the impact of organisational culture on facilitating cross ......of globalisation. international...
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The British University in Egypt
Faculty of Business Administration, Economics
And Political Science
The Impact of Organisational Culture on Facilitating Cross-border
Acquisition: An Empirical Study on Kraft-Cadbury Acquisition in
Egypt
A dissertation submitted in part fulfilment
of the requirement for the award of B.A in
Business Administration- Human Resource Specialisation
By: Yassmin Ahmed Elemary
ID: 110959
Honours Levels
2012/2013
Under the Supervision of:
Dr. Hadia Fakhr Eldin
ii
Acknowledgments
Throughout the journey of researching, and writing this research; first; I would like to
thank Dr. Hadia Fakhr Eldin who acted as a mother; you always supported me and guided me to
achieve and complete the research. I really learned from you a lot in writing the research in
addition to your professional knowledge of culture that was very beneficial as it is the backbone
of my understanding of the concept organisational culture.
I would like to thank my family; my father and mother, who created a good environment
to me in writing my dissertation. They always supported, encouraged me to do better and achieve
my targets. Moreover; my sister Passant who always helps me in completing the research step by
step.
Also I would love to thank Dr. Maha Dejani who taught me how to think analytically; in
addition to her knowledge of OD and Leadership impacts on this research. I would like to thank
Mrs. Samar AbdelMaged as she helped me in the statistics of the questionnaire; I sincerely thank
my TAs; Mrs. Yousra Gohar, Mrs. Ola Mamdouh; Mrs. May Fahmy and Mrs. Noha Gamil who
always help and assist me when I need them even when she is busy.
I special thanks to Mrs. Sally Abououf, who I interviewed were her input make
significant in the research; in addition to her appreciation to me as a student want learn and
discover cultures.
Finally I would like to thank all my Doctors and Professors who helped me reach to this
stage as this research is a product from them.
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Abstract
Because of the agile market and globalisation; organisations tend to go for mergers and
acquisitions in order to enlarge its market shares. However; some organisations failed to consider
the culture differences of different organisations especially from different countries. Therefore;
understanding the concept of organisational culture would enhance effective acquisitions.
This research uses the CVF (Competing Value Framework) developed by Cameron and Quinn to
assess the organisation effectiveness of the organisation. In addition to know which culture type
of the CVF the acquirer and acquired firm used.CVF include four culture types as Clan, Market,
Adhocracy and Hierarchy culture. Therefore; the CVF helps to compare between cultures. In
addition to its validity ensures reliability of the outcome. Moreover; it Cameron and Quinn
established the OCAI Questionnaire that test the CVF based on its 6 dimensions (dominant
characteristics, organisational leadership, management of employees, organisation Glue,
Strategic Emphasis, and Criteria of Success)
The aim of the research to discover the impact of organisational culture on cross-border
acquisition; thus the researcher conducts a case study on Kraft and Cadbury’s acquisition in
Egypt. Purpose of this research is to find out the culture types of both firms in the CVF and to
assess the acculturation and whether the integration or the acquisition was smoothly done
through the OCAI. This research recommends the right actions that should be taken by the
organisation to facilitate the Acquisition
The methods used in the research quantitative (from the OCAI Questionnaire) and qualitative
approach (interview with the HR Business lead in Kraft/Cadbury). The researcher uses the factor
analysis to assess the correlations and discover which culture prevails; in addition to using the
CVF instrument statistics.
The findings of the research proved that there significant relationship of Kraft and Cadbury with
Market, and Adhocracy; however, the interview and the factor analysis ensure that there is
correlation with Clan culture of the CVF.
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Table of Contents
1. Chapter One: Introduction.................................................................................................. 1-6
1.1.Research Topic........................................................................................................... 2-4
1.2.Research Subject ............................................................................................................4
1.3.Research Methods ...................................................................................................... 4-5
1.4.Dissertation Structure ................................................................................................. 5-6
2. Chapter Two: Literature Review ..................................................................................... 8-18
2.1. Organisational Culture ........................................................................................................8
2.1.1.Schein’s 3 levels of Culture .................................................................................... 8-9
2.1.2.A.Competing Value framework(CVF) ................................................................. 9-11
2.1.2.B.Organisational Culture Assessment Instruments (OCAI) .............................. 11-13
2.1.3.Hofstede ...................................................................................................................14
2.2. The importance and criticism of the CVF/OCAI ........................................................ 14-15
2.3. What is Acquisition and Effective Acquisition Components ..................................... 15-17
Organisational Fit ..................................................................................................................16
Cross-Culture Management ..................................................................................................16
Modes of Acculturation ................................................................................................. 16-17
2.4. The Effect of Culture on effective acquisition ............................................................ 17-18
2.5. Conclusion and Recommendations ...................................................................................18
3. Chapter Three: Methodology .......................................................................................... 20-31
- Research Objectives, aims and Questions .................................................................. 20-21
- Research Hypothesis .................................................................................................... 21-22
- Research Framework ........................................................................................................ 23
3.1.Kraft/Cadbury Case study ............................................................................................... 24
3.2.The Research Approach .................................................................................................. 25
3.3.The Research Philosophy ............................................................................................ 25-26
3.4.The Research Sampling .................................................................................................... 26
3.5.Technique .................................................................................................................... 27-29
3.6.The use of OCAI Questionnaire ................................................................................. 29-30
3.7.Assessing the culture in Kraft &Cadbury Acquisition ..................................................... 30
To Conclude ............................................................................................................................... 30
4. Chapter Four: Findings and Analysis ............................................................................ 32-58
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4.1.Interview Analysis ................................................................................................. 32-38
4.1.1.Actions taken for cross-culture management .............................................. 34-38
A. Role of Leadership & OD Practitioner ......................................................35
B. Teambuilding Workshops ..........................................................................36
C. Establishment Town Halls meetings ..........................................................37
D. Hybrid Appraisals, Rewards, & Structure ................................................37
4.2.Type of Acquisition ....................................................................................................38
4.3. Acquisition Strategy.............................................................................................. 38-39
4.4. Merger Emotion Syndrome Model ............................................................................39
4.5. Applying Edgard Schein 3 levels of culture on Mondelēz culture ...........................40
4.6. Questionnaire statistics ......................................................................................... 40-56
4.7. Relating Hostede on Kraft, Cadbury and the Egyptian context .................................57
5. Chapter Five: Conclusion ............................................................................................... 60-64
5.1.Summary of the Findings ...................................................................................... 60-62
5.2.Limitation of the research ..................................................................................... 62-63
5.3.Research Recommendations .......................................................................................63
5.4. Practical Implication: CVF need to be revised ...........................................................63
5.5. Recommendations for Further readings .....................................................................64
6. Bibliography ....................................................................................................................... 65-69
7. Appendix ............................................................................................................................. 70-80
6.1.Factor Analysis and Correlations tables of Chapter 4 .......................................... 70-77
6.2.OCAI Questionnaire ............................................................................................. 78-79
6.3.Interview Questions ....................................................................................................80
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Chapter One: Introduction
1
1
Chapter One: Introduction
Many organisations have failed during the acquisition process because of their different
organisational culture as they failed to work together under one roof (Browaeys & Price, 2008, p.
