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Can Two Rights Make a Wrong?

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Can Two Rights Make a Wrong?

Insights from IBM's Tangible Culture Approach

IBM Press,

15 min read
10 take-aways
Audio & text

What's inside?

Most M&As fail, and cultural conflict is often the cause – not because everybody’s wrong, but because they’re right.

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Editorial Rating

5

Qualities

  • For Experts
  • Insider's Take

Recommendation

Mergers and acquisitions (M&As) are a permanent part of today’s business landscape. Firms routinely buy other firms or combine with other companies, or sell off business units to focus on core capabilities. Nevertheless, half of all M&As don’t work, often because the companies’ corporate cultures clash. IBM organizational change expert Sara J. Moulton Reger discusses how disparate companies can come together successfully after an M&A. She bases her recommendations on the experience she gained in 2002, when IBM acquired PricewaterhouseCoopers Consulting for $3.5 billion. Unfortunately, she does not always explain her story clearly: She tends to bury important points in an avalanche of details, and she never met a buzzword she didn’t like. If you can transcend these stylistic infelicities, you will find IBM’s approach to this common problem useful, although time consuming. getAbstract recommends this book to executives and managers who are considering or are already involved in M&As.

Summary

When Cultures Collide

E.H. Schein, an expert in the field of organizational development, coined the term “corporate culture.” He defines it as “a pattern of shared basic assumptions” that arise from a group’s experiences of solving problems both with one another and with the outside world. The group adopts the assumptions that worked and teaches them “to new members as the correct way to perceive, think and feel in relation to those problems.”

Harvard Business School Professor John Kotter explains that corporate culture manifests itself through the actions of employees. Michigan Business School Professor Kim Cameron says that corporate culture is even more important than business strategy, market dominance or technological capabilities. Jack Welch, the former CEO of General Electric, believes strongly in the value of corporate culture to achieve marketing and operational goals.

Thus, companies that merge must find some way to combine their cultures as well as their operations. Failure to do so can result in havoc – and when mergers blow up, they severely hurt the firms involved. If you do not address culture issues during an M&A, costs can go up and productivity...

About the Author

Sara J. Moulton Reger was head of IBM’s Organization Design and Change Management Practice and played a leadership role in IBM’s 2002 assimilation of PricewaterhouseCoopers Consulting.

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