ACCA Strategic Professional · Strategic Business Leader · Enabling success: organising
Aldersgate Insurance acquires Pennine Mutual, which has a collaborative, consensus-based culture, whereas Aldersgate is hierarchical with strong control systems. Integration is planned within six months. Which assessment best reflects the likely cultural issue and the most suitable implication?
Cultural clash is likely, so management should map both cultural webs and deliberately decide which elements to keep or change rather than assume the acquirer's culture will prevail. Embedded paradigms and routines rarely merge naturally, and ignoring them risks lost value and staff attrition.
- ACultural clash is likely, so management should map both webs and decide deliberately which elements to preserve rather than assume the acquirer's culture will prevailCorrect
- BCulture is intangible and has no effect on integration success, so it can be ignored
- CThe cultures will merge naturally within six months, so no action is needed
- DPennine Mutual's culture should be removed immediately by replacing all staff
Explanation
Differing cultures commonly cause post-acquisition conflict and lost value. Mapping the cultural webs of both entities helps management identify the conflicting elements and choose which to retain or change. Assuming natural merger ignores how deeply embedded routines and paradigms are, and wholesale replacement is destructive and unnecessary.
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