176). Many scholars described how organisations in joint ventures work synergistically together
under one roof as the “marriage” (Holland & Salama, 2010). A successful civil marriage when
husband and wife have things in common or they have the willingness to understand each other
very well to discover their commonalities or create new one. Therefore, the literature used the
term marriage as a metaphor for organisational merger and acquisition. “Organisational
marriage” is the synergistic integration between two firms where there is compatibility between
these firms in management practice, employees’ behaviour, and others as a result a culture fit
occurs (Cartwright & Cooper, 1993). Or the two firms have the willingness to collaborate and to
create a common culture and language despite their differences; this could lead to the creation of
hybrid from both cultures that will reduce the probability for both organisational cultures to
divorce.
Scholars have classified marriage by two types; traditional and modern marriage. First;
traditional marriage; any differences between both firms is considered destructive; therefore,
the strong firm tend to impose its culture on the weaker firm, and this describes a Win/Lose
solutions. Second; the modern marriage; the two parties accept their differences as it is “added
value” for the acquisition; therefore, they seek to Win/Win solutions (Cartwright & Cooper,
1993, p. 64). Accordingly; it is important to understand the organisational culture of the
acquired and acquirer firms in order to have effective acquisition
1
2
This research aims to determine the impact and congruence of organisational culture by
using the Competing Value Framework (CVF) and its effect on the OCAI dimensions as;
dominant characteristics, organisational leadership, management of employees, organisation
Glue, Strategic Emphasis, and Criteria of Success on facilitating effective cross-border
Acquisition in Cadbury-Kraft acquisition in Egypt. Purpose of this research is to find out the
culture types of both firms in the CVF and to assess the acculturation and whether the integration
or the acquisition was smoothly done through the OCAI. This research recommends the right
actions that should be taken by the organisation to facilitate the Acquisition
1.1. Research Topic:
In order to understand the concept of organisational culture; we must understand the
concept of culture. Scholars clarified that culture does not has a clear cut definition; however it
has several of definitions as Hofstede identified culture as “the collective programming of the
mind” which differ people from each other (Hofstede, 2007, p. 413). Similarly; the definition of
organisational culture is extracted from the concept of culture which is similar values, norms and
beliefs of the employees within the organisation (Sun, 2008).
Several models of culture were developed by Scholars in order to assess the
organisational culture. This research applies the Competing Value Framework (CVF) model
developed by Cameron and Quinn in 1999 on two firms undergoes acquisition. The CVF model
assesses the organisational effectiveness. The CVF is divided into two contradictory dimensions
internal/external, and stability/flexibility. The two dimensions are divided into four archetypes
which are; Clan culture (open, friendly workplace and internal), Adhocracy culture
(innovative, external, and flexible), Market Culture (external, competitive, achievement and
3
stable), and Hierarchy culture (internal, stability, rules, and procedures). The four culture types
are present in all organisations but in degrees (Rai, 2011). The research also shed lights on
Hostede dimensions and the 3 levels of Edgard Schein.
Additionally, Cameron and Quinn developed the organisational Culture Assessment
Instrument (OCAI) that is based on the CVF and also developed the OCAI questionnaire by its
six dimensions which are dominant characteristics, Organisational Leadership, the management
of employees, organisational glue, strategic emphasis and criteria for success; the OCAI offers
quantitative tools that could identify the type of the culture of the organisations (Pushnykh &
Chemeris, 2006, p. 168). If an organisation is Clan thus the six dimensions will be open and
friendly style; for example organisational leadership will be friendly and open thus will facilitate
the communication flow within the workflow.
The CVF is considered important framework as it is used widely in literature and is
applied on different countries; therefore, it proves validity and consistency (Lamond, 2003).
Moreover the CVF allows us not just to know the organisational culture but also to compare
organisational cultures with each others.
