Rationale and Contribution
Background of Topic
Most human resource (HR) researchers, and practitioners involved in the merger process readily agree that the personal, interpersonal, group, and intergroup dynamics that follow the combination of two firms are significant determinants of merger success or failure. As a growing body of research continues to document, such combinations typically have far reaching and often dysfunctional effects on those involved (Buono and Bowditch, 1989; Buono, et al, 1989; Jemison and Sitkin, 1986; Marks and Mirvis, 1986; Schweiger, et al; 1987; Schweiger and Walsh, 1990). A merger or acquisition can sufficiently transform the structures, cultures, and employment prospects of one or both of the firms such that they cause organizational members to feel stressed, angry, disoriented, frustrated, confused, and even frightened. For the individuals involved, these feelings can lead to a sense of loss, psychosomatic difficulties, and marital as well as personal discord. Yet, what is often overlooked is that M/As not only disrupt the lives of individuals but inevitably destabilize the organizations involved as well. Inter-firm consolidations often precipitate lowered employee commitment and productivity, increased dissatisfaction, high turnover, leadership and power struggles, and a general rise in dysfunctional behaviors such as sabotage.
Statement of the Problem
The study intends to investigate the effects of mergers of companies that are of different fields, particularly in its organizational culture. Specifically, the study is set to answer the following questions:
1. What are the perception on their company and the careers of the employees before the merger?
2. What are the effects of the merger of diverse companies in the perception of the employees retained?
3. How do the companies manage its administrative aspects in the early periods preceding the mergers?
4. How united are the personnel of the merged companies in having a single organizational culture?
5. Does the existing organizational culture of the merged companies aim at a singular goal?
Theoretical Framework
The impact of an appropriate organizational culture on the well-being of the business organization has been explicitly recognized by many organizational researchers (Dennison, 1984; Camerer and Vespalian, 1988). Tunstall (1986) proposes that a company’s culture is the amalgam of shared values, behavior patterns, mores, symbols, attitudes, and normative ways of conducting business that, more than its products or services differentiate it from all other companies. Further, culture may influence what organizational strategies are selected and whether they are successful (Cartwright and Cooper, 1993; Marcoulides and Heck, 1993; Wilkins and Dyer, 1988). Existing cultural orientations may be quite supportive of the mission and success of a firm at a particular point, but not at all appropriate when significant strategic change becomes necessary. This paper addresses the need for cultural evaluation, feedback, and possible change facilitation as needed to successfully align with necessarily imposed strategic change.
Culture has traditionally been recognized as a consideration in the strategy implementation process (Bourgeois and Brodwin, 1984; Nutt, 1986; Galbraith and Kazanjian, 1986). Culture is assumed to explain the success of some organizations (Peters and Waterman, 1982), to represent an essential element in effectiveness of organizations if it fits the strategy (Schwartz and Davis, 1981), to act as a determinant of strategy (Ackerman, 1982), or as an influence on the implementation of strategic decisions (Schwartz and Davis, 1981). Such claims contribute to the recognition that culture plays a large role in the overall implementation of strategy. As such, culture must play a critical role when dramatic, significant strategic change is mandated.
Hypothesis
This study would like to test the following hypothesis:
“The merger of companies of different orientation significantly affects its organizational culture.”
Scope and Limitations
The study intends to investigate the effects of mergers of companies that are of different fields, particularly in its organizational culture. For this study, primary research and secondary research will be used. Primary research will be conducted using anonymous questionnaires that will be sent to the personnel of a merging company. The questionnaires will be used to collect quantitative data and the interviews will be used to provide qualitative insights into the data collected.
The data will be analyzed and compiled for the correlation of the hypothesis. The data will then be presented by means of graphical representations and illustration and the difference would be highlighted. A negative correlation between the variables would suggest that the hypothesis is null, that is, the merger of companies of different orientation significantly affects its organizational culture.
