Introduction
The nature of the health care industry is like combining the medical industry and the human touch. The health care industry includes the delivery of health services by health care providers.
Merger means joining of two companies together to form a new company. This gives firms competitive advantages like economies of scale, technological advances. Through a merger, there will be an increase in the product line of the firm. Through the merger, the companies can reduce the cost of advertising. But there will be an increase in the monopoly as they become a huge company. There will be a threat for the smaller companies as they cannot meet the competition. So to reduce the monopoly the Government is taking action. The companies have to make sure that there will be any problems between the management of the company, stakeholders, etc. Some managers will resist the merger because they think that after the merger they will be out of the company. But one important factor that is missed by many organizations is the problems that might arise out of the combination of cultures that exist within these companies or organizations.
The role of organizational culture in this context
“Basically, organizational culture is the personality of the organization. Culture is comprised of the assumptions, values, norms and tangible signs (artifacts) of organization members and their behaviors.” (What is culture, 2009). The culture that is distinct to each individual organization is the result of years of development. The employees will sooner or later come to understand it through experience and observation. There is no particular rule as to how employees come to understand the culture that exists in their organizations. Comprises of a whole lot of factors like the goodwill of the organization, its past history, the feedback they receive from the members of the public, the quality of the management, and even the way things are done around here. Cultures vary from organization to organization. It is okay when they are competitors, but when two diverse cultures meet, the management will be faced with a great challenge of how these two viewpoints can be balanced.
During the merger, the company has to identify that there is a similarity between the company’s vision and mission. They have to give importance to the culture of the countries in which the companies are coming. They have to also consider the languages spoken.
But healthcare seemed to be different. Mergers and acquisitions have long been common in the world of the business-the automotive industry, banking, consumer products companies, even legal firms. “Business wants to be succeeded, which for much business means achieving sustained profitability, among other goals. To do so organizations search for a favorable competitive position.” (Shaw, 2006).
Mergers affect not only the organization structure but also people who are a part of the organization all parties involved. It will cause a change in internal and external and external roles, relationships. According to Peter Senge “People want change, they don’t want to be changed.” (Wreden, 2003). It means at any stage the employees should feel that they are also a part of the organization for that the managers must give importance to the suggestions and views. “A company’s culture can be defined as its values attitudes and believes, established by executives, the culture is immersed into the environment through communication, supervisors and daily operators.” (Codere, 2009).
After merging every organization will have some changes in the sales and the outlook of the new organization. Because after the collaboration the two companies have become one and the customers and the customers may not know what type of output they get from the new company. The company employees are responsible to make a good image of the company. In the new organization, there will be employees of both companies. So both of them should respect each other’s culture. This will lead to a new culture. There can be good or bad cultural change after the collaboration. So in order to avoid that before the merging itself, they can analyze the strength and weaknesses of both the companies. At the time of merging or when the talk about the merging is taking place, the employees may feel fear about the new environment. Sometimes the employees may not feel free to talk as well as work with. It may lead to conflicts and that may lead to problems while working and this may also lead to poor customer service this will cause unsatisfied customers. Here in this case the two companies are competitors, the employees of the parent company will feel dissatisfied with working with the employees of the acquired company. This can be avoided by forming an employee council. The parent company has a competitive advantage of having inpatient and outpatient services. And also they considered the acquired company as their enemies since they were competitors. By giving a proper guide, training, etc this type of problem can be avoided. The parent company should take care of the working conditions that they are going to provide to the employees of the acquired company. The management should give proper guidelines about the company hierarchy. This will give a secure feeling for the employees. And adopting high-performance HR practices and resources as well as after can help companies achieve long term success.
Common quality vision
After the collaboration there I,s a chance of arising some problems related to the culture.
Also, there can be some ego clash among the employees of the parent company and the acquired company. It is the responsibility of the middle manager to resolve the problem and to make sure that the problem will not arise further. They can introduce a post of diversity manager to settle up these types of problems after the collaboration. Before the collaboration takes the middle manager can inform the employee about the merger and ca ask the feedback and it is the obligation of the middle manager that to ensure the job security to the employees since they are going to merge with their competitors. The Decision making and control should be controlled among the key personnel in the collaborating organizations. The flexibility as well as the adaptability of the employees and managers is crucial in managing collaborative efforts. The middle manager is one who can directly consult with the employees as well as the managers’.So he can be in the role of employee grievance handler. He is responsible to give the ideas about the company’s vision and mission. And he should give guidelines to the acquired company employees about the areas which they are new to. He should share the new objectives of the company. And should motivation to work in a new environment. Educate and communicate the employees about the collaboration are two easy.
After the merging
Since the companies are from same industry it is called Horizontal merger. After the merging the organization will have a new face in all the sense.Sometimes there will be changes in the organizational structure also. Some time the organization may have to lay off the existing employees. So the managers have to handle these problems wisely. Some time they may have to add or cut the hierarchical position. Since this organization is dealing with health care they can implement division of labor, they can provide fair compensation, merit and rewards. They can implement internal competition and offer some prizes on monitory and non monitory basis so that they can improve the employee morale, then the employees will be more interested to work. (Deschamps, 2008).
The organizations should merge in all the areas like
- Cultures
- Languages
- Governance
- Performance and billing rates
- Practice areas
- Clients
- Internal communication and development of personal relation relationship
- Administration
- Mission and Vision of the two companies.
The employees must be clearly told about the structure of the compensation. A manual for operations and human resources should be maintained and updated regularly. An integrated compensation program has to be formulated for top management, partners, and indirect support staff. Developmental and training programs for each member of the staff have to be formulated and implemented. This is to ensure that all staff members work in a consistent manner in accordance with the aims and objectives of the organization.
Conclusion
Organizational culture is an important aspect of any organization. As mentioned above it develops over a period of time and cannot be changed easily. This is because of the human factor involved. As Peter Senge put it, that people would love to see changes in their external matters, but are not willing for a change within themselves. In this case, two organizational cultural clashes can occur. One is that the company that is bought did not have any great opinion of the company into which it merged. On the other hand the company that took over had some departments (and hence experience) with regard to inpatient and outpatient departments. These apparently small factors to an outsider are not a small matter to the employees concerned of both companies. The fact that the merged company had a culture which had a poor opinion of the company into which they merged is an instance. It is really not the fault of the employees in this particular case. Instead of trying to improve in whatever areas they are familiar with, the management allowed or maybe even promoted the belief that they are somehow superior in terms of quality. Once the merger took place, the employees (of the merged company) found that they were under the command of a group of people they thought inferior. It requires commitment from the management of the new company to bridge the culture gap between the beliefs of the two companies. They should make an effort to bring in a culture that can be imbibed by all the employees of both the companies. It is a difficult exercise, but is possible with patience, vision, and proper training.
Actually the primary purpose of merging is to improve overall performance. And increase utilization of present resources. Acquire outstanding management or technical personnel. Since the company
References
Codere, Karen. (2009). Merging cultures when companies collide. The Business Ledger: The Business Newspaper for Suburban Chicago.
Deschamps, Ryan. (2008). What can organizational structure do for user centered change. The Palient Leader Network.
Shaw, Diana, M. Vitale. (2006). A tale of two health care collaborations: A case study of process and change. Brandeis University.
What is culture. (2009). Free Management Library.
Wreden, Nick. (2003). More great quotes. Fusion Branding.