Since the researcher assesses the effect of organisation culture on cross border
Acquisition which is acquiring two entities from different cultures. Scholars clarified that
acquisition has advantages and disadvantages. First the advantages are; to grow, gain competitive
edge, and increase the market share (Vasilaki & O'Regan, 2008). The disadvantage is employee
turnover as they are stressed from losing their positions and may have the culture shock (Weber,
Shenkar, & Raveh, 1996).
4
According to the literature; in order to have effective acquisition, both firms must have
organisation fit (the congruence in the management style between two firms) , cross culture
management (different ways in amalgamating culture) (Datta, 1991) (Zhu & Huang, 2007) and
according to Berry there are different strategies or modes of acculturation firms adopt during
acquisition either they separate from each other, integrate and acculturate, or assimilate (adapt
the acquirer’s culture) or deculturate (the acquirer firm impose its own culture on the acquired
firm) as cited in (Nahavandi & Malekzadeh, 1988, pp. 82-83).
1.2. Research Subject:
Cross border acquisitions have been discussed widely in the last 10 years due to the emergence
of globalisation. International Companies tend to be involved in global alliances like mergers
and acquisitions in an attempt to increase profits and achieve higher management effectiveness.
Therefore; the researcher conducts case study on Kraft/Cadbury acquisition in the Fast Moving
Consumer Good (FMCG) industry that took place in 2010 in Egypt in order to assess the culture
differences and how they acculturate. Kraft (US Nationality) is the acquirer firm that it targets
Cadbury to enlarge its portfolio and the market share; therefore, Cadbury is the acquired firm
which is a UK nationality.
1.3. Research methods:
The researcher adopts the deductive approach which is developing existing theories
as the CVF and not adopting the inductive where scholars create their own theories (Ali &
Birley, 1998). The research is based on secondary and primary research; the secondary data are
the theories and information acquired from the internet, books and articles. Second the primary
research, which conducting semi-structured and open ended interview to let the interviewee talk
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freely and that describe qualitative data as well as conducting the OCAI Questionnaire developed
by Cameron and Quinn as to assure the validity and reliability and that describe quantitative data.
The research philosophies are Positivism; Ontology (include objectivity of the
theories and subjectivity of the interview and questionnaires); and Interpretivism (allow the
researcher to interpret the interviewee and answers of the questionnaires) (Saunders, Lewis, &
Thornhill, 2012). In addition to the research sampling; the population of Kraft/Cadbury is around
200; thus the sample size will be based on the non-probability (random) sampling as it will not
consume time in distributing the questionnaire to the employees; like the haphazard (volunteer)
samplings (Saunders, Lewis, & Thornhill, 2012).
1.4. Dissertation Structure
Chapter 1: Introduction:
This chapter introduces the topic and the subject of the dissertation. First; it introduces the idea
of organisational culture in firms and the CVF which is different culture the organisation adopts.
Second it introduces the effect of organisational culture on effective acquisition or marriage.
Thereafter; this chapter introduces summary for the methodology.
Chapter 2: Literature Review
This chapter reviews the literature review. As the research about the concept of the organisation
culture, and analysing the CVF theory; as well as explaining how the organisation culture create
effective acquisition. This chapter is considered as a massiveness of knowledge where the
findings of the research are built on it. As well as highlighting on some recommendations.
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Chapter 3: Aims and Methodology
This chapter outlines the aims, objectives and methods used in this research as primary and
secondary data. This chapter introduces the intended company that research study on; in addition
to clarifying the research sampling and philosophy.
Chapter 4: Findings
This chapter interprets and analyse the data findings from the interview and OCAI
Questionnaire. As well as comparing that data by the literature to ensure whether the research
hypothesis is true or null. This chapter highlights on issues that needs further research
Chapter 5: Conclusion
The last chapter summaries the data findings and concluding the results of the research, as by
highlighting the culture of the acquired and acquirer firm that lead to effective acquisition. As
well as it discusses the limitation of the research, recommendations and further readings.
7
Chapter Two: Literature Review
2
8
Chapter Two: Literature Review:
2.1. Organisational Culture
To begin with; culture is the shared values, beliefs and attitude; as Hofstede clarified that culture is “the
collective programming of the mind” that it differs from one group of people to another (Hofstede, 2007, p. 413).
Furthermore; culture is embedded in organisations that shapes organisation’s members actions and behaviours;
according to Deshpande and Webster organisational culture is “the pattern of shared values and beliefs that help
members of an organisation understand why things happen and thus teach them the behavioural norms in the
organisation” (Deshpande & E.Webster, 1989, p. 4). Accordingly, culture broadly defines the personality of the
organisation.
2.1.1. Schein’s three levels of the Organisational Culture
Schein identified that there are three levels of culture when analysing organisations as
shown in figure 1 below. First Artefact and behaviour which is like the surface of the sea
where one can observe the organisation’s dress code (level of formality), language; the second
level is the values and beliefs of the organisation, this level is inside the sea where no one could
easily know the organisation’s values and beliefs unless she/he interacted with the organisation
as by having interview and survey so one could learn the philosophies of the organisation
(Schein, 1990). The final level is Assumptions which is the deep level of the sea as it is like a
“treasure” that cannot be changed, by asking more in-depth questions and by direct observation
one could answer the behind reasons of why employees dress like that? Or why employees
behave like that? (Browaeys & Price, 2008).