Review of Related Literature
Organizational culture is a set of beliefs, assumptions, values, artifacts, and symbols that are largely shared by an organizational community (Hatch 1993; Kabanoff et al. 1995), and that are manifested and thus become empirically observable in people’s perceptions and behavior (Hofstede 1999; Fiol 1991). As values tacitly underpin human decision and action, organizational culture exerts a significant influence on organizational performance (Bendixen and Burger 1998; Gordon and DiTomaso 1992; Kotter and Heskett 1992) and the performance of organizational change in domestic (Schwartz and Davis 1981) and cross-national contexts (Very et al. 1996; Adler 1986; Mirvis and Berg 1977). Organization strategists regard culture as a key competitive resource (Barney 1986).
The consequences of culture become particularly apparent in cross-national operations, mergers, and acquisitions, where not only different organizational cultures but also organizational cultures rooted in different national cultures meet (Very et al. 1996; Schneider and DeMeyer 1991). When organizational members from diverse cultures interact and, especially, when one culture is required to adopt the methods and practices of the other culture, disruptive tensions emerge. These have been described in terms of the concepts of acculturative stress or culture clash (Very et al. 1996; Nahavandi and Malekzadeh 1988). The conflicts mostly result from the introduction of new management methods that are incongruent with the values underlying existing practices (Wilkins and Ouchi 1983; Schwartz and Davis 1981). Yet, despite cultural diversities between the members of merged or acquired organizations, a sense of community, loyalty, and commitment can still evolve if the practices and values of the parent company are perceived by the managers of the acquired organization as just and fair (Very et al. 1996; Kim and Mauborgne 1991).
Where acculturative stress does occur, it has many negative impacts, including reduced employee commitment and cooperation (Buono et al. 1985), increased executive- and senior-management turnover (Hambrick and Cannella 1993), and reduced financial performance of the acquired organization (Chatterjee et al. 1992; Datta 1991). In cross-national ventures, these factors can indeed become so significant that they can constitute a major barrier to strategic change (Very et al. 1996; Lorsch 1986).
Another aspect to look into is the notion of organizational identification. According to Tompkins and Cheney (1985), organizational identification occurs when a decision-maker (i.e., an employee) chooses an alternative that best promotes the perceived interests of the organization. Extant research has linked organizational identification to a wide variety of organizational phenomena and behaviors including organizational house organs (Cheney, 1983), organizational commitment (Cheney & Tompkins, 1987), decision-making premises (Bullis & Tompkins, 1989), organizational socialization (Bullis & Bach, 1989), self-managing teams (Barker & Tompkins, 1994) and supervisor communication behaviors (Myers & Kassing, 1998). Collectively, this research has suggested that identification influences and is influenced by organizational processes and perceptions (Myers & Kassing, 1998).
Although previous researchers have focused on factors related to varying levels of employee identification and commitment, such as absenteeism (Angle & Perry, 1981) and turnover (Porter, Crampton, & Smith, 1976), much less is known concerning antecedents of organizational identification. Bullis and Bach (1991) reported that multiplex network relationships were positively related to identification, leading them to suggest that identification is influenced by the presence of social interaction. Likewise, Myers and Kassing (1998) discovered that supervisor communication competence was a significant predictor of subordinate identification, and Bullis and Bach (1989) concluded that identification is integrally related to organizational socialization. Most of this research, however, investigated undergraduates’ experiences with summer jobs (Myers & Kassing, 1998) and graduate students’ experiences with departmental socialization (Bullis & Bach, 1989). This study sought to extend existing research on organizational identification by exploring the relationship between employee perceptions of organizational culture and identification within a retail sales organization. Flamholtz (1995) argued that at the apex of strategic organizational development is the development of an appropriate organizational culture within which management feels it can guide the organization. Given Cheney and Tompkins’ (1987) assertion that organizational identification is as much a continuous process as it is a product, employee perceptions of an organization’s culture may influence levels of employee identification with the organization.
Methodology Research methodology and techniques for data collection
Research requires an organized data gathering in order to pinpoint the research philosophies and theories that will be included in the research, the methodology of the research and the instruments of data interpretation. In this study, the Research Process “Onion” will be utilized so that the findings of the study can be thoroughly established. The inner part of the onion describes the methodology portion whereas the outer part discusses the strategies that can be utilized in interpreting the results of the findings.
