KENYA METHODIST UNIVERSITY

SCHOOL OF BUSINESS NAIROBI CAMPUS ODEL ASSIGNMENT January- April 2014 Trimester BUSS 326 ORGANISATIONAL BEHAVIOUR

ANSWER ALL QUAESTIONS:

A lot of mergers lead to cultural clashes and hence a failure. In 2005, when HBC bank announced its acquisition of MMB bank, many thought that this merger would later lead to a heap of cultural differences. MMBs culture was characterized by a laissez faire attitude. Their corporate headquarters could be explained as lavish and employees throughout the company enjoyed high salaries generous perks from the private golf course at its headquarters to its fleet of corporate jets and private yachts. HBC, in contrast grew by thrift, was a low cost, no-nonsense operation. Unlike MMB it believed that size and smarts were more vital than speed. In short, the two cultures were very different.Though these cultural differences seemed a formula for disaster, by judging from the reactions of HBC and MMB employees it appeared that the merger was successful. HBC had the forethought to know which MMB practices need to be changed and which to keep in place. HBCs appreciation of MMBs culture was critical. In order to manage the cultural transition, executives of both companies started to compare thousands of practices covering all aspects from hiring to call centre operations. In many cases HBC decided to keep MMBs cultural practices in place and in other cases HSBC imposed its will on MMB. As an example, as MMBs pay rates were above industry averages many MMB managers were forced to take a steep pay cut. Due to this some employees had left but many didremain. There were instances of co-adoption of culture. For example, MMBs dress code was more formal than HBCs business casual approach. After the merger, a hybrid code was adopted where business attire was expected in corporate offices and in front of clients, but business casual was the norm otherwise. Though many believed the merger had been successful there were tensions. Some HBC managers saw MMB managers as arrogant and autocratic, and some MMB managers saw HBC managers as bureaucratic. Most of the MMB perks were dissolved including the corporate jet, the golf course and the art collection. QUESTIONS 1. Explain the ways in which the cultures of HBC and MMB were incompatible. [10 marks] 2. Why do you feel their cultures appeared to mesh rather than to conflict? [6 marks] 3. Discuss the political behaviour that was experienced during and after the merger. [8 marks] 4. Discuss the conflict management approaches that were used to address the conflicts experienced during the merger. [8 marks] 5. Highlight the good change management practices used by HBC using examples from the case study. [ 8 marks]