2
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2. 1.2. Competing Value Framework (CVF) and the effects on OCAI:
A) The Competing Value Framework (CVF)
According to the work of Cameron and Quinn in their book “Diagnosing and Changing
Organisational Culture” they introduce the CVF. It describes the current state of culture in the
organisation and provides ways to help people purse change in organisations as well as the CVF
assesses the effectiveness of the organisation. The CVF has two broad dimensions; first the
internal/external, second is the stability/flexibility therefore it seems to have “paradoxical
values” (Gray & Densten, n.d, pp. 595-598). Supporting Cameron and Quinn claims; Rai
identified that these two dimensions are broken down into four distinct culture types in the
framework where they are Clan, Adhocracy, Hierarchy and Market as in Figure 2 below.
Cameron and Quinn distinguished between; First the Clan culture where it lays between
internal and flexibility, this culture type focus on friendliness workplace, “parent figures leader”,
Figure 2:1
10
participation as well as concern for employees development therefore, it is a human relation
perspective; the Adhocracy culture which lays between external and flexibility where people
are risk takers, and innovative, this type goal is to be the leading edge in knowledge and
acquiring new resources thus it is organic structure, as well as people are ready to change
therefore organisations will be described as open system perspectives (Gray & Densten, n.d)
(Panayotopoulou, Bourantas, & Papalexandris, 2003).
On the other hand; according to Gray and Denesten the other opposing dimensions are
the Hierarchy and Market culture. Hierarchy culture is internal and stability focuses. It is
characterised by centralisation structure where employees are bounded by rule, regulations and
procedures therefore there is no rooms for innovation so its perspective is internal process; last
but not least the fourth type is Market culture, its focus is external and stability, this type values
goal accomplishments and competitiveness therefore it is goal oriented with rational goals
perspective (Gray & Densten, n.d). In addition to Gray and Denesten; Helfrich, Li, Mohr,
Meterko, & Sales declare that any organisation may have all the four cultures but in degrees
(Helfrich, Li, Mohr, Meterko, & Sales, 2007).
Other perspective of the CVF quadrants; Rai identified that each quadrant may represent
the nature of the organisation as Nike is an agile market where it has to be in Clan quadrant
while Coca-Cola in a steady market so it could fit with Market Culture (Rai, 2011), thus the
nature of the organisation contributes to the organisation culture. Moreover there are artefacts
that indicate whether the organisation is Clan or Hierarchy by the way they dress (Formality) and
the structure of the office (working in team or not) and the way they talk in friendly way or
formal one.
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Furthermore; the literature emphasises three additional dimensions of culture; culture
strength (the domination of the culture), cultural congruence (the fit with other organisational
cultures), cultural type (a specific type of culture that represent the organisation) (Cameron K. ,
2004).
Rai criticised the CVF model for not including ethics. He modified the CVF and added
another dimension which is “ethics and trusted culture” as he believed that it is important (Rai,
2011, pp. 787-789). Therefore ethics as a third dimension is added in figure 3.
B) Organisational Culture Assessment Instrument (OCAI) Components:
Cameron and Quinn developed the organisational Culture Assessment Instrument
(OCAI) that is based on the CVF in 1999; the OCAI consists of six dimensions which are
dominant characteristics, Organisational Leadership, the management of employees,
Figure 2:2
12
organisational glue, strategic emphasis and criteria for success; each dimension complements the
culture types of the CVF (Ramachandran, Chong, & Ismail, 2011); additionally, Cameron and
Quinn developed a questionnaire that is extracted from OCAI components that it offers
quantitative tools that could identify the type of the culture of the organisations (Pushnykh &
Chemeris, 2006, p. 168) .
The first dimension of the OCAI is dominant characteristics; which is the dominant
values and organisational culture that the organisation has; for example; an organisation is a clan
culture therefore it will have the dominant characteristics of flexibility and team work (Cameron
K. , 2004) while if the dominant culture is “Market &Adhocracy” therefore the dominant
characteristics are “goal oriented” (Pushnykh & Chemeris, 2006, p. 180).
Second dimension; Organisational Leadership as Quinn (1984) emphasised that there is
a fit between leader style and the culture type of the organisation; if a leader is coordinator it will
harmonise with the Hierarchy Culture as cited in (Cameron & Freeman, 1991). Therefore; as
Zaheer, Rehman, and Ahmad added that there is huge congruence between leadership style and
the type of culture (Zaheer, Rehman, & Ahmad, 2006).
The third dimension; management of employees which is the different treatment and
direction of employees in respect with the different type of culture the organisation has
(Cameron K. , 2004).
The fourth dimension; the organisational glue where “Schein (1985) identified Bonding
or coupling mechanisms refer to the set of shared, underling values and understandings that
characterise the organisation and act as Glue for members” as cited in (Cameron & Freeman,
1991, p. 28) In addition bonding or Commitment occurs in Hierarchy culture as rules.
13
Contradicting with Bonding of Clan culture is teamwork and informality (Cameron & Freeman,
1991). Needless to say, organisation glue reflects that what organisation behave is what
employee behave (Lanier, 2012)
The fifth dimension strategic emphasis “define what areas of emphasis drive the
organisation’s strategy” based on the type of the culture; if it is Adhocracy therefore the
emphasis is innovations (Cameron K. , 2004, p. 6). The final dimension is the criteria for
success which is the organisational effectiveness that value efficiency in a Hierarchy culture
while in market culture value competition (Cameron & Quinn, 2011). In other word; the
organisation view success according to the organisational culture type.
Finally if all of these dimensions or attributes fall in the same quadrant in the CVF as in
Clan; therefore, this is verification that the organisation has culture congruence (Cameron &
Freeman, 1991) however practically it is very hard that all dimensions fall in the same quadrant
because some departments in organisation has to be steady as for example in a Hierarchy culture
not Clan as accounting and finance department. Therefore, the six dimensions act as indicators
of the cultural type of the organisation represented in figure 4.
