Firstly, the empirical research of Tetenbaum (1999) will be considered. Tetenbaum looked at the ‘seven key practices that improve the change for expected integration and synergies’.
Her research concentrated on organisations’ acquisitions and mergers and the reasons why some failed and others succeeded. Tetenbaum found that culture is central HR issue in the success of a merger. Tom Davenport identifies culture as “the DNA of an organisation-invisible to the naked eye, but critical in shaping the character of the workplace” (Tetenbaum, 1999, p. 26).A survey carried out by Hewlett associates of 218 major U.
S organisations shows that integrating culture was the top challenge for 69% of the companies. These statements and research results support the notion that culture is an imperative element in a change initiative and that management need to understand their culture and other cultures in order to implement a change initiative on as large a scale as merging with another company. Tetenbaum also looked at reasons why mergers failed. For example GE Capital found that mergers that did not have integration managers did not perform as well as those that did.The integration team leader should be able to “translate strategic intent into action” (Tetenbaum, 1999, p. 29). This means that for a change such as a merger to be carried out, it helps that the integration managers have the skills to implement the strategic changes.
The integration team manages the integration of the two organisation’s cultures in two major ways. Firstly, the teams draw on cultural artefacts to create the blended culture. Secondly, the team needs to somehow make both sets of employees work together towards the same goal.One way of doing this is to set a goal that can be achieved by both teams working together. This empirical research is helpful to management as it shows that an integration team is helpful when merging two organisations and shows a way of integrating two different cultures and helping them work together towards the same goal. One problem with implementing changes was identified by the Hay Group, who found that 49 of 65 merged companies surveyed said they failed to place employees in the right roles in the first six months after merging.The way terminated employees are treated during and after the downsizing process has a dramatic effect on the survivors’ attitudes and commitment.
“The downsizing process should be conducted in a manner which allows the organisation’s corporate culture to reinforce the company’s values”. This can be crucial to management as it is a necessity that their employees are in the right roles. However, the research does not show how management can recognise if an employee is in the correct role and so it would not help the management; it only tells management that they need to do this.Culture addresses individual and organisational beliefs and values, two elements which are among the most difficult to change. This explains why merging two company’s cultures can be so difficult to manage.
Observations by knowledgeable business journalists and findings produced by empirical researchers believe the failures of a merger are down to the fact that the cultures are incompatible. Tetenbaum’s empirical research does aid the management of change to a degree. The journal looks at the reasons why mergers go wrong in companies and the most common reasons for merger failure.
This information can aid management as they know what factors to look for and what areas to implement, such as creating an integration team that focuses solely on integrating the two organisations. However, the research does not illustrate how to effectively analyse an organisation’s culture and help management decide on whether their culture is compatible with another organisations and so it does not aid the management of change in this sense. The commitment of employees is also a crucial area for management to understand when implementing a change initiative.Mowday, Steers and Porter 1979 defined commitment as “the degree of identification and involvement that individuals have with their organisation’s missions, values and goals”. Western organisations have tried to obtain the degree of commitment shown by Japanese organisations. However, the Japanese culture is far different to Western culture.
Most crucially, commitment is a two way process; managers are also committed to their employees (Pascale and Athos, 1981, p 191). This theory does not help management as it only states what other organisations have, and it does not suggest what they can change in order to gain what others have.Commitment is linked clearly to the attitudes of employees in organisations. Attitudes have three components (Mckenna, 1994, pp. 251, 287), which are: belief, feeling, which is also known as an affective attitude, and action. The affective attitude is an individual’s emotional attachment to an organisation and links to the commitment that employees have towards an organisation. If this theory could be linked with showing how management can input this attitude into employees it would be very beneficial to management when implementing a change initiative.
However, the theory only states the three different attitudes that employees have.The action attitude relates to an element of commitment known as ‘continuance’, which is an individual’s need to continue to work for an organisation, due to factors such as the costs and risks associated with leaving the firm. If research into this could suggest how management could change an employee’s attitude from continuance to affective, management would gain the employees commitment which would ultimately help the organisation when implementing changes, as Meyer et al (1989) found that workers “high on affective performed better”, but the opposite pattern of results was found for continuance commitment.