Indian Journal of Industrial Relations: Economics & Social Dev.

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Organizational Culture in Bank Mergers & Acquisitions


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1 Tata Institute of Social Sciences, Mumbai, India
     

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The author examines the important role played by cultural factors in mergers and acquisitions. Analyzing the case of acquisition of one bank by another, it examines the cultural issues that had the potential to arise when two alien cultures came together after commencement of the integration process. It was found that similarities/dissimilarities between two cultures were not analyzed before the decision to acquire was taken. The study also found that as the two banks had very different cultures and needed high degree of integration, threat of cultural conflict was very high. It was however prevented by the management of the acquirer by following a proactive acculturation strategy.
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  • Organizational Culture in Bank Mergers & Acquisitions

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Authors

Hema Bajaj
Tata Institute of Social Sciences, Mumbai, India

Abstract


The author examines the important role played by cultural factors in mergers and acquisitions. Analyzing the case of acquisition of one bank by another, it examines the cultural issues that had the potential to arise when two alien cultures came together after commencement of the integration process. It was found that similarities/dissimilarities between two cultures were not analyzed before the decision to acquire was taken. The study also found that as the two banks had very different cultures and needed high degree of integration, threat of cultural conflict was very high. It was however prevented by the management of the acquirer by following a proactive acculturation strategy.

References