8 APPENDICES
Appendix A Typology of Elements of Organizational Culture……… 122
Appendix B Strength and Weaknesses of Quantitative and Qualitative
Assessments………...124
Appendix C Kubler- Ross Five Stage Model of Emotional Response…………... 125
Appendix D Output Culture Activity Workshop……… 126
Appendix E Overview Model of Literature Concepts ………... 127
Appendix F Results overview Interview Data………... 128
Appendix G Summary of Critical Success Factors Interview Data………. 132
Appendix H Culture Typology and Assessment Tools……… 133
Interview I Interview Scheme MNE managers……… 138
123
Appendix B Strength and Weaknesses of Quantitative and Qualitative Culture
Assessments
Strength and Weakness Quantitative/ Qualitative Cultural Assessments
Strengths
Weaknesses
Qualitative Approach
Ability to probe for
underlying values, beliefs
and assumptions
Time consuming process
Broad , open- ended
inquiry; participants can
raise issues, that matter
most to them
An important issues could
be overlooked; observations
and results depend on
interpretation of a
postponed subject (s)
An important issues could
be overlooked; participants
have more control over the
process
Quantitative Approach
Rapid data collection and
analysis
Some respondents may not
be able to read/ understand
the questions
Facilitates comparison
Interpretation is not
discussed; it is left to the
respondents discretion
An important issues could
be overlooked; focuses only
on preconceived issues and
concepts
Assumptions must be made
about the appropriate group
or groups to sample,
depending on the view of
culture (integration,
differentiation or
fragmentation; Martin,
1982)
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Appendix C Kubler- Ross Five Stage Model of Emotional Response
Five stages of emotional response to change
Emotional Response
Response
Suggestion to Overcome
Denial
Problem has corrected itself and
it will be over soon
Review business case
Exhibit apathy and numbness
Emphasize that the change will
happen
Rationalize change away
Allow time for change to sink in
Anger
Sabotage the change effort
Acknowledge legitimacy of anger
Play shoot the messenger
Distinguish between feelings and
inappropriate behavior
Withdraw from the team
Redirect the blame from the change
agent to the real reason necessitating
the change (goals of the
organization/business case)
Bargaining
Cut a deal to spare them
Focus on how the individual or their
area will benefit from the change
Suggest other concerns to
redirect problem solving
Keep problem solving focused on the
root cause
Depression
Express a loss of control over the
work environment
Provide a series of specific next steps
and follow-up frequently
Increase in absenteeism
Reinforce positive actions the
individual takes
Acceptance
Express ownership for solutions
Use the individual as a coach or
mentor for others
Focus on achieving benefits
Provide recognition for their efforts
Appendix D Output Culture Activity Workshop
How Company B views its Own culture § Push back required
§ Empowered § Setting the bar high
§ Delayed organization and small staff § Broader career path
§ Change oriented § Minimal oversight
§ Giving priority to financial performance § Having a sense of humor § Preferring speed and simplicity How Company A Views Company B’s Culture
§ In your face
§ Process not documented
§ Line-of-business oriented (not project orientation)
§ Decisions do not hold- need to argue and revisit
§ Darwinian system § Financially driven
How Company A thinks Company B’s views A’s Culture
§ Rude, in your face § Undisciplined
§ Nontraditional energy company § High risk takes
§ Stubborn
§ Technologically neophyte
Source: Marks and Mirvis (1998: 199)
How Company A views its Own culture § Responsive to the customer § Program- management oriented
§ Collegial decision making § Respectful of people
§ Participative § Civil
§ Balancing business and technical approaches § Emphasizing ethics and integrity
§ Having structured management § Having problems with small projects How Company B Views Company A’s Culture
§ Bureaucratic
§ Consensus Management § Too polite
§ Unwilling to change § Vertical career path § 1950s organization § Decisions made at the top § Big customer oriented § Project oriented
§ Too serious about themselves
How Company A thinks Company B’s views A’s Culture
§ Bureaucratic § Consensus decisions
§ Gentleman’s club vs. ‘hard assess’ § Arrogant
§ Layers of Management § Respected competitor
