Elementsof a Successful Merger
Elementsof a Successful Merger
Theinternational business environment is experiencing dynamic changesdue to globalization, consumer demands, advanced technologies andeconomic instabilities. To counter this, corporations decide to entermergers since it has become a crucial element in the contemporarycorporate commercial world. The merging process does not exclude thearts organizations as evident in the proposed merger between UtahOpera and Utah Symphony. In theory, mergers are meant to create valuefor both the offeree and the offeror company shareholders.Practically, the process is quite complex and needs thorough analysisbefore the decision to engage. In this paper, I will aim to offerstrategies and recommendations to Ms. Ewes that will revolve aroundthe different organizational cultures, structures, and communicationissues that arise in the case. I will do this by assessing thesimilarities and dissimilarities of these two organizations, whichwill be a challenge or advantage to the merger.
Ina merger, corporations should anticipate challenges in a similarcapacity to advantages with regards to culture. As pointed out byWeek 8 (ppt), culture represents common norms and values and enhancefirm performances through motivating employees and ensuring intensecoordination. Opera and Symphony merger involved the arising concernsabout the involved parties’ dissimilarity and the conflicts thatmay surface following the merger owing to diverse organizationcultures. It is evident that Opera attracts audiences from Utah andthe surrounding states at its own capital theatre, the Salt LakeCity, and performs four yearly productions (Delong & Ager, 2005).On the other hand, Symphony, between 2000 and 2001, made above 200performances in facilities owned by the County and is part of theGroup II symphony orchestras. Therefore, Opera mainly focuses onfixed assets while Symphony placed more emphasis on its budget.Additionally, Opera does not contract their performing artistsdespite having 23 full-time personnel, whereas Symphony contracts itsentire orchestra alongside having 33 permanent workers with distinctorganization cultures.
TheAmerican music field declared Opera subordinate to Symphony becauseof the differentiated performance difficulty levels and the trainingdurations. Indeed, the symphony members tend to be too proud andrefuse to acknowledge the musical potential of Opera players. Inagreement with Chatman & Cha (2003), most people seem to be fondof persons who possess similar traits or attributes. With this, theemployees of these two companies are most likely to developconflicts. Particularly, the tension in this will occur because themerged company wants to declare Opera’s General Director as itsCEO, even though the Symphony members show some dissatisfaction onthe matter.
Organizationstructure has the capacity to establish a system through whichdisorder is filtered into order (Session 5, ppt). Therefore, it isimportant for companies to design an appropriate structural design toavoid role confusion and contradictions, issues with coordination,information sharing, and slow-decision making. In agreement withSession 5 (ppt), also includes official policies and rules thathighlight defined job descriptions and standardized procedures.Looking at the case, Symphony and Opera has different organizationstructures, which may pose a challenge in terms of adaptation. InSymphony, the CEO oversees operational administration includingcommunications, personnel, marketing, finance, development, andpersonnel. Further, the Music Director supervises the associateconductors, musicians, artistic administrator, educational programscoordinator, and guest conductors (Delong & Ager, 2005). Theresponsibility separation allows these leaders to focus on their lineof responsibility to ensure goal attainment. On the other hand,Opera’s organization structure corresponds to Ewers’ leadershipstyle since it has a high amount of deputized authority. In her post,Ewers supervises the Director of Operations who oversees severalmanagers and directors who administer differentiate organizationalfunctions. The company draws distinctions between its leadership andmanagement indicating that Ewers concentrates on leadership whereasthe other managers and directors manage the company.
Themerger of these two companies ultimately presents differences in theorganizational structure. As noted by Soongswang(2014),organizational change is a behavioural shift involving an entireorganization. Therefore, change requires reshaping and dismantlingorganizational structures, their culture, hierarchies, and strategiesto enable new adaptable working patterns. To counter issues withorganizational structural change, Ewers should employ intenseemployee training to allow employees from both companies to adapt tothe current company requirements.
AnneEwers toughest job before and directly after the Opera and Symphonymerger will be the high musician salary at Symphony that rangesbetween $50,000 and $85,000. The issue will be very sensitive andwill need the employment of patience and an appropriate communicationstyle. To avoid internal merger discord, the newly proposed CEOshould not discuss the union salary issue before finalizing themerger, given that employees are vital components of anyorganization. Though this, the public will perceive a unifiedorganization that supported the decision to merge. In agreement withPfeffer (2005), this will allow the members of both companies to workas a team, offering numerous advantages. Firstly, the employees willhave control of their actions within the merged organization andfoster motivation. Secondly, the corporation will enjoy a high senseof personnel responsibility and accountability for the functioningand ultimate accomplishment of the organisation. Consequently,Pfeffer (2005) claims this provokes intensified creativity,initiative, and effort among the workers instead of directing all theresponsibility to the company’s superiors.