Figure 2:3
14
2.1.3. Hofstede:
Geert Hofstede established cultural research on national cultures. He developed a model
of five dimensions which are Power Distance, Individualism versus Collectivism, Masculinity
verses Femininity, Uncertainty avoidance, and Long-term orientation. Despite many scholars
criticised Hofstede’s research because it was bounded by one company (IBM), his work as is
requisite (Browaeys & Price, 2008).
National culture has a great impact on international joint ventures and acquisitions as
each organisation originate from a different national culture (Park & Ungson, 1997)(Lindholm,
2000).
2.2. The importance and criticism of the CVF
Because of the consistency of the empirical studies conducted on the CVF, many
researchers agree that the CVF was heavily and successfully used on the Asian countries. Not
only the CVF explains the explicit and implicit culture of any organisation but also differentiates
and compares organisations by their culture types. The CVF is used in the literature by many
Scholars on different cultures (Lamond, 2003); therefore these studies assured the validity and
reliability of the CVF/OCAI, Yu and Wu added that “The CVF can also be used as a conceptual
model to do some qualitative research to explore the reason and process of organisational
culture change” (Yu & Wu, 2009, p. 40).
Denison and Mishra criticised the CVF as “employee involvement activities can lapse
into insularity and have a limited, or even negative impact on effectiveness” as cited in (Yu &
Wu, 2009, p. 37). In other words, If organisation is rigid, focusing on stability and control
(Internal environment) and neglecting the innovation and creativity to adapt with the external
15
environment. Therefore Cameron and Quinn did not clarify that the organisations have to have
overlaps in the culture types of the CVF but in degrees. Consequently; Denison and Spreitzer
(1991) solved this problem by identifying that the role of the manager is to guide the
organisation and its employees in order not to highly focus on flexibility on the expense of the
other types of cultures because the extreme focus on flexibility will result to a chaotic
organisation as cited in(Ramachandran, Chong, & Ismail, 2011). Another way around this would
be to consider the PESTEL which is the external environment.
2.3 . Acquisition and effective acquisition
Acquisition is the act of acquiring another entity. In other words an organisation buys
another company and by that the purchaser company assumes that it will have all the control
(Borys & Jemison, 1989). In other words acquisition is “a hybrid of two independent firms”
(Park & Ungson, 1997, p. 285). The term Acquisition has different meanings; as it could be
referred as “recourse Acquisition” or knowledge acquisition and organisations Acquisition
which is “acquiring another organisation” (Lyles & Salk, 1996, p. 878). Furthermore, there are
two types of acquisitions which are domestic M&A and cross-border M&A; domestic M&A
done inside the boundaries of the country while cross-border M&A which “involve two
companies from two different countries”(Zhang, 2010, p. 10) .
In fact lots of companies follow acquisition to gain competitive edge and to increase its
market share in addition to gaining lots of resources (Vasilaki & O'Regan, 2008). In contrast of
the above, not always acquisition makes good changes in the organisation, conflict rises due to
the integration (Cohen, Birkin, Cohen, Garfield, & Webb, 2006). According to Krug’s research
that measures the turnover of top manager in post-acquisition that “firms lose around 32 percent
of its top management team” as this shows that acquisition in some cases cause stress, and loss of
16
status (Krug, 2009, p. 4) . In the literature, scholars agree that to have effective or compatible
acquisition (Datta, 1991) (Vasilaki & O'Regan, 2008)will not be achieved unless both firms
must have organisation fit, cross culture management and a strategy of acquisition to
achieve acculturation (Datta, 1991) (Zhu & Huang, 2007) (Nahavandi & Malekzadeh, 1988,
pp. 82-83).
Moreover; companies when pursing acquisition; they tend to adopt a certain strategy or
strategies. According to Berry’s Model of acquisition strategies or (Modes of Acculturation)
which are Integration (where the two firms integrate their assumptions and beliefs), Assimilation
(where the acquired firm tend to resign its culture and adapt the acquirer one), Separation (where
each firm adapt its own culture and refuse to adapt to the other) and Deculaturation (is the
disintegration which is the worst strategy) as cited in (Nahavandi & Malekzadeh, 1988, pp. 82-
83) .
In order to have effective acquisition; the acquired and acquiring firm must have
organisation fit that firms have to be incorporated after the acquisitions, according to Datta the
organisations’ management style and reward system; in other words organisation fit will keep the
firms from culture ambiguity if the two firms have different management style (Datta, 1991).
Furthermore, in order to manage the cross border acquisition effectively; Haung and Zhu
declared the importance of having Cross-Cultural management that will facilitate both
organisational cultures to synergistically meld together as to avoid culture conflicts; therefore,
this amalgamation will form a new culture. Haung and Zhu propose four models for Cross-
Cultural management to form effective culture integration as; localisation (acquirer firm
respect and localise the acquired culture instead of imposing), transplanting the culture of the
17
acquirer firm, culture innovation (amalgamating both cultures), evasion tactics is the worst
option where the culture gap occurs between the two firms and in need to third party to bridge
the gap (Zhu & Huang, 2007).
Furthermore; literature has proved that emotions interfere during and after acquisitions.
Therefore; Hunsaker and Coombs (1988, 60) introduced stages of “Merger-emotions syndrome
Model”; the stages start from denial (which is refusing the acquisition) until enjoyment (where
both firms enjoy their integration and hybridity of each others) as cited in (Pikula, n.d., p. 7).
