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M&A Buyer: Company Culture Types

Now that you understand that there may be different cultures embedded in the organizations, how do you proceed?  Several studies have shown four basic culture types in any company:

  • Task Achievement
  • Role
  • Power
  •  Support

The culture type can be diagnosed with a simple questionnaire, or the Due Diligecne reviewers can often determine the culture type by observing day-to-day activities and processes.  A brief explanation may be helpful:

  • Task Achievement: This type of organization focuses narrowly on task achievement.  Business creativity may be limited to direct problem solving, with fairly rigid timetables, resource allocation, and specific deliverables as the business operates.  These are often the easiest to integrate, since the integration can be organized into a series of simple tasks with timetables, defined resources and specific deliverables.
  • Role:  People that can relate to the organization’s vision, and mission staff the organization.  Personnel know that they can influence the company operations.  This type of organization is easier to integrate/change once the people understand the vision and mission.  They will understand that they can influence the change process, and will accept their role, and execute integration/change tasks. 
  • Power:  The boss heavily controls the organization, with very little creativity and self-determination.  Once again, the boss’ directives create rigid timetables, allocation of resources, and specific deliverables for normal business operations.  The power organization will be more easily integrated if the ‘boss’ accepts the goal, and enthusiastically directs the activity to achieve the goals.  Of course, if the ‘boss’ does not embrace the goal, the integration will be a very difficult task.
  • Support: The organization has the most freedom for self-actualization.  Broad business challenges are solved through creative and very personal solutions.  While these may be the most liberal and creative organizations, this is often the most difficult integration/change process, since the organization is driven by the individual self-actualization motives.  There may be many different motives and creative solutions to integration, driven by individuals that have historically enjoyed the freedom to develop their own solutions.

When I encounter these culture types, I try to reframe the major challenges to accommodate the culture encountered.  Examples follow:

  • Task Achievement:  The integration leadership should carefully assess the integration process, and effectively delegate narrowly defined tasks within the organization.
  • Role: Frame the integration process by sharing the ultimate goal of the acquisition, and appeal to the organization’s creative problem solving.  Make the success of the integration personal, and let the organization develop the integration plan.  Use their creativity to get to the solution.
  • Power: Thoroughly engage the ‘boss’ so that he enthusiastically accepts the integration/change goals, and develops the plan that can be effectively delegated – directed – to his subordinates.  This will be a very difficult integration, if the ‘boss’ doesn’t embrace the goals.
  • Support: This is often the most difficult integration since there are often many free spirits driven by their own creativity and personal motives.  The integration leadership must have the Wisdom of Solomon to position the integration challenges to align the staff’s personal motives to achieve the acquisition goals.

Change is always difficult… integration is change.  Knowing the culture often makes the task simpler and more effective.