Page 231 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 12: Behavioural Implementation

Notes
Figure 12.1: Methods of Managing the Culture of an Acquired Firm
How much Members of the Acquired Firm
Value Preservation of Their Own Culture
Very Much Not at All

Perception of the Attractiveness of the Acquirer Very Attractive Not at All Attractive Integration Deculturation
Assimilation

Separation

There are four general methods of managing two different cultures. They are: (1) Integration (2)
Assimilation (3) Separation, and (4) Deculturation.
1. Integration involves merging the two cultures in such a way that separate cultures of both
firms are preserved in the resulting culture.

2. Assimilation: Here, the acquired firm willingly surrenders its culture and adopts the
culture of the acquiring company.
3. Separation: Here there is a separation of the two companies’ cultures. They are structurally
separated, without cultural exchange.
4. Deculturation: This involves imposition of the acquiring firm’s culture forcefully on the
acquired firm. This often results in much confusion, conflict, resentment and stress.

Example: When AT & T acquired NCR Corporation in 1990 for its computer business, it
replaced NCR managers with AT & T Managers, reorganised sales, forced employees to adhere
to the AT & T code of values called the “Common Bond” and even changed the name of NCR.
The result was that by 1995 AT & T incurred huge losses, and the NCR unit was put up for sale in
1996.

Case Study Shaping the Culture at NOKIA

okia was founded in 1865 when engineer Fredrik Idestam established a mill to
manufacture pulp and paper on the Nokia River in Finland. Although Nokia
Nflourished within Finland, the company was not well known to the rest of the
world.
In 1985, Ollila joined Nokia and held a variety of key management positions before
moving to the helm of affairs in 1992. His leadership played an important role in shaping
Nokia's culture and led the company's reinvention as a mobile communications company.
Contd...

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