering and developing trust through one-to-one interaction between members of both companies. This stage culminates into pre-planning stage aimed at identifying cultural gaps and clarification through holding...
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