The descriptive research method uses observation and surveys. In this method, it is possible that the study would be cheap and quick. It could also suggest unanticipated hypotheses. Nonetheless, it would be very hard to rule out alternative explanations and especially infer causations. Thus, this study will use the descriptive approach. This descriptive type of research will utilize observations in the study. To illustrate the descriptive type of research, Creswell (1994) will guide the researcher when he stated: Descriptive method of research is to gather information about the present existing condition. The purpose of employing this method is to describe the nature of a situation, as it exists at the time of the study and to explore the cause/s of particular phenomena. The researcher opted to use this kind of research considering the desire of the researcher to obtain first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study.
The research described in this document is partly based on quantitative research methods. This permits a flexible and iterative approach. During data gathering the choice and design of methods are constantly modified, based on ongoing analysis. This allows investigation of important new issues and questions as they arise, and allows the investigators to drop unproductive areas of research from the original research plan.
This study also employs qualitative research method, since this research intends to find and build theories that would explain the relationship of one variable with another variable through qualitative elements in research. These qualitative elements does not have standard measures, rather they are behavior, attitudes, opinions, and beliefs.
Furthermore, as we define the qualitative research it is multimethod in focus, involving an interpretative, naturalistic approach to its subject matter. This means that qualitative researchers study things in their natural settings, attempting to make sense of, or interpret phenomena in terms of the meanings people bring to them. Accordingly, qualitative researchers deploy a wide range of interconnected methods, hoping always to get a better fix on the subject matter at hand.
Data analysis techniques
The primary source of data will come from a survey conducted by the researcher among personnel of the company. The primary data frequently gives the detailed definitions of terms and statistical units used in the study. These are usually broken down into finer classifications.
The secondary sources of data will come from published articles from social science journals, theses and related studies on organizational management. Acquiring secondary data are more convenient to use because they are already condensed and organized. Moreover, analysis and interpretation are done more easily.
Validity of the Data
For this research design, the researcher will gather data, collate published studies from different local and foreign universities and articles from social science journals; and make a content analysis of the collected documentary and verbal material. Afterwards, the researcher will summarize all the information, make a conclusion based on the null hypotheses posited and provide insightful recommendations on the dealing with the culture in merged companies.
For validation purposes, the researcher will initially submit a sample of the set of interview questions and after approval; the survey will be conducted to five respondents from the respondent companies. After the questions were answered, the researcher will ask the respondents for any suggestions or any necessary corrections to ensure further improvement and validity of the instrument. The researcher will again examine the content of the interview questions to find out the reliability of the instrument. The researchers will exclude irrelevant questions and will change words that would be deemed difficult by the respondents into much simpler terms.
The researcher will exclude the five respondents who will be initially used for the validation of the instrument. The researcher will also tally, score and tabulate all the responses in the provided interview questions. Moreover, the interview shall be using a structured interview. It shall consist of a list of specific questions and the interviewer does not deviate from the list or inject any extra remarks into the interview process. The interviewer may encourage the interviewee to clarify vague statements or to further elaborate on brief comments. Otherwise, the interviewer attempts to be objective and tries not to influence the interviewer’s statements. The interviewer does not share his/her own beliefs and opinions. The structured interview is mostly a “question and answer” session.
Project time plan TASK Months
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
Select topic
Undertake preliminary literature search
· Define research questions
· Write-up aims and objectives
Select appropriate methodology and locate sources of information. Confirm access.
Write-up thesis plan
Undertake and write-up draft critical literature review.
Secondary and Primary Data Detailed
· Sources
· Consulted
Research Findings:
· Analyzed
· Evaluated
· Written-up
Discussion:
· Research findings evaluated and discussed in relation to the literature review
Methodology written-up
(including limitations and constraints)
Main body of the report written-up and checked for logical structure
· Conclusions drawn
· Recommendations made
Introduction and Executive Summary written-up
Final format and indexing
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