Indian Journal of Industrial Relations: Economics & Social Dev.

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Organizational Culture in Bank Mergers & Acquisitions


Affiliations
1 Tata Institute of Social Sciences, Mumbai, India
     

   Subscribe/Renew Journal


The author examines the important role played by cultural factors in mergers and acquisitions. Analyzing the case of acquisition of one bank by another, it examines the cultural issues that had the potential to arise when two alien cultures came together after commencement of the integration process. It was found that similarities/dissimilarities between two cultures were not analyzed before the decision to acquire was taken. The study also found that as the two banks had very different cultures and needed high degree of integration, threat of cultural conflict was very high. It was however prevented by the management of the acquirer by following a proactive acculturation strategy.
Subscription Login to verify subscription
User
Notifications
Font Size


  • Buono, A. F., J. L. Bowditch & J. W. Lewis (1985), “When Cultures Collide: The Anatomy of a Merger”, Human Relations, 38 (5): 477-500.

  • Hofstede, G. (1997), Culture and Organization: Software of the Mind, Mc Graw Hill

  • Jeris, L.S, J.R. Johnson C.C. Anthony (2002), “HRD Involvement in Merger and Acquisition Decisions and Strategy Development: Four Organisational Portraits”, International Journal of Training and Development, 6(1): 2-10

  • Kotter, J. (1992), Corporate Culture and Performance, New York: Free Press

  • Larsson, R.& M. Lubatkin (2001), “Achieving Acculturation in Mergers and Acquisitions: An International Case Survey”, Human Relations, 54(12): 1573–1607

  • Legatski, T. W. (1998), “Downsizing, Downscoping and Restructuring: Classifying Organizational Change”, Research in Organizational Change and Development, 11:253-70

  • Nahavandi, A. & A.R. Malekzadeh (1988), “Acculturation in Mergers and Acquisitions”. Academy of Management Review 13 (1): 79–90.

  • Schein, E. H. (1985), Organizational Culture and Leadership: A Dynamic View, San Francisco. CA: Jossey-Bass.

  • Schein, E. H. (1983), “The Role of the Founder in Creating Organizational Culture”. Organizational Dynamics, 12(1): 13-28

  • Schweiger, D.M. (2001). M & A Integration: A Framework for Executives and Managers. New York: Mc Graw Hill

  • Schweiger, D.M. & M.G. David. (2005), “Facilitating Acquisition Integration Through Deep-Level Cultural Learning Interventions: A Longitudinal Field Experiment”. Organization Studies, 26(10): 1477–99

  • Taylor, E. B. (1958), The Origins of Culture. New York: Harper & Row Publishers

  • Weber, R.A. & C.F. Camerer (2003), “Cultural Conflict and Merger Failure: An Experimental Approach” Management Science, 49(4):400-15


Abstract Views: 310

PDF Views: 0




  • Organizational Culture in Bank Mergers & Acquisitions

Abstract Views: 310  |  PDF Views: 0

Authors

Hema Bajaj
Tata Institute of Social Sciences, Mumbai, India

Abstract


The author examines the important role played by cultural factors in mergers and acquisitions. Analyzing the case of acquisition of one bank by another, it examines the cultural issues that had the potential to arise when two alien cultures came together after commencement of the integration process. It was found that similarities/dissimilarities between two cultures were not analyzed before the decision to acquire was taken. The study also found that as the two banks had very different cultures and needed high degree of integration, threat of cultural conflict was very high. It was however prevented by the management of the acquirer by following a proactive acculturation strategy.

References