2.4. The effect of culture on effective acquisition:
Does organisational cultural affect acquisitions? Or do the acquisitions shape the
organisational culture of both firms? Scholars stressed the effects of organisational culture on
Figure 2:4
18
Acquisition. “Culture is a crucial issue for employees in merger and acquisition; there are two
cases the purchaser employees and the acquired employees. The existing employees who make
the purchase assume that new employees will integrate the existing culture. However; the new
employee will assume that their old culture will be integrated into the buying company’s culture;
according to the literature in most cases the buying company control the cultural and the
workplace environment” (Shook & Roth, 2011, p. 144) at this point the literature answers the
first questions mentioned above were the organisation culture affect impacts the acquisition .
Therefore; this research will discover if the acquirer shape the culture of the acquired firm and is
the acquirer has dominant culture where its ethnocentricity impose its culture type to the whole
organisation (Gertsen, Derberg, & Torp, 1998). As a result; the amalgamation of both
organisational members’ cultures would boost the acculturation of the acquisition According to
the literature the acquirer firm impose its own culture on the other firm (Shook & Roth, 2011);
however in some cases the national culture may prevail (Lindholm, 2000) .
2.5. Conclusion and recommendations
The CVF was heavily used by many scholars who applied it on different organisations
worldwide to identify the organisations effectiveness. The CVF proved to be valid and reliable
instrument; however to overcome Rai’s criticism of the CVF discussed above, the Ethics can be
added as third in order to detect whether the acquirer firm was ethical in the acquisition process
or not, does it consider the wellbeing of the members of the organisation? Does it create good
congruence with the acquired organisation’s culture or adopts the ethnocentric view? Moreover,
the CVF and the OCAI can address the culture of the organisations that undergo changes as
acquisition, as it can be used to assess and describe the culture before and after the acquisition.
19
Chapter Three: Methodology
3
20
Chapter Three: Methodology:
Research Objectives:
1- To examine the effect of the type of Organisational leaders on encouraging effective
acquisition.
2- To determine the types of employee management of both firms that fosters the
acquisition.
3- To assess the congruence of the organisation glue between firms on achieving
compatible acquisition
4- To identify the dominant characteristics of both firms that foster or hinder the
acculturation of effective acquisition
5- To describe the firms criteria of success that enhance acquisition
6- To measure the fit of the strategic emphasis of both firms on having smooth acquisition
7- To explore the reasons and components acquisition takes place and its effects.
8- To assess the relationship of organisational culture that affects acquisition.
9- To recommend the right actions taken by the organisation to facilitate the acquisition and
decrease the resistance to change.
Research Aim and Questions:
This research aims to determine the impact and congruence of organisational culture by
using the Competing Value Framework (CVF) and its effect on the OCAI dimensions as;
dominant characteristics, organisational leadership, management of employees, organisation
Glue, Strategic Emphasis, and Criteria of Success on facilitating effective cross-border
Research Aim and Hypothesis; Research objectives and questions
3
21
acquisition in Cadbury-Kraft acquisition in Egypt. Purpose of this research is to find out the
culture types of both firms in the CVF and to assess the acculturation and assess whether the
integration or the acquisition was smoothly done through the OCAI. This research recommends
the right actions that should be taken by the organisation to facilitate the Acquisition.
Research questions are;
- To what extent does the organisational culture impact the acquisition?
- To what extent does the acquisitions/integration impact the culture of Kraft and
Cadbury?
- Are organisations effective with congruent culture or incongruent cultures?
- Did the cross-border acquisition enhance the acculturation and fit between firms?
Research Hypothesis (H1):
H1: There is a significant relationship between organisational leadership and the effectiveness of
the acquisition.
H0: There is no significant relationship between organisational leadership and the effectiveness
of the acquisition.
H2: The compatibility of employee management of the OCAI will lead to a significant impact on
effective acquisition
H0: There is no compatibility of employee management of the OCAI will lead to a significant
impact on effective acquisition
H3: There is a relationship between organisational glue and the effectiveness of the acquisition.
22
H0: There is no relationship between organisational glue and the effectiveness of the acquisition.
H4: The congruence of the criteria of success is a dimension in OCAI in facilitating effective
acquisition.
H0: The dissimilarity of the criteria of success is a dimension in OCAI in facilitating effective
acquisition.
H5: There is a significant relationship between culture strategic emphasis and effective
acquisition.
H0: There is no significant relationship between culture strategic emphasis and effective
acquisition.
H6: The compatibility in the culture’s dominant characteristic facilitates effective acquisition.
H0: The incompatibility in the culture’s dominant characteristic is a barrier for effective
acquisition.
23
Research Framework
Effective Acquisition
Dependent Variables (Effect) Independent Variables (Causes)
Organisational Culture
(CVF)
Organisation Fit
Management of Employee
Dominant Characteristics
Organisational Leadership
Organisation Glue
Strategic Emphasis
Criteria of Success
Modes of Acculturation
Cross-Culture
Management
Figure 3:1
24
3.1. Kraft/Cadbury Acquisition Case Study:
In the last three years, the acquisition between Kraft and Cadbury took place in the fast-
moving consumer goods industry (FMCG). Kraft Foods is a United States company, it was in the
market for 110 years. Kraft is the largest organisation of candies and beverage and its portfolio
after acquisitions are “Kraft, Jacobs, Maxwell House, Cadbury, Trident, Nabisco, Oreo,
Philadelphia and Osca Mayer” according to (Drive, 2008) as cited in (George, Onokala,
Dawodu, & Olayemi, 2012, p. 113) therefore Kraft calls its portfolio unrivalled portfolio; in
addition to that Kraft has an annual sales of 18$billion (kraft foods group, n.d.). Kraft entered
Egypt around year 1999 (AbdelRazek, 2008). On the other hand, Cadbury Company is UK
nationality, it has established in year 1879 and it has been established in Egypt it in 1992.
