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  • Essay / Managing Change in Organizations - 1980

    Managing Change in Organizations We would like to start with some facts to show the importance of managing cultures in organization and how lack of change management could haunt businesses in terms of mergers and acquisitions. The challenges of merging, and therefore changing two organizations, are enormous and always require a lot of resources and the right people. According to Business Journal: “Successfully merging cultures is difficult, traumatic and crucial. Individuals and businesses with different histories, values, expectations and beliefs are encouraged to take a unified perspective and be a cohesive unit. This is made more difficult by the fact that in almost all merger situations there are perceptions of "winners" and "losers", as well as fears and uncertainties about the future. The stakes are considerable. Simply put, mergers often fail, and cultural conflicts are one of the main reasons for this failure. A 10-year study of 340 major acquisitions found that the total shareholder returns of 57% of merged companies lagged behind their industry average three years after the merger (Lublin and O'Brian, 1997) . Other studies conclude that more than 60% of mergers fail to achieve their objective (Carleton, 1997). And according to the New York Times or the Wall Street Journal, this clearly demonstrates that successful fusion of cultures (i.e. avoiding "culture clash") is essential to positive merger outcomes. . In fact, many management experts cite cultural conflicts as the primary cause of merger failures (Lublin and O'Brian, 1997). Several recent mergers have suffered from cultural conflicts. For example, the successful merger of Harty Press, a traditional printer, and Pre-Press Graphics, a high-tech desktop publishing company, was undermined by severe culture shock (Welles, 1994). Cultural conflicts following the merger of Boeing Co. and McDonnell Douglas caused Boeing to deviate, with its shares well below pre-merger levels (Bernstein, Reinhardt, and Browder, 1998). Likewise, the acquisition of Santa Fe Corp. by Burlington Northern for $4 billion, the largest in history at the time of its completion, became one of the industry's most disappointing, largely due to unforeseen cultural differences. Many other culture-related merger disappointments could be cited. It is then obvious that managing culture is so important and in this article we will explain why managing change is so difficult and why there is always resistance. It is clear that employees do not always appreciate change and that there are the main obstacles, as shown by numerous studies carried out over the years...