The Reality of Work Cultures in the Modern Economy - Case Study Example

THE REALITY OF WORK CULTURES IN THE MODERN ECONOMY Introduction Business acquisition and merger are not unique practices in the corporate world since they take place almost daily. It has advantages making many organizations that want to acquire competitive advantage to resort to it. Similarly, it has proved the effectiveness in that it helps new companies in marketing as well as in gaining or acquiring the customer base of the mother organization. Many companies resort to merger and acquisition when introducing their brands in the new market since it helps them to use the already established infrastructures, as well as consumer’s traffic. However, it also has challenges hence one needs to carry out due diligence to overcome them. For instance, different corporate cultures affect the realization of the benefits, and this works for employees as well as the new organization. This paper will discuss the case of Rosenfeld and its acquisition of Cadbury. It will examine the traditional values of Cadbury and the ways they are different with Kraft. Employment values traditionally associated with Cadbury and their differences with Kraft Cadbury was one of the largest and known companies producing chocolate and other creamy products in the UK. The company employed many workforces on permanent and contract in order to deliver services to the large consumer base (Rigby 2010 c). The company also outlined the values in which it related and expected its employees to adhere, and it was important in achieving competitive advantage. However, the company and its employees lost all these values upon its acquisition by Kraft (Marino 2010). It was a loss to the employees as their benefits and the work culture they enjoyed could no longer be guaranteed. One of the traditional values of Cadbury was adequate compensation for work done (Cadbury 2010). Employees were paid for their work without any problem, and this helped in boosting their morale when working. The payment for every worker based on the output and was assured of pay when time reached. This value was important to the traditional company only to be changed by Kraft since it could no longer pay the workforce leading to job loss (Eaglesham 2010). Secondly, Cadbury recognized the value of job security as all employees were guaranteed a job (Scott 2009 b). The company achieved this by opening many distribution and manufacturing centers across with hopes of employing many people and making them secure their jobs. Job security has proved to be an important factor and a motivator of employees’ performances (Beaudin 2010). However, Kraft does not share this value since they do not guarantee their employees permanent employment, but instead retrenches or sacks employees through closing some of their plants (Stiff, Ralph & Stiff 2011). This was detrimental to the organizational culture that Cadbury developed, and it was beneficial in improving employee’s participation in the organizational projects. Thirdly, Cadbury respected its employees and communicated with them daily (Beaudin 2010). Communication is very important and employees should be informed the decision that companies are undertaking and involve them (Leggett 2010). Cadbury was open to employees and communication structure, or channels were easy and efficient since they got the information from the top on a regular basis. Because of this, employees felt the organization respected them making them affiliate with it. However, the case is different since Kraft is not open to employees and keeps on shifting positions (Leggett 2010). It assured employees job security and changed since it was closing some of its plants. Kraft does not give proper communication to its employees regarding the fate of their jobs, hence indicating the loopholes and disrespect to employee’s values (Beaudin 2010). Significance of ownership change on working values and employee-employer relationship Change of ownership within any organization may have a positive value or negative depending on its execution. Over the years, companies have been changing ownership for one reason or another, and some have improved more than their predecessors while others have lagged. For this reason, there are many factors contributing to a breakthrough of a company. Similarly, change of ownership affects the employees since they have to acquit themselves with the new leadership shakeup, and this might affect their relationship in one way or another. Hence, it is critical for an organization to consider how the change in ownership will influence it towards achieving the anticipated goals and objectives. The ownership change affects the employee’s working values as well as their relationship with the employer in that they have to understand the new leadership style that comes (Stern 2010). Every leader has a leadership style that he or she depicts, and it may take employees’ time to understand and content with such leadership. Hence, employees shy away from leadership style they have not encountered as it may be so authoritative or too lenient to affect their values. Secondly, ownership changes affect the organizational culture since each leader has a culture he or she wants to be embraced (DATAMONITOR 2009). Former employees of Cadbury had developed a culture, which they identify themselves as well as the organization, and this had to change. The employees had to find alternatives and new ways of doing things, hence shifting from the traditional practices. Similarly, drafting new organizational culture may not be achieved within a short time since it develops with time. For this reason, employees may be pressurized to deliver before developing a culture, which they understand. Because of this, employee-employer relationship may not be good enough since they both need time to understand one another as well as all that involved (Jim 2010). Lastly, ownership change erodes employees and organizational values (Scott 2009). Cadbury had developed organizational values, which was friendly to employees and consumers, but changed with the acquisition. The good name of the organization was spoilt since the new ownership came with a new style and values making it ignore the earlier developed ones. Because of this, the culminated values were eroded, and the consumers and