Culture Clashes

Mergers Don’t Always Lead to Culture Clashes
Karen Maijala
CJA 473
July 28, 2010
Simeon Tyler

The individual assignment is to read the case study, Mergers Don’t Always Lead to Culture Clashes, and answer the 4 discussion questions that follow the case study. The subject of this exercise is the merging of Bank of America and credit card company MBNA and how these two companies avoided culture clashes. This paper will summarize the case study and then conclude by answering the 4 discussion questions.
Corporate culture has been defined in many ways. Geert Hofstede, a Dutch academic who studied the subject intensively, defines it as ‘the collective programming of the mind which distinguishes the members of one organization from another’. Edgar Schein, a professor at MIT’s Sloan School of Management, says it is what a corporation ‘has learned as a total social unit over the course of its history’. Many managers, more prosaically, say it is ‘the way we do things around here’. Others prefer to call it the set of values that the firm holds most dear (Hindle, n.d).

The BOA and MBNA merger seemed doomed from the beginning because of culture differences. MBNA employees were accustomed to the high life whereas BOA was a low-cost, no-nonsense corporation. MBNA corporate headquarters was described as lavish and their employees enjoyed high salaries and perks such as a private golf course, and a fleet of corporate jets and yachts (in text).
To try to manage the cultural transition, executives of both companies began by comparing thousands of practices covering everything from hiring to call-center operations. In many cases, BOA chose to keep MBNA’s cultural practices in place. In other cases, BOA did impose its will on MBNA (in text).
One difference of cultural practice was the dress code of each company. MBNA had a formal dress code, but BOA had a business casual dress code.   Both companies compromised and the outcome was the formal dress code would remain for the...