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CASE INCIDENT 1 Mergers Don’t Always Lead to Culture Clashes

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Mustika Resa C

on 29 November 2014

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Transcript of CASE INCIDENT 1 Mergers Don’t Always Lead to Culture Clashes


MBNA's cultured was characterized by a free-wheeling ,entrepreneurial spirit that was also quite secretive.MBNA employees also were accustomed to the high life.

Why do you think their cultures
appeared to mesh rather than clash?
When these two organizations merged ,everyone thought they would not succeed .
First at all ,the above-the cart wages to MBNA's employees were cut againts all odds.A hybrid dress code was adapted and executives of both companies began by comparing thousands of practices covering everything from hiring to call center operations .(Dash,2007).It is clear that both organizations wanted this merge to work .By Adopting some of each others' policies and cultural practices,they managed to create a succesful merger.
Do you think culture is
important to the success of a
merger/acquisition? Why or why not?
Yes,I do .
Culture is a boundary-defining role ; it creates distinctions between one organizations members .
Culture is probably the most important aspect to consider when looking to merge / acquire an entire different organizations .
Thank you for your Attention
In what ways were the cultures of Bank of America
and MBNA incompatible?
The culture of Bank of America and MBNA were incompatible because MBNA's culture was characterized by a free-wheeling entrepreneurial spirit that was also quite secretive .MBNA employees also were accustomed to the high life .There corporate headquarters in Wilmington ,Delaware could be described as lavish and ,and employees throughtout the company enjoyed high salaries and generous perks from the private golf cours at at its headquarters ,to its fleet of corporate jets and private yachts ,Bank of America ,in contrast ,grew by thrift ,It was allow cost no-nonsense operation.
CASE INCIDENT 1
Mergers Don’t Always Lead
to Culture Clashes
by : Resa c. Mustika
aSSET MANAGEMENT B

a lot of mergers lead to culture clashes and,ultimately,failure.So in 2005 when banking giant Bank of America (BOA) announced its $35 billion acquisition of credit card giant MBNA.
BOA, in contrast,grew by thrift .It was a low cost,no-nosense operation .Unlike MBNA ,it beleived that sized and smarts were more important there speed
The cultures in the two companies were very very different
Unike MBNA ,It believed that size and smarts were more important than speed
How much of the smooth transition,
if any, do you think comes from both companies glossing over real differences
in an effort to make the merger work?
To try to manage the cultural transition ,executives of both companies began by comparing thousand of practices covering everything from hiring to call-center opertaions .In many cases BOA did impose its will on MBNA
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