187
See also: The Greiner curve 58–61 ■ Organizing teams and talent 80–85 ■
Organizational culture 104–09 ■ Protect the core business 170–71
Working With a viSion
problems might be discovered after
the deal is done because of the
limitations on sharing commercially
sensitive information prior to
common ownership. The focus at
the time of the deal is often on the
event of joining together rather than
planning what will happen next.
effective integration requires quick,
courageous decision making so that
time and momentum are not lost.
However, the most common
reason for failure is that the two
organizations have different
approaches and lack synergy.
In 1998, German car producer
Daimler-Benz bought us
automotive business Chrysler for
$38 billion. The logic seemed
obvious: create a trans-Atlantic
powerhouse that would dominate
motor markets. The new company,
DaimlerChrysler, was dubbed a
“merger of equals.” But the reality
was a classic culture clash. Daimler
was a formal, hierarchical
organization, while Chrysler favored
a more team-oriented approach.
Chrysler operated in a market
where low price and catchy design
were important; high-end Daimler
was focused on quality and luxury.
Chrysler executives felt
undermined in the new alliance
because Daimler tried to dictate
the terms on which the new
business should work and to place
its people in key positions. The
result was a costly corporate
divorce with Daimler-Benz selling
Chrysler to a private-equity firm for
a mere $7 billion in 2007. ■Harold Geneen
Harold Geneen was born in
Dorset, UK, in 1910, but his
parents emigrated soon after
his birth and he was raised
in the US. He studied
accounting at NYU (New York
University) and went on to
become a highly successful
businessman in the US. He
is best known as the father
of the conglomerate concept,
where a large corporation is
created from seemingly
unrelated businesses. In 1959
he became president and CEO
of International Telephone and
Telegraph Corporation (ITT),
and grew the company from
a medium-sized business to a
multinational conglomerate.
His 18-year tenure included
350 acquisitions and mergers
in more than 80 different
countries, including Sheraton
Hotels in the US, and
telecommunications
companies in Europe and
Brazil. Despite his success and
wealth, he was known for his
no-nonsense values and plain
talking. He died in 1997.Key works1997 The Synergy Myth
(with Brent Bowers)
1999 Synergy and Other Lies
(with Brent Bowers)Company A
makes widgets
and sells them in
the north.Company A has
a formal,
hierarchical
culture with
highly defined
roles and levels of
management.Company B
makes widgets
and sells them in
the south.Company B has
an informal,
democratic
culture where
staff forms teams
to match skills
to projects.Company A
agrees to buy
Company B. The
legal processes
are completed.New company
“AB” is formed
from two
companies with
mismatching
cultures.the new company does not deliver synergy.
takeovers disappoint.