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Appendix E Overview Model of Literature Concepts
Marks and Mirvis (1998)
M&A PROCESS
Kubler- Ross (1969)5 STAGE MODEL
Bligh (2006)LEADERSHIP
Lewin, (1947)ORGANIZATIONAL CHANGE
Pre- Combination Combination Post- Combination
De- freezing Changing Refreezing
Disbelief Anger Bargaining Depres sion
Acceptance
Leadership that changes
Leadership that integrates Leadership that embodies
TIME
LEVEL OF CULTURE (Schein, 1980) Level Two Espoused Values: Strategies, Goals Philosophy Level One: Artifacts Visible Organi-zation design, structure and processes QUANTITATIVE CULTURE ASSESMENT - Dimensions Hofstede (1990) - Denison Culture Model (2007) -Dimensions van de Berg and Wilderom (1994)QUANTITAVE & QUALITATIVE APPROACHES
- Human Due Diligence Harding (2007) - Orsini (2006) Value distinction - Drennan (1994) Culture Audit
• QUALITATIVE CULTURE ASSESSMENT - Clinical Research, Schein (1992)
- Ethnography (schein, 1992)
• ACTORS OF CHANGE ASSESMENT - Krueger (1996) Assessment of behaviors and attitude of employees
- Dunham et al, 1989: Assessment of attitudes towards change: cognitive, behavioral and affective • CORPORATE CULTURE ASSESSMENT - Rashid & Rahmann (2003)- Sociability and Solidarity
Appendix F Results overview Interview Data
Pre- Due
Diligence
Due Diligence
Announcement -
Close
Day 1- 90 days First 18
months
Employee
Experience
- Early Euphoria vs. Shock/ Denial - Relief that rumors are confirmed - Fear/ Uncertainty - Mixture of excitement and anxiety - Disillusioned and mentally checked out - Adoption - Acceptance - Continued denial for some
Culture
Challenges/
Risks
- Ensure confidentiality - Limited access to employees - Identify commonalities, differences and the critical success factor of the target company culture - Get Employee Communication right (see communication template below) - Validate previous culture findings - Potential for increased competing behaviors amongst team member (us vs. them mentality)- Manage Key critical employees (e.g.
empowerment, new roles, new ways of working, rewards, career advancement etc.) - Manage Key leaders engagement - Manage massive employee on boarding - Manage employee engagement
Practices
- Conduct high level cultural dd: e.g. through recruitment advertisements, public statements in reporting account, HR specialists, 3rd parties - Cultural Gap analysis: with leadership teams or with other accessible employees - Use of variously named Culture Models for Culture assessments (e.g. Hofstede, Towers Perrin, OCI etc.) - Culture workshops - Focus groups and interviews - Roll out Communication Plan - Celebrate/ share successes - Give positive feedback when people areoperating the right/ new way
- Consequence Management for those that do not display right behavior - Leadership Assessments for Integration Team - Training for integration managers - Future Culture Workshop - Coaching for individual managers on new ‘Ways of Working’ - One on one communication with managers and employees
- Identify key employees which must stay and make retention packages - Identify top 10 ten resistance groups and plan to include them directly in
- Stakeholder
Analysis: e.g. FMEA, fishbone analysis, in and out of frame analysis
- Scenario analysis
129
- Negotiation teams; of possible get to know another outside of work- social activities - Presence of integration team at the site - Social events repeatedly (outside work activities to reduce the element of the ‘unknown’) - Visit each others’ sites/ factories
- Exit interviews with those leaving- link back to M&A centre of expertise
- Translating cultural integration risks into valuation model
- Active involvement of high potential and resisting
employees in work streams
Watch outs
-Bias assumptionsof qualitative assessment - Socially accepted answers when doing questionnaires to asses culture - Be aware that culture clash may come in phases_ e.g. 1 strategic 2 country level 3 operational level
Suggestions
- Negotiation teamclearly communicates knowledge and assumptions on culture with PMI lead team
- Match seller and buyer HR-HR to discuss reappointment of positions for each function and with each function department
- Quick- wins
- Big deals: have PMI lead as close to Board of Management as possible - Integration managers must be well at relationship/ people management - Exchange employees between both companies - Have the acquired
Employee
Feedback/ HR
Measures
- Pulse Survey every 4-6 weeks: are people happy?
