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Organizational Culture
 Organizational Culture
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Organizational culture: the set of shared

values and norms that controls organizational
members’ interactions with each other and with
people outside the organization
 Organizational Values
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Values: Guiding principles that people use to

determine which types of behaviors, events, situations,
and outcomes are desirable or undesirable
Terminal value
 Can be changed
 desired end state

Instrumental value
 core values, permanent in nature
 a desired mode of behavior
 Organizational Norms
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Norms: standards or styles of behavior that are

considered acceptable or typical for a group of people
Terminal and Instrumental Values in an
Organization’s Culture
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 Case Analysis
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Mind Tree CSR: The Small Company with Big Heart

EXERCISE
 Differences in Global Values
and Norms
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A country’s culture can affect the values and norms

of a company or a company’s culture

Video- HSBC Bank

Culture and M&A
 Culture and M&A
 75% cited “harmonizing culture and communicating
with employees” as the most important factors for
successful post-merger integration. (Mercer, 2004)

 67% cited cultural integration as the most critical

success factor in an M&A deal – even more important
than business-process integration. (The Economist
Intelligence Unit, 2006)

 Only 30% of M&A are successful (2007 Report)

 Of the failure, 60% are attributed to cultural mismatch

related
 Culture and Mergers and Acquisitions
Roger Harrison’s model of culture

 Power Culture
 Role Culture
 Task/achievement Culture
 Person/support Culture

Questionnaire on Culture
 Culture and Mergers and Acquisitions
Power culture
 Centralization
 Individual decision making
 Individual members motivated by a sense of personal
loyalty to their boss or the owner
 Inequitable reward system
 Low morale and feeling of powerlessness among
workforce
 Culture and Mergers and Acquisitions
Role culture
 Achievement of maximum efficiency
 Views as a collection of roles rather than a collection of people.
 Tend to be result oriented
 Things get done according to the corporate bible
 Power tends to be hierarchical and is derived from one’s role or
positions
 Extremely status conscious
 Functions well in stable conditions
 Culture and Mergers and Acquisitions
Task/achievement culture

 High emphasis on accomplishing the task

 Commitment to specific task energizes individuals.
 What is achieved is more important than how
 Flexibility and high levels of worker autonomy
 Potentially creative and satisfying to members
 Lack of formal authority
 In times of crises they change to role culture
 Culture and Mergers and Acquisitions
Person/support culture
 Is egalitarian, and minimal structure
 Culture exists to nurture the growth and development
of its members
 Information, influence and decision making are shared
collectively
 The organization is subordinate to the individual for its
existence.
 Tends to operate in its purest form only in
communities and cooperatives and not in commercial
organizations
 Culture and M&A

The success of a merged corporation often depends

on its ability to integrate effectively the two
previously independent organizations.
Although integration may be thwarted by any
number of factors, extant cultural differences
between the organizations involved in a merger often
prove vital