Cadbury is a chocolate based company; its products are Cadbury Dairy Milk Flake, crunchy and
others (cadbury Products, n.d.).
Fortunately, Kraft and Cadbury acquisition took place on February 2010 after long
concessions and agreements (George, Onokala, Dawodu, & Olayemi, 2012, p. 113). According
to the interview held on BBC with Kraft foods CEO; the reasons that Kraft bought Cadbury is to
enlarge its portfolio, increases market share, expand to new markets (Riley, 2010). On the other
hand “some researchers stated that Kraft's merger with Cadbury is a 'bumpy but upward road'”
(Sadiq, 2010). Furthermore; in order not to let the world call kraft as “Kraft/Cadbury”, thus they
name it “Mondelēz International” where Monde means world and delēz means delicious (Panel
& Euromonitor, 2010), accordingly it shows that Mondelēz is the umbrella that it includes Kraft,
Cadbury and others. Therefore, this study intends to assess how the two cultures aligned
together and to identify the cultural differences that took place during the acquisition and how
they overcome; furthermore assessing the culture shift of both organisations during acquisition.
25
3.2. Research Approach:
The intended participant of this research is Kraft-Cadbury’s managers and employees in
Egypt, Cairo. The researcher will access the human resource department of Kraft that will help in
understanding how the purchaser company dealt with the acquisition. The researcher will adopt
the deductive approach that will be applied on the established theories done by scholars on the
case study of Kraft/Cadbury’s acquisition as the CVF and OCAI done by Cameron and Quinn in
addition to Hofstede dimensions, this approach is different from inductive approach where the
person develop his/her own theory (Ali & Birley, 1998) .Therefore the researcher prefer the
deductive than inductive as she agrees with Bryman (1995) that deductive approach provides
guideline and support the researcher understandings as cited in (Dubois & Gadde, 2002). This
research is based on secondary and primary data in order to assure the reliability and validity of
the information coming from the employees and the manager.
3.3. The research Philosophy:
The research philosophies are Positivism; Ontology; and Interpretivism. First;
Positivism philosophy where “researcher use data and existing theories and develop it
according to the hypothesis of the research” (Saunders, Lewis, & Thornhill, 2012, p. 134) and
that will support the deductive approach of the research in other words; the researcher will use
the CVF which is an existing theory, and then develop this theory based on the study that will be
applied for. Then; Ontology philosophy that the research will include both the objectivism and
subjectivism, where objectivism focus on the theories of the research such as the CVF and OCAI
dimensions that states the different types of organisational culture, while subjectivism is the
analysis of the employees’ answers that the researcher will base the research according to the
26
interviewee and the questionnaire so it will be subjective. The third philosophy Interpretivism
which reflects the qualitative approach that open rooms for interpretations through explanatory
research on understanding the culture of Kraft and Cadbury which will allow the researcher to
interpret and modify her understandings of the acculturation of both organisational cultures
(Saunders, Lewis, & Thornhill, 2012).
3.4. The research Sampling:
The population of the organisation is around 200 employees and managers; therefore, the
sample size will be 132 employees and managers at 5% margin of error (Saunders, Lewis, &
Thornhill, 2012, p. 266). The researcher uses the non-probability sampling because it is less time
consuming than probability sampling. Consequently the researcher will use Purposive sampling
including Heterogeneous sampling which is getting employees from different departments that
will support the research in recognising the behaviour of different people toward the culture
change, in addition to typical case sampling which is applying the study on Kraft and Cadbury
acquisition (Tansey, 2007).
Furthermore; according to Tansey(2007) the volunteer sampling including Snowball
Sampling which is according to the willingness of the employees to volunteer to answer the
survey rather than to be chosen because in most cases employees are busy to answer the
questionnaire. The previous two kinds of samples had reasonable costs. Last; the Haphazard
sampling which is the convenience sampling that is easy to implement it and cost-saving
(Saunders, Lewis, & Thornhill, 2012).
27
3.5. The Research Technique:
To begin with secondary data, which is the information that already exist and done by
another person/organisation; therefore, the researcher will focus on this type of research by
reviewing the literature from books and academic articles. However; there is disadvantage of the
secondary data that it is costly; therefore, the university’s library is a facilitator and can access
plenty of articles for no costs (Saunders, Lewis, & Thornhill, 2012).
In addition an unobtrusive measure as the organisation chart, a secondary data documents
retrieved from the company that will support the previous methods the interview and
questionnaire (Cummings & Worley, 2008), the benefit of realising organisation chart of both
organisations in order to know whether they are more of hierarchy or not which will facilitate to
the researcher to know the culture type of Kraft and Cadbury. In the second place; the researcher
conducts primary research which is starting research from scratch by conducting qualitative and
quantitative research (Saunders, Lewis, & Thornhill, 2012).
First, the Qualitative research will be held by in-depth and personal interview with HR
manager of Kraft, this type of interview will be semi-structured and open ended interview. The
semi-structured (which consists of list of questions where the researcher can skip or modify
some; in order to give to the interviewee the choice to talk freely) and open ended interview in
order not to limit the interviewee with set of answers (Saunders, Lewis, & Thornhill, 2012).
Moreover; in order to reduce the disadvantages of the interview, as the interviewee could be
biased thus achieving misleading information; therefore, the researcher uses different types of
methods as the OCAI questionnaire in order to get the accuracy of information (Cummings &
Worley, 2008). Accordingly, the interview helps in the interpretation of the interviewee
28
illumination and explanations about the change where the interviewee poses her/his feelings of
the change so that can raise probing questions.
