Mergers and Acquisitions: Culture Shock 

The significance of values assessments or behavioral assessment has become critical. This is largely due to the emergence of cross cultural, corporate mergers and acquisitions of companies. Not only does this pave way for a sudden culture shock but it impacts efficiency and productivity in a negative way. But there is a ray of hope, thanks to timely valuesassessments.

Cultural Differences and Values Assessments

The scramble to make mergers and acquisitions succeed would hardly yield good results without a proper strategy for values assessments. Without values assessments or behavioral assessments, it is nearly impossible to understand the dynamics of an organization. This is because every organization is characterized by its own unique work culture and key traits.

Differentiating key traits such as involvement, consistency, mission statement and adaptability happens mostly during a merger or acquisition. This is one of the factors that propel a sudden culture shock. It could span varied responses such as marginally disturbing to highly distressing. This may also happen when employees have a conservative approach to change.

A real life example that can be cited in this context is the famed merger between the Monsanto and American Home Products. Another example is the merger between the Union Pacific and Southern Rail Corporation.

How Values Assessments Cushion Culture Shock

The most common reason to implement values assessments or behavioral assessment is due to the upheaval of culture shock among employees. It is inevitable that most employees in an organization are resistant to even a slight wind of change. So, this clearly indicates that a trend of sweeping changes would not be a good way to go about any merger or acquisition. This is where values assessments become integral as it would cushion culture shock and minimize change resistance to a great extent.

Through effective values assessments, the following aspects can be devised to cushion the pervasive feeling of culture shock among employees during the merger and acquisition process:

• Manage the transition period with ease during cross cultural, corporate mergers and acquisitions.
• Assess the culture of merging organizations and their workforce before it is too late to formulate an effective strategy.
• Assess employee demographics to devise a strategic talent retention analysis and compensation structure.
• Plan cross cultural integration effort with renewed emphasis on effective communication, strong leadership and awareness

 The following chart is based on a study conducted by CGE&Y. This reveals that about 50% of the mergers and acquisitions since 1990 resulted in erosion of shareholder value.

A figure of 33% generated marginal returns but only 17% showed a substantial improvement on increasing shareholder value.

Behavioral Assessment and Culture Shock

Every organization benefits from implementing effective behavioral assessments. It is a known fact that mergers and acquisitions unleash considerable cultural conflicts among employees. These conflicts raise their ugly heads in the changed work environment. As a result, the new structure is crippled by a compelling sense of culture shock.

So, a good behavioral assessment plan enables a clear and in-depth understanding of its employees. With focus on defining the desired work culture, behavior and values, it becomes possible to communicate the actual gap to the employees.

Values Assessments For Smooth Integration