However,compensation renegotiations with the union are paramount at the righttime even though Symphony functions in an inflexible manner. Despitethis, it is impractical for this union to seek an elevated membercompensation whereas their salaries already surpass those given toother symphony members. The short-term resolution would require Ewersto employ the expertise of skilled and knowledgeable negotiators inthe best interest of the proposed merger. It is important to notethat decentralizing decision-making would allow her to focus on otherissues as she oversees the creative answers brought forth by theprofessional negotiators (Pfeffer, 2005). The long-lasting solutionwould require the board, leadership, and personnel at Symphony toinfluence their funders into giving them sustainable amount of fundsthat would comfortably support the delivery of their yearly programs.Resultantly, the merged corporation will highly rely on extrinsicfunders.
Symphony’sunionized personnel need to appreciate that funding provisions maycompromise the new firm’s capacity to practice employee investment.To guarantee that they are on board with the company’sbudget-setting process, Ewers should let them participate in theprocess. As asserted by Tannen (2000), this makes them understand thegrander decision-making and strategic planning procedures. Ewers andrepresentative negotiators should have a solid personal connectionwith the personnel. Such a move would make it easier to eliminate theanticipated obstacles linked to the agreement negotiation. Inagreement with Week 7 (ppt), an organization’s communicationcompetence banks on the shared information. Ewers should make thepersonnel and their union leaders understand the financial situationby enlightening them. Tannen (2000) claims employees needrelation-building investments and communication that will allow theydevelop a common commitment to the mission of any firm.
Furthermore,with the issues of financial sustainability in the arts market owingto reduced government support, these merged organization may worktowards increasing their private donations and utilize differentfund-raising means. They can try to expand this private contributionplatform by developing future audiences and alluring additionalpatrons. College students are the future audiences and have a highchance of taking interest in events related to performing arts. Ewerscan target this audience by incorporating the latest kind of musicsuch a pop and rock among others to create diversity-based strategicpositioning, which allows the orchestra to offer assorted symphonyperformances having subset products (Soongswang,2014).Upon producing such concerts, they will create performance expensesattached to concert production, administration, personnel, andmarketing, which will ultimately bring forth increased performancerevenues.
Toattract other patrons, Ewers should enlighten them on her plansregarding reducing expenses via streamlining efforts and reducingduplication. Symphony combination with Opera would reduce redundantwork and combine the fundraising determinations of the twoorganizations. They would have then eliminated the competitionbetween them and work under a unified administration. With thereduced rivalry, the merged organization can maximize on thevolunteered resources to implement fund-raising activities. Thecompany’s leadership can also foster a higher engagement level withcommunity supporters and fans through philanthropy, membership, andattendance deepening their community relations.
Withthe proposed merger, both Opera and Symphony members will faceseveral difficulties in adapting to the change of a mergedorganization. To overcome this, they must follow the followingrecommendations:
Before going ahead with the merger, the company should carry out an in-depth analysis of their similarities and differences. Soongswang (2014) claims this will give them insights on what they are dealing with. After this, they can come up with proper negotiating terms that benefit the company.
The newly merged company must strive to create an organizational structure that works across the members by having numerous amounts of meetings and asking for suggestions on how best the company can operate (Tannen, 2000).
It should strive to work on their communication skills so that they can prepare all employees of the company psychologically concerning any changes. In agreement with Soongswang (2014), proper communication would result in sufficient coordination and overall success.
They should employ efficient and regular employee programs to allow their company members to learn how to work together and adapt to the change (Chatman & Cha, 2003).
The merged company should aim to utilize latest technologies such as the internet to facilitate faster communication between its members (Soongswang, 2014). through this, they can also manage to reduce operational costs and create a cohesive team.
Itis true that mergers can either work or fail, but its success doesnot lie on the differences or similarities of the involved companies.The accomplishments are attributed to the organization’swillingness to adapt to change and see the process as advantageous totheir company both financially and in operations. The merger betweenUtah Symphony and Utah Opera is indeed rare but with the necessaryconsiderations, it may be a success and serve as an example for othernon-profit organizations.
Chatman,J.A., & Cha, E.S. (2003). Leading by Leveraging Culture.CarliforniaReview Management,45(4), pp. 20-34
Delong,T.J., & Ager, D.L. (2005). Utah Symphony and Utah Opera: AMerger. HarvardBusiness School,pp. 1-16
Pfeffer,J. (2005). Putting People First. StanfordSocial Innovation Review,pp. 27-33
Session5, ppt. Designing Organizational Structure. Managing Public ServiceOrganizations
Soongswang,A. (2014). The Long-Term Success of Mergers and Acquisitions. IUPJournal Of Business Strategy,11(4),42-59
Tannen,D. (2000). The Power of Talk: Who Gets Heard and Why. HarvardBusinees Review,pp. 138-148
Week7, ppt. Communicating Effectively. Managing Public ServiceOrganizations
Week8, ppt. Organizational Culture. Managing Public ServiceOrganizations.