employees had to develop new values, which the new ownership believed suited their interests. In turn, this had an adverse effect on the organizational stakeholders since it had performed with laid down values, and all in the society knew them. Kraft eroded all the values, hence leaving room for conflicts and confusion among employees and consumers. Impact of culture change on employees Change, in any given parameter, must influence the organization in a positive or negative dimension depending on its execution (Leggett 2010). Kraft initiated culture change without considering the impact it would have on the organization. Although the earlier established culture by Cadbury was productive, the change in culture where stakeholders were not involved was destructive to the organization. In this case, the cultural change worked against the wellbeing of employees and the organization, hence was a loss in totality. One of the effects of culture change to employees was reduced productivity due to lack of motivation. Former employees of Cadbury working at Kraft had reduced output because of the new culture. Their jobs and employment opportunities were under threat since the ownership was closing some plants. This de-motivated employees since they were worried and didn’t know their next move. Because of this culture change, the organization recorded a reduced productivity from employees. Secondly, change of culture made employees take long as they acquainted themselves with the expectations (Skapinker 2010). Learning a new culture following a change is time-consuming, and this has a devastating effect on the company since employees become slow when carrying their duties. For this reason, the production of employees is reduced not because of lack of motivation, but because of the slow process of learning. No employee wishes to make a mistake because this resulted in job loss, hence cautions when handling assigned duties. Lastly, it leads to job loss to employees who are unable or unwilling to cope with the new culture. Not all employees are willing to embrace any culture introduced in the company, and this makes others resort to resigning or looking for other alternatives of earning a living. Similarly, some employees were fired because of the incapability of performing to meet the expected standards. In this case, many employees may be out of employment because of the difficulty in understanding the new culture. For this reason, it will have an adverse effect on them since they are the key stakeholders. How change affected characters and work ethic of employees Change is very important when executed in a manner that all stakeholders are aware and involved. This may be through integrating their inputs by involving them. Organizations that respect their employees when making major decisions or implementing changes do realize results since their inputs are incorporated. In the case of Kraft, employees involvement was lacking, and these made everything go beyond their expectations and were in for a shock when the organization closed some plants. First, the changes affected the employees since they withdrew their loyalty. It takes time to know an employer hence one guarantees his or her loyalty that was never the case with Kraft. Employees become loyal to the employer depending on the ways they are treated and incentives that it delivers to them (Rigby 2010 a). Threats with sacking letters and lack of job security make employees withdraw their loyalty and fight the organization in order to retain the job. Secondly, some employees had to change their ethics for the worst or best in order to survive the new management. In any given ownership scenario, it must have some principles that others adhere to and some which are rude and keeps people at bay. For this reason, employees changed their ethical behaviors in order to adapt to the new system and deliver to their expectation. On the other hand, others who did not welcome the new ownership had to change their behavior or character for the worse because they were fighting to retain their positions (Rigby 2010 b). It is painful losing a job because of ownership changes without knowing the next course of action. Conclusion Organizational change is very useful when it identifies parameters or areas that need redress, or it outlines visions. It also takes time for an organization to develop a corporate culture since there is always resistance and barriers before it is implemented. For this reason, cultural change may be difficult to forgo mostly among the employees in case there is a change of ownership. As in this case of Cadbury, the whole transaction went against the employees’ wishes since the new ownership threatened their jobs. Because of this, the new ownership had to establish a new culture, and this would take a longer time. Reference List Beaudin, G 2010, Kraft-Cadbury: Making Acquisitions Work, BusinessWeek.com, p. 9. Cadbury: a British icon is nearly in Krafts hands 2010, Marketwatch: Global Round-Up, 9, 3, pp. 69-7 DATAMONITOR: Cadbury Case Study, 2009, Cadbury Case Study: Retaining Leadership Position in the Confectionery Market, pp. 1-15. Eaglesham, J 2010, Mandelson attacks Kraft on Jobs. Financial Times, 1-2 Jim, A 2010, Krafts Cadbury bid a bad deal, says investor Buffett, Evening Standard, p. 33. Kraft Foods Cadbury bid cheers European loans bankers as M &A deal prospects start looking up 2009, Euroweek, 1121, p. 62, Leggett, J 2010, From Quakers to suited psychopaths. Financial Times, 1-3 Lucas, L 2011, Kraft to cut one seven UK jobs. Financial Times, 1-2 Marino, J 2010, Kraft-Cadbury Deal Should Spur More M &A, Mergers & Acquisitions Report, 23, 4, p. 22 Rigby, E 2010 a. Kraft given food for thought. Financial Times, 1-3 Rigby, E 2010 b, Cadbury staff issued with pension ultimatum. Financial Times, 1-2 Rigby, E 2010 c, Kraft censured in UK over Cadbury deal. Financial Times, 1-2 Scott, M 2009 a, Krafts Risky Play for Cadbury, Business Week Online, p. 12. Scott, M 2009 b, Why the Cadbury Deal Matters, Business Week Online, p. 8. Skapinker, M 2010, Why do business titans need to ‘give back’. Financial Times, 1-3 Stern, S 2010, A history lesson for Kraft’s leaders. Financial Times, 1-3 Stiff, P, Ralph, A & Stiff, P 2011, Kraft prepares to cut 200 Cadbury jobs as promise passes its sell-by date. The Times News Paper, 1-51 Read More