131
Employee
Communication
Due Diligence
Announcement-
Close
Day 1-Day 90
First 18
Months
- Communication Target group analysis/ Stakeholder analysis
- Town Hall meeting/ Presentation: Explain reasoning for acquisition, part of strategy, why this company; create a vision; express confidence for the future; create ideology for change
- Presentation by senior level employee e.g. PD head, PMI lead.
- One on one meeting manager and employees/ interview discussing future job changes - One on one meetings with managers and employees - Assign person responsible Communication - Company Package (e.g. company
products, present, folder with company and product information) - Access to Company intranet - Posters of Company and values - Display logo - TV at reception area with Company video/ product display - Monthly update on acquisition e.g. newsletter, website, email, presentation - Highlighting achievements - Q & A session - Around the clock
availability of spokesperson - Feedback channels - Letter home the
evening of announcement - Letter on desk of every employee with background information on acquisition (email or mail)
- Constant update of acquisition progress for all employees e.g. newsletter, website, email, presentation - Highlighting achievements - Manage first key
leaders one-one meetings with employees
- Celebrating the past: one time event to farewell old culture and have formal finishing of this
Appendix G Summary of Critical Success Factors Interview Data
Respondents Critical success Factors in Managing Organizational Culture Throughout the Deal flow
Respondent A ‘1- Leadership that understand the importance of culture and is committed to it 2- Have a common language and culture that managers understand and use. 3- get your medium channels for messaging, new culture and new ways of working set up and agreed on early on 4- use your first 90 Day work stream groups to champion new ways of working.’
Respondent B ‘Be conscious of culture and be able to identify it. Don’t deny it, it’s a fact that is there and keep an open dialogue about it. Learn to respect each other’s qualities. Practice what you preach.’
Respondent C ‘Start at the top: explicitly managing culture through leadership, management team and CEO. Making change tangible, communicate and express change, emphasize quick wins’
Respondent D ‘Integrate quickly (people expect change and don’t let them wonder about, making up own conclusions). Use good communication to avoid rumors. Also, to have an owner for managing culture integration’
Respondent E ‘Gap Analysis- and translation to corresponding change for ‘On- boarding’ plan’
Respondent F ‘For culture- Training, posters, constant retelling of new values. Goal should be to have a Net Promoter Score of 9/10 on norms and values of the company, that the acquired employees would buy the product themselves and are happy to work here with a retention of <8%.’ Respondent G ‘Communication is crucial. Show respect, stick to promises. Give an acquisition update every
two weeks. Set the right example, PMI lead must have good people skills. Get to know each other.’
Respondent H ‘Naming culture as a success factor of integration. It should be recognized as an important element by both management teams and consciously talking about the differences and how to overcome these.’
Respondent I ‘Be clear on culture differences, clearly state integration direction, and good management of the position we are in now, intend to go and how we intend to achieve that.’
Respondent J ‘3 Aspects to an organization: People and Capability, Systems and Processes. Check if these aspects are congruent with the desired culture and what culture matches the way you position these aspects. Keep challenging the organization: Do I have the right people?’
Respondent K ‘Communication, weekly check ups on integration status’
Respondent L ‘Get the differences right: Identify differences that make a difference in your integration. Identify important aspects of culture, yours and the other, recognize and get the right intervention. Must know your own culture components’
133
Appendix H Culture Typologies and Assessment Tools
Organizational Culture Inventory: Human Synergistics
The Organizational Culture Inventory® (OCI) provides a picture of an organization’s
operating culture in terms of the behaviors that members believe are expected or
implicitly required
Source: www.humansynergistics.com Cultural Norms/
Expectations for behavior
Satisfaction Needs People orientation Security
Needs
Task Orientation
Constructive Style Achievement
Buckley 5 Facets (2004)
Facet5 is a 'Big 5' factor personality model, which allows managers to understand how
people differ in their behavior, motivation, attitudes and aspirations and can be extended
to understand culture and values at a team or corporate level
135
Graves Model (2000-2006)
Spiral Dynamics® is a way of thinking about human nature. Its intent is to make living
better for individuals, groups, and even societies by increasing understanding of why we
do as we do, and then to broaden our conception of choices about what we might do next.
The systems identified in Spiral Dynamics arise from the interaction of two elements:
- The life conditions the person or group encounters
- The brain/mind capacities available to cope with such conditions
LIFE CONDITIONS BRAIN/MIND
COPING CAPACITIES A State of nature and biological urges
and drives: physical senses dictate the state of being.
BEIGE N Instinctive: as natural instincts and
reflexes direct; automatic existence.
B Threatening and full of mysterious powers and spirit beings that must be placated and appeased.
PURPLE O Animistic: according to tradition
and ritual ways of group: tribal; animistic.
C Like a jungle where the tough and strong prevail, the weak serve; nature is an adversary to be conquered.
RED P Egocentric: asserting self for
dominance, conquest and power. Exploitive; egocentric.
D Controlled by a Higher Power that punishes evil and eventually rewards good works and righteous living.
BLUE Q Absolutistic: obediently as higher
authority and rules direct; conforming; guilt.
E Full of resources to develop and opportunities to make things better and bring prosperity.
ORANGE R Muitiplistic: pragmatically to
achieve results and get ahead; test options; maneuver
F The habitat wherein humanity can find love and purposes through affiliation and sharing.
GREEN S Relativistic; respond to human
needs; affiliative; situational; consensual; fluid.
G A chaotic organism where change is the norm and uncertainty an acceptable state of being.
YELLOW T Systemic: functional; integrative;
interdependent; existential; flexible; questioning; accepting.
H
A delicately balanced system ofinterlocking forces in jeopardy at humanity’s hands; chaordic.
TURQUOISE U Holistic: experiential:
transpersonal; collective consciousness; collaborative; interconnected.
I Too soon to say, but should tend to be I-oriented; controlling,
consolidating if the pattern holds.
CORAL V Next neurological capacities. The
theory is open-ended up to the limits of Homo sapiens' brain. The theory is open-ended, with the possibility of more systems ahead...
The colors are a way of coding the different types of individuals, where there is no ‘good’
or ‘bad’ color.
137
The integral model is represented by a four-quadrant matrix, comprised of the internal of
the individual, the internal of the collective, the external of the individual and the external
of the collective. All knowledge can be subdivided into these four quadrants.
The four quadrants describe:
• What is going on within the internal of the individual as exemplified by the
individual’s personality.
• What is going on within the internal of the collective as exemplified by the
collective culture.
• What actions and behaviors the individual is displaying as exemplified by the
individual’s character; and
• What actions and behaviors the collective is displaying as exemplified by the rules,
laws, and societal structures.
Appendix I Interview Scheme MNE managers
QUESTIONS
Deal Specific
•
What acquisitions have you undertaken in the past 3 years?
•
Of those mentioned, what was the explicit integration intent: Full and immediate
or preservation?
•
Which of these examples had the most organizational culture issues? How did
they surface, how did you encounter them? Were they unexpected, did you use a
specific approach or ad hoc to resolve issues?
•
At what phases do the culture issues come up?
Process based
•
In the M&A process is there a defined process in which cultural integration is
managed throughout the deal flow? Looking back on the experience you personally
have, how do you believe culture can be best integrated? In which steps of the process?
• Where and how do you obtain the information on culture aspects of the acquired
company? What methods do you use to identify and treat them?
•
As a clear communication plan to employees, especially to the employees on the
acquired side, is said to be of high importance: is there a structured communication
program in you M&A process? Which tools do you use to communicate?
•
What are the critical success factors in managing the organizational culture
differences throughout the deal flow integration?
•
Do you use a structured / uniformly used employee feedback system
•
Do you use specific HR measures to measure integration success?
139
QUESTIONS
Deal Specific