Second, the Quantitative data is based on measurable results; the researcher will
conduct and adopt OCAI (Organisational Cultural Assessments Instrument) questionnaires for
the employees according to the sample size with regards that employees will be from different
departments to represent Kraft / Cadbury’s culture. OCAI questionnaire established by Cameron
and Quinn in 1999, it is composed of twenty four questions regarding culture; dominant
characteristics, Organisational Leadership, the management of employees, organisational glue,
strategic emphasis and criteria for success (Ramachandran, Chong, & Ismail, 2011) that will help
in assessing the research objectives and answer the research questions; each of the six
components of the OCAI assesses the four dimensions of the CVF, for example in the
organisation glue part in the questionnaire the researcher will know whether the company is
Clan, Market, Hierarchy or Adhocracy.
Moreover; Pushnykh and Chemeris agreed that “The OCAI method not only describes the
current organisational culture, but also assesses the aspiration and readiness of an organisation
to change this culture” (Pushnykh & Chemeris, 2006, p. 170). According to Cummings, the
advantages of the questionnaire that it encounters large number of people and the questions will
be fixed response that people can answer quickly and honestly without wasting their time
(Cummings & Worley, 2008).
The researcher encodes and analyse the data by using SPSS Statistics, version 16. The
researcher uses the factor analysis in order to discover the correlations of the hypothesis and the
questions as to know which dimensions in the OCAI prevails in the organisation (Costello &
29
Osborne, 2005). Factor analysis is very popular in the CVF research as many scholars conduct
their statistics by factor analysis to facilitate knowing which culture dominate than the other
(Helfrich, Li, Mohr, & Meterko, 2007).
3.6. The use of OCAI Questionnaire:
The OCAI questionnaire is divided into Now and Preferred divisions were employees are
required to state their agreements based on the six dimensions in order to explore the discrepancy
between the Now and Preferred culture. The OCAI Questionnaire will cross match the
interviewee’s answers as to ensure that there this congruence in both answers regarding
Kraft/Cadbury’s culture where both perceive the change positively or there is inconsistency in
the results. If the employees preferred culture were different from the Kraft/Cadbury’s present
culture therefore it could infer that the culture after acquisition was not preferred to the
employees. Therefore, it will facilitate the understanding of the researcher to plot the
organisation culture type on the CVF. The OCAI is valid and reliable as it is highly used by the
literature (Yu & Wu, 2009) (Lamond, 2003); and by adopting it will save time for the researcher
to allow more rooms for more research analysis.
The OCAI questionnaire is multidimensional scaling where it has two versions to
measure the CVF; first by the “ipsative” where it allows respondents to allocate 100 points
among the four questions in each OCAI dimension according to each question is similar to the
respondent. For example if the respondent score high in a question about the Clan culture so
he/she assign the question by 50, while assigning 5 point to the question that describes
Hierarchal culture. Therefore; by allocating the 100 points that at the end the total will be 100.
The second version is the “Likert scale” where respondents scale the four questions according to
30
the most similar to the respondents’ organisational culture; for example from one to five
(Helfrich, Li, Mohr, & Meterko, 2007). The research use the “likert scale” to allow respondent to
score based on strongly agree to strongly disagree.
3.7. Assessing the culture change in Kraft and Cadbury Acquisition:
The researcher will examine the cultures types of Kraft and Cadbury according to the
CVF, to understand where they stand in the CVF. By that the researcher will be able to detect
whether Kraft is more of clan than Market before and after the acquisition. If the two companies
have two different culture types so there will be culture incompatibility between the two firms
while if the two cultures are similar in degrees so there will be cultural congruence or cultural
fit (Cameron & Freeman, 1991). In addition; the research will examine the role of OCAI
dimensions on establishing organisation fit, cross culture management and the modes of
acculturations as literature clarified that (Vasilaki & O'Regan, 2008, p. 138) (Datta, 1991) (Zhu
& Huang, 2007, p. 41) (Nahavandi & Malekzadeh, 1988, pp. 82-83).
To conclude:
The researcher adopts the triangulation approach which is collecting from different
methods (quantitative, qualitative, and theories) to decrease from the research biases; thus
ensuring validity (Yeasmin & Rahman, 2012, p. 154). Therefore; by conducting the Quantitative
(from the analysis of the questionnaire) and Qualitative data (from the semi-structured
interviews); the researcher will analyse these data quantitatively through SPSS statistics so that
will allow the researcher to compare between the obtained data and the secondary data which are
the theories that the research conducts, as discussed in Chapter 2. Furthermore; the researcher
will consider the confidentiality and anonymity for employees and managers.
31
Chapter Four: Analysis and Findings
4
32
Chapter Four: Analysis and Findings
This chapter will be discussing the findings, interpretation and observations of
Kraft/Cadbury (Mondelēz International)1 from the interview held by the researcher with the HR
business lead manager Mrs. Sally Abououf who witnessed the marriage or the acquisition of
Kraft and Cadbury and from the results of the questionnaires answered by the employees across
departments. Moreover, these analyses will be compared to the literature. Therefore; this chapter
will identify whether the research hypothesis is true or not.
This chapter will be structured as follows; the analysis of the interview, type of
acquisition, acquisition strategy, observation of the researcher inside the company’s culture by
using Schein, and the questionnaire statistic analysis.
4.1. Interviews Analysis:
The researcher conducted two interviews with the Corporate Manager Mrs.Ola Loutfy
who was newly hired after the acquisition by two years, and with the HