DaVita is an enterprise specialized in offering dialysis services. It was originally founded and managed by Victor Chaltiel but, after facing severe financial difficulties in 1999, the company offered the CEO position to Kent Thiry. Within the following six years, the new leader and his team achieved significant improvements in the organization and stimulated its growth through cultural reforms and merger and acquisition deals. The ongoing integration with Gambro is the main managerial issue at the given point.
DaVita’s Transformational Change Strategy and Key Success Factors
The situation changed roundly in DaVita by 2005 after an effective transformational change strategy was realized in the company. The implemented plan can be characterized as people-oriented, and its main feature was the focus on culture and value creation. According to Belias and Koustelios (2014) organizational culture is “a pivotal variable in determining the success of efforts to implement change in an institution” (p. 454).
The main reason for this is that the incorporation of new values into the cultural environment leads to desired behavioral changes. In the case of DaVita, the success of the strategy was also substantially determined by the scale of the cultural transformation. The firm’s leaders promoted positive values at every level and increased employee and customer accountability. Such an approach helped achieve significant improvements in terms of the company’s overall performance and human resource management, in particular.
Acquisition of Gambro: Characteristics
The merger with Gambro was a challenging task for Kent Thiry mainly because its organizational culture and structure were significantly different from those in DaVita. However, this strategic move was necessary for coping with environmental changes better and improving business sustainability (Porvari, 2014). Moreover, it was an essential step forward on the way towards the realization of the company’s vision and mission to become the best dialysis enterprise in the world. Nevertheless, it is observed that “most merger failures are attributed to a clash between the organizations’ two corporate cultures” (Vedd & Liu, 2017, p. 73).
It is apparent that working in a formalized and hierarchical environment at Gambro, its employees may find it difficult to accept the policies and behavioral norms, as well as vision and mission, enforced in DaVita, and can resist the change. Thus, Thiry needs to create a unified Gambro-DaVita culture, which would incorporate the best values and practices from both companies.
Recommendations for Managing the Gambro Integration
It is possible to carry out the Gambro integration in a few major steps. According to Porvari (2014), the management should first assess “the mental health of the company” (p. 23). The given activity implies that merger and acquisition are stressful for both parties involved in the deal and there is a need to identify adverse emotions such as uncertainty and cynicism in staff members. If the given problem is not dealt with timely, the company risks losing key talents and lowering employee motivation and productivity.
Secondly, it is necessary to find out “the differences between the companies’ operational structures and how they differ culturally” (Porvari, 2014, p. 24). The given knowledge is important during the process of creating ties between the organizations and developing a proper integration plan, including employee training programs, and strategies for the alignment of incentives. It is worth noticing that aggressive and fast integrations can be more successful than the slow ones (Tiliban, 2015). Nevertheless, in the case of Gambro, it may be appropriate to adopt a gradual approach and combine some of the former Gambro values with the new ones to make the cultural transition more feasible and psychologically comfortable for employees.
“First 100 Days” Action Plan
Leadership support, mentoring, and continual mutual communication are the keys to success in the integration process. Therefore, during the first month, it is essential to establish a trustful dialog with both DaVita and Gambro employees and create a feedback loop. It will help understand the staff members’ concerns, fears, and expectations, and respond to them by providing relevant resources, including education and training. The cultural activities developed based on the identified similarities and differences in the two cultures, as well as employee learning needs and psychological barriers, will be arranged during the following 60 days.
Along with this, the ongoing progress must be evaluated through anonymous surveys, questionnaires, and self-reports. By the end of the first 100 days, the post-integration evaluation should be conducted as well to assess the effectiveness of the action plan and map further tactics.
Preservation of DaVita’s Culture
The protection of the preferred culture is always a challenge during the merger and acquisition. However, leadership and continual promotion of the company’s ideal of employee behavior can help avoid unnecessary changes in DaVita’s culture (Ovseiko, Melham, Fowler, & Buchan, 2015). As stated by Belias and Koustelios (2014), “leaders are recognized as exerting a dominant influence on the direction of cultural norms and basic assumptions in institutional settings” (p. 457). Thus, Kent Thiry and other organizational managers must incessantly adhere to the values they aim to embed in the minds of employees. Additionally, they must comply with high ethical and professional standards to win the Gambro team members’ support and minimize the need for changing something substantially in DaVita’s culture.
Corporate culture is the main strength of DaVita and the major factor contributing to its success. Though Gambro integration is important for growth, it poses some significant risks to the company’s current well-being in terms of employee motivation, retention, and the overall workplace climate. Nevertheless, these threats to culture can be mitigated by using the right leadership strategies, mentorship, training, and communication with employees. These cultural integration practices can help reduce resistance to change over time.
Belias, D., & Koustelios, A. (2014). The impact of leadership and change management strategy on organizational culture. European Scientific Journal, 10(7), 451-470.
Ovseiko, P. V., Melham, K., Fowler, J., & Buchan, A. M. (2015). Organisational culture and post-merger integration in an academic health centre: A mixed-methods study. BMC Health Services Research, 15, 25.
Porvari, T. (2014). Challenges to organizational culture in merger and acquisition situations. Web.
Tiliban, N. E. (2015). A comprehensive analysis of post-acquisition integration challenges. Web.
Vedd, R., & Liu, D. (2017). The effect of cultural integration on financial performance post-merger. Global Journal of Business Research, 11(1), 71-84.