1 Discuss the positives and negatives of corporate culture i

1.    Discuss the positives and negatives of corporate culture in the competitiveness of a firm. Relate how firms should deal with different corporate cultures in mergers and acquisitions.

Solution

Corporate culture

Culture is the result from a variety of practices, influenced by the values, customs, beliefs, and attitudes of the people in the group.

Values, beliefs, and attitude followed by employees in a corporate environment constitute culture of that workplace, which is termed as corporate culture, influenced by the company’s mission, vision, goals, etc.

Effects of corporate culture

Corporate is constituted by a group of people from different sections of the society with variety of thoughts, beliefs, customs, language, etc. Thus, every organization differs in their culture from the other. In case of mergers and acquisitions, cultural environment is effected as two or more organizational culture become one and thus differences arise. It is the responsibility of the corporate to effectively manage these differences by considering the prospective results.

Well-handled culture in case of mergers and acquisition can provide many benefits to the organization as:

Opportunity to learn from new business management techniques from another group.

Scope for area of operations increases.

Develop the corporate’s goodwill in the market.

Benefits can be derived from the work experience of different personnel.

However, it has the following advantages:

Conflicts in decision making.

Biasness factor is also a possibility in certain cases.

Loss due to the position and status of acquired organization in the market.

Market price of the shares might face a downfall.