This topic is concern with merger with two different companies which are from Africa and china and as a manager from both companies I have to examine if the merger is going then what are the cultural problems or any cultural issues coming. Africa and china both are developing countries and both countries have their own culture if they merge two organizations, how the culture fit and how can improve the cultural understanding between two companies from Africa and china. In this topic I discuss about values, what are the scopes what are the limitation and from the merger how both companies gain competitive advantage, and also I mention about what are the cultural issues from the merging two companies.
For this topic of merger I have to take two companies and it also from same sector because in the merger process both companies are same field which objectives are same and they doing work same. So I take South Africa airways from Africa and Air China from china. They both are from the same sectors so it easy to merge both companies.
South Africa airways (SAA) from Africa it's a large international and domestic airline company it was started in 1934 by government of South Africa as union air ways. The head quarters of South Africa airways (SAA) are in OR Tambo international air port, South Africa. It first served city were Durban, Capetown and Johnishberg. It serves 37 destination word wide and 32 its international destinations across 26 countries and 5 are domestic destinations.
Air China is the 5th largest airline company in Asia and 5th largest airline company in the world. It is 18th largest company in the world by fleet wise it was started in 1988 the head quarters of Air China were in Beijing Capital international airport, Chengdu shaugliu international airport and Shanghai pudong international airport. It serves more than 120 destinations worldwide.
Organization culture:
Different organization and different countries have their own cultures. Organization culture is based on their tradition, history and structure. Culture gives identity to the organization and also gives the answer what we are? What we stand for? And what we do? Culture tells that position of the company in the market, it also tells what are the objectives of the company and what organization doing. Culture also reflects organization tradition, rituals values, beliefs, norm, meaning and also language.
There are 3 types of culture,
A power culture: This type of culture is based on one or smaller number of individual within in small organization or part of big organization.
A role culture: this type of culture is uses hierarchical structure of an organization where every individual have their own role to perform. And also specified job description and rules.
Task culture: In this type of culture whole team doing particular task together to achieve their goal.
A person culture: in this type of culture task is done by individually.
Organizational Culture Is - "The set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments."
The Layers of Organizational Culture are observable
Values & Assumptions Assumptions and Values are deep-structure elements
Assumptions: taken-for-granted beliefs about reality & human nature
Values: social principles, philosophies, goals, and standards considered to have intrinsic worth
Manifestation occurs when specific values, behavioural norms are evoked perceptually, cognitively, or emotionally
Realization occurs when values are expressed in outcomes or acts
Artefacts & Symbols
Artefacts: the visible, tangible and audible results of activity that are grounded in values and assumptions
Symbols: anything that represents a conscious or unconscious association with some wider, usually more abstract, concept or meanings
Symbolization translates artefacts into symbols, linking an artefact's literal meaning to its subjective meanings
Interpretation links previous assumptions to possibilities for new symbolic understandings
What symbolic meanings do you attach to these artefacts (Schein,2006)
In a joint venture when South Africa Airways (SAA) and Air china became partners they combined their knowledge and became one of the armoured as world leading airline company.
They introduced Common structures like Air Africa China airline Services. This helps them to change the scope of their partnership, the meaning of their union and what they expect from each other. Through joint venture a research shows that the organisation can set up common organisational routines and synchronise their mechanism and it finally helps in the effective transfer of knowledge.
What degree of national culture do people leave behind to accept the organisational culture?
The policy and analytical significance of 'national culture' largely depends on what degree of causal power is attributed to it - from a mere epiphenomenon, a powerless superstructure to, at the other extreme, a supremely self-governing variable, the power in society.
Physical Environment - Cultural diversity, language and distance gap in collaborative projects were the main obstacles in the development of this project but South Africa Airways and Air China agreed to allotting delegations but these delegations were not appropriate in the functional requirements and these components could not meet the set of rules.
Language
Korine, Asakawa, and Gomez (2002) discovered three steps the company had to take to formulate their team performance:
To develop a thorough knowledge of each other by making joint team studies.
Encourage South Africa Airways to change strategies apply change rather than avoiding it.
Induce new management policies and new strategies through encouraging entrepreneur traits for South Africa Airways.
Although the main problem in the alliance was more of adjusting into organisation cultures but also to the cultural preferences that the employees had in both the organisations and it threatened of more of cultural war in the companies and it raised due to the language barriers.
Hofstedes Culture Typologies in comparison to South Africa Airway and Air China
Power \distance:
A country's business culture is not only a division of a national culture but the expression of a national culture to the amount that this can be known in the way businesses operates.
Both South Africa Airways and Air China are organisations that are synchronised by the distance and power factors because they provide their various services around the globe.
Masculinity/ Feminity:
For example, a manager with a 'feminist' attitude might out of sympathy scruple to dismiss workers where it would be profitable. In a competitive environment this can mean a serious cost disadvantage that eventually disciplines the manager to do dismiss employees in order to cut costs and increase profits. In effect, then, this manager has been forced to follow a more 'masculine' attitude.
The same competitive force will discipline a particularistic manager who selects his suppliers mainly by the alliance of South Africa Airways and Air China.
Individualism/Collectivism While China has repeatedly beaten Western countries by their own weapons, it has always insisted on "maintaining the Chinese spirit". In this sense it has always combined continuity with change, but always rejected a change with traditional values. (Durlabhji and Marks 1993 pg 6-17)
Merging the cultures/ Cross Culture Management"
Cultural differences will most likely turn out to be of a minor problem for Air China and of advantage for South Africa Airways. The main reason for this probably surprising forecast is that the two companies' corporate cultures have shown unambiguous signs of convergence. (Research by Clerc,1999)
Values
Following are more discussions, it was decided that partnership structures
Should adhere to the following principles:
• They should be simple and understandable by both companies;
• They should be transnational
• They should facilitate assurance and intelligibility
• They should be based on the spirit of a target achieving scenario which returns them profit.
• None of the Partners should be favoured or disadvantaged
• No partners should lose its cultural recognition variety and image
• Continuous communication between companies despite of distance, should be fuelled in the determination of association every time. (Research by Clerc,1999)
Cultural problems during the merger:
Lack of communication is a serious issue for merging organizations, the purposeful preservation of information from employees on the part of the senior executives who are dealing with the merger is also one of the major problems, and contributes to confusion, uncertainty and loss of trust and loyalty of employees. Several authors argue that, as organizations move from functional forms to network forms, organizational performance becomes increasingly dependent on trustful relations between organizational members. A high level of trust within a network form is seen as a functional equivalent of building and maintaining control in functional forms (Miles and Snotrust, partly brought about by managerial beliefs, philosophies and actions, reduces transaction costs. If relationships are of a trusting nature, expenditures on control, checks, monitoring and the like can be minimized
(Cumming and Bromiley, 1996; Powel, 1990; Sheperad and Tuschinksky, 1996).
In addition to this idea, some authors argue that if control is not minimized, trust will decline, because trust and control are central elements of two organizations. Handy (1993) even states that as a result, trust in subordinates and control over their work on the part of the manager is a constant sum, whereas an increase in the amount of control decrease the amount of trust by the same quantity solutions. The question of how these careful balanced solutions look like is still to be answered, partly because little is known about which managerial behaviours or actions make a difference in the eyes of subordinates as to whether a manager is trusted or distrusted. The balance between managerial behaviour and the trust among their subordinates can be minimized by shared norms, because they diminish the chance of people misinterpreting mutual expectations. For example a person who does not want to harm others might do so if he or she doesn't understand their norms and expectations. An important means to proceed towards more sharing of norms is a regular dialogue between two parties, in which the ways of thinking and reasoning are exchanged and norms and expectation are explicitly communicated. (Garfinkel,
1967) Argyris (1983) argue that dialogue can involve exchanging ways of thinking and reasoning that have brought about conclusions people draw on each other's behaviour. Merely exchanging conclusion does not bring about a common learning process. Learning about each other's way of reasoning adds to mutual understanding, and assists comparison: is the other's one's reasoning really so different or just an alternative pathway taken from a common ground? Do the alternative paths reply to specific situations, each with its own success value? Can they be seen as supplementing each other? Can both ways of thinking be combined in a new logic?
How to lead the people during the merger:
During a merger phase it is managing the people of both firms that should be of utmost importance. The hardest aspect of managing people is to take their culture into consideration. In a company, of course there will be people from diverse background. But it the leader with appropriate leadership approaches who can make this difficult transition easy and enjoyable for the employees of both the firm. As commonly know, during a merger there is certain amount of ambiguity and doubt amongst the employees regarding their job security, new management etc.
At this phase, it is important to reassure the employees and make them feel comfortable with the new management regime. Assuming that leader understand change. Management would be a stupid and dangerous mistake to make. It is the responsibility of the top management to offer appropriate and timely training to all the change leaders. Communication is the key to success of such change process so, working closely to the team is a good beginning. Keeping employees involved in new activities and sharing their outputs can only be beneficial. HR should be responsible for smooth implementation of such straggles.
People:
Appoint right person for the right job. It should be made sure that leadership team has an equal understanding of the challenge involved in such transition. Their roles and leadership style should be aligned with the goals and objectives of the organization. Management should be aware of the signal from the first appointment especially when one company is taking over another. HR should make sure that the selected candidate the right ones for the future of the new organization. Staff exit schemes and transfers are very important for the perception of the change process. Exit schemes and selection criteria should be designed that the key corporate knowledge is retained. Identify and encourage 'change champions' within the organization. The ultimate goal should be to establish one organization culture.
Improve cultural understanding:
In the phrase of improve cultural understanding between the two group of manager effective communication is very useful tool. Communication is helpful in all organisation activities good communication useful to make a way and basis for everyone activities it is useful for everyone to work through the same goals and also communication gives them a same direction and purpose.
Communication is also helpful for recognising multiple cultures within organisation and to helpful collaboration among the culture. The proper management of change in an organisation can be possible due to proper communication in the organisation. Communication is also very important to make employees less resistance to change. The results also indicate that the initiative for communication must come from top management and that it should be continuous throughout the merger it is also important that the there is no any discrepancy between action and words too often the implicate messages as conveyed in formal communication. Communication is important tool to manage a change such as merger it also reliable to avoid confusion.
Motivation is also very useful features to improve cultural understanding between two managers with the help of motivation organisation encourage to people to achieve their goal.
To improve cultural understanding make both organisation as similar as possible by attaining a common businesste culture.
Limitation of Hofstede
Hofstede has been subject to broad limitations. Among the Limitations:
Single company's data, with a large Multinational Enterprise having a strong corporate culture.
Time dependent results, which are an artifact of the time of data collection and analysis.
Business culture, not values culture, representing a reflection of business culture at Multinationals and not national culture of the countries operates within.
Non-exhaustive, doesn't identify all the cultural dimensions possible, but just a few.
Partial geographic coverages, cover only a portion of the world's cultures and countries.
Western bias, which values western business ideals.
Attitudinal rather than behavioral measures, with no connection between employee attitudes and employee behaviors.
Ecological fallacy, national level data generalized into individual behavior.
(Luo et al (2002)
Conclusion:
Hence, by analyzing various literatures, communication seems as the most important perspective to be understood in the whole merging process. Moreover, if different culture background has been acknowledge. The second how to proper manage the cultural merger process? In the process of cultural merger trust was also found to be key factor in furthering co operation between groups with different cultures. Regular conversation among the merged organization seems to be a key factor in trust building. I discuss about the merger of different companies which are from Africa and China and also discuss about the culture change after merger and how to lead the people of organization after merger and how to encourage them to achieve organization objectives. I also discuss about what are the cultural problems during the merger? And also discuss about how to improve cultural understanding during the merger. To encourage the employee during merger communication is most helpful tools and also motivation is also essential for survive after the merger
