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Mergers don't always lead to culture clashes - Essay Example

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From an overarching perspective MBNA’s culture was much more free-spirited than Bank of America’s. MBNA exhibited a greater entrepreneurial spirit, while Bank of American’s culture was…
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Mergers dont always lead to culture clashes
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Mergers dont always lead to culture clashes There were many aspects of Bank of America and MBNA’s culture that were incompatible. From an overarching perspective MBNA’s culture was much more free-spirited than Bank of America’s. MBNA exhibited a greater entrepreneurial spirit, while Bank of American’s culture was more bureaucratic. The MBNA culture was also accustomed to a level of perks. There was a company jet, a golf course, yachts, and high salaries. Conversely, Bank of America’s culture grew by thrift. In addition there were differences in terms of dress code, with MBNA having formal dress and BOA implementing business casual.
It appears that the cultures appeared to work rather than clash because of Bank of America’s experience in mergers and acquisitions. After Bank of America acquired MBNA, BOA went through and selectively determined which aspects of the corporation they could keep and which they could do away with. While there was a level of employee departures after much of the job perks were eliminated, the company was able to retain much of the talent. Ultimately, it seems BOA’s ability to mesh the two cultures through their experienced approach was the leading force in making the merger work.
Culture is important to the success of a merger acquisition. Culture constitutes the backbone of any corporate model and is not simply the indicative of social relations within the company. Even in corporations that are not reliant on a heavy emphasis on independent thought, the nature of culture is reflected in the very structure and work processes that constitute an organization. I believe that oftentimes mergers fail because the structures of these organizational cultures are not just different, but structurally incompatible. While Bank of America and MBNA’s culture was on different spectrums, they were still on a structural level that made it possible for a successful merger.
I believe that a component of the smooth transition is attributable to both companies glossing over differences in an effort to make the merger work. Still, I believe that this is not a primary component of the merger’s success. In large part employment options, especially in the post-recession context, are determined by market factors and necessity. This places employees in a situation where ‘extraneous culture elements’ – golf courses, etc. – are amenities, but not essential to operations. It’s more necessary to consider structural components, such as skillsets, and how these elements are aspects of the culture. If these structural components are compatible, then differences in ‘extraneous cultural elements’ will be glossed over. Read More
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