Mergers involve the combination of two different cultures.
Mergers are common in the business world as the pressures of the free market drive businesses into combining their resources with each other. Not every merger is a success. There are definite characteristics to the businesses that are most successful in making a merger. These characteristics can be examined and used to reveal key insights about organizational structure and the ways that the free market system operates. Past mergers have changed the business landscape.
Redundancy
One of the reasons for undergoing a merger is to combine the redundant parts of separate organizations. In this way the revenue of two separate companies may be combined while their combined costs are actually reduced. This process often entails layoffs and so the steps toward consolidation can be painful ones for the people involved. The most successful organizations in mergers are ones that find the most redundancy that can be eliminated.
Cultures
Every company and large organization develops a culture that is unique to it. This culture will help to determine the attitudes that people take to different tasks and how they accomplish their goals. In a merger there is often a clash of cultures as two different organizations interact with each other and attempt to become one. Organizations that take advantage of a merger are able to resolve conflicts of culture and develop new collective attitudes.
Change
Mergers are inevitably accompanied by major disruptions as organizations attempt to merge their separate components and adopt new ways of doing things. Organizations that are able to take advantage of a merger are more likely to be ones that already had a good way of coping with change. The more dynamic the two organizations involved in a merger are, the more likely that they will be successful. Conservative organizations find mergers much harder to accomplish.
Scale
The most successful organizations in a merger are ones that find a way to combine their businesses so as to increase their economies of scale. By purchasing goods and services in larger quantities it is possible to significantly lower their price. Organizations that increase their size in this way through a merger are able to lower their costs of doing business. Not all merger organizations are able to take advantage of these kinds of savings.
