ACCA Applied Knowledge · Business and Technology · The formal and informal business organisation
Two companies merge. One has a formal, rules-driven approach, and the other encourages informal, autonomous teamwork. Which of the following is the most likely consequence of failing to manage the cultural differences?
The most likely result is conflict and resistance, as staff from each firm cling to their own norms and values. Unmanaged cultural differences after a merger typically cause friction and misunderstanding rather than automatic efficiency gains or the disappearance of informal networks.
- AImmediate improvement in efficiency due to diversity of approach
- BConflict and resistance among staff as each group's norms clashCorrect
- CElimination of the informal organisation in both firms
- DA guaranteed move to a person culture
Explanation
Differing norms and values commonly cause friction, misunderstanding and resistance after a merger when culture is not managed. There is no guaranteed efficiency gain, the informal organisation will persist, and no automatic move to person culture occurs.
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