Mergers Always Lead to Culture Clashes

The cultures of Bank of America and MBA were incompatible because Mamba’s culture was characterized by a free-wheeling, entrepreneurial spirit that was also quite secretive. MBA employees also were accustomed to the high life.

Their corporate headquarters in Wilmington, Delaware, could be described as lavish, and employees throughout the company enjoyed high salaries and generous perks from he private golf course at Its headquarters, to Its fleet of corporate Jets and private yachts. Bank of America, in contrast, grew by thrift. It was a low cost, no-nonsense operation.

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Unlike MBA, it believed that size and smarts were more important than speed. The cultures of both companies were so different that they became Incompatible. However, to everyone’s surprise the merger worked.

This was done by Bank o? Both Bank of America and MBA appeared to mesh because executives of both companies began by comparing thousands of practices covering everything from ring to call-center operations. Because of this, both cultures co adapted.

Mamba’s dress code was much more formal than Bank of America’s business casual approach. In the end, a hybrid code was adopted, where business suits were expected in the credit card division’s corporate offices and in front of clients, but business causal was the norm otherwise.

This author believes that culture is important to the success of a merger/acquisition because with culture, the two companies or organizations can learn from one another and gather ideas of how to make the company better. “In many ways, it makes sense to consider mergers in the same light as acquisitions. It has become a truism that there is no such thing as a merger – one side will come out dominant in each function, even in the friendliest of mergers” Katz, D.

2010). Mergers can be a deeply depressing time, especially if the leaders possess a communication failure causing it to be sparse. The best way to handle this is to communicate with every employee using different tactics. Tactics like face to face conversations so that people can understand the merger.

The author believes that the smooth transition that came from both companies in an attempt to make the merger work was because of Bank of America’s foresight to know which MBA practices to attempt to change, and which to keep in place. Especially critical was Bank of America’s appreciation and respect for Mamba’s culture.

Also, Clifford Skeleton had helped manage Bank of America’s acquisition of Bloodstone Financial before moving on to MBA. Conclusion Mergers are a common tactic that many companies or organizations pursue to make their business more successful.

Unfortunately for most of the employees working for that company, the merger is kept secret. It is also likely that the public will be kept out of the merger as well. It boils down to one big secret as it is taking place.

The majority of mergers do not succeed. However, many companies still pursue the merger for a number of reasons. The main reason is so one company can profit from loosing company to use the losses as a tax write-off while causing their company to row.