This video is going to cover a couple of questions that you posed on the forum. The first one's by Todd which asks, it's a challenge to marry two business entities in different geographic locations. How do you integrate two culturally different companies? I thought this was a great question because actually next week we're going to talk about resource dependencies, and all kinds of mergers and joint ventures between firms. What was interesting about this question is that it made me realize and remember that a lot of mergers fail and succeed on the basis of how well. Or how compatible the two organizational cultures are that are involved in the merger. [COUGH] A great difference can exist between the two cultures and this can be come really big problem. Here's a good example in the rewrote about this is my personal experience is that the company's culture is the hardest thing to manage in a merger acquisition or take over. On the West Coast, the employees in our organization were used to life plans in the office, espresso machines in the lunch room, softdrinks in the fridge, and leaving on time on Friday afternoons. On the East Coast, even the company president had fake plans in his office, employees pay for their coffee, and leaving prior to 6 PM on a Friday was frowned upon. The east coast eventually managed to impose their physical office layout on us, but continued to view the west coast with suspicion that we were still too relaxed and having too much fun. So that's a small, a minor, it's not a dramatic cultural difference in how they process or do work, per se, but in style. But nonetheless, it shows the distinctions that can occur, at least for a lot of us in the United States who live on different coasts. So what happens though if you have this kind of distinction and they're brought together? A lot of you assume that there's going to be some kind of integration and it's going to occur over time. Now, most of you agreed that this kind of merger what's going to happen is that one culture will win, and it's usually the larger acquiring firm that tends to take over. So, Andreas and I think Lotte all kind of agreed on this that there's this kind of Uneven co-optation process across the firms. Now actually discussed two how finding a unified version of trust on those sides is kind of key, and it can kind of prevent a failed merger. And Michael talks about a third culture so you have two organizational cultures and you create a third. And he says, we do work in this realm in my organization it seems to be a matter of not only as simulating the required into the prevailing culture like a lot of the pose. But instead creating a third culture that takes into account the positive aspects of both. And he said, I think this helps with transitioning employees into a new company and helping them maintain some continuity In a very uncertain time that can involve layoffs, process changes, changing expectations and the like. What's neat about this quote and this post is that it shows that with a merger, there's an actual change in the structure that, often you find redundancies. And there's downsizing due to economies' scale. And because of this the culture is changing and one of those divisions, and it might be the purchasing company or the larger company or it might be vice verse. After all you did purchase or merge with another company because they sometimes have assets that you would like to have that you think they do better. And therefore, the merger may actually mean your division and the larger firm is cut loose. So in those cases, it's clear that having a third culture or some kind of hybrid form could be helpful, but it's not always the case that that happens. And it's not the merging company wins out. I think it actually matters and the type of merger. So if you're going to merge with a competitor you probably will have one or the other will be redundant. How would you merge with two upstream or downstream your functions maybe differentiate. So therefore it might be feasible to lead some kind of integrated culture. I can also see a divisional firm acquiring another to replace one of its underperforming groups, so when Disney purchased Pixar for example. So there's a variety of scenarios the different kinds of mergers will lead to distinct kinds of processes. But I think either way, if there are winners and losers, it can create a sense of distrust. And that's what I liked about this third culture that you're going to create a new one based on the best parts of both. It's actually something that happens in teams and even in classrooms where they talk about how the students have one culture, the teacher another. And they create a third space where they can talk about each other's positions from a different vantage point that is outside of their own. And I could see that being feasible for a merger and trying to have negotiations where you have communication about what both parties value. Having true and honest feedback and communication that helps them kind of reassure on another and come to some kind of integration that they both can live with. I think that's possible, but I also want to reiterate that the type of merger can vary too in the nature of the cultures being collided. And so, you can imagine an integrated culture meeting a differentiated one, or an ambiguous one meeting a differentiated one. And those can lead to different scenarios as well as to how the merger plays out. A good example of a differentiated culture in an organization was one that, let's see Anton. He says there's a great case from Canada where a large wireless company in the English speaking part of the country acquired a smaller French competitor on the other side of the country. And the two merged, and they downsized redundancies, but then effectively held on to differentiated cultures sustaining a sales, English office, and a French relational Kind of culture on the other coast. So by having the differentiated functions across space, and having distinct functions, it was feasible to have a differentiated structure in the merger that resulted, as opposed to one kind of being integrated or assimilated in the other. So, there's a variety of possible scenarios, I do agree with most common is to see one win out over the other. But, I do feel like there are variety of potential dynamics that are feasible and possibly more useful for a lot of out there, particularly the one's that are highly differentiated that have different functions and different placements of their sub-units. So in some ways the subcultures are stronger in many ways than the overall organizational culture. The thin film of some kind of mission that holds it loosely together. So I think that's feasible and even desirable in some cases. And it's important to look for that when you consider the variety of mergers that we're going to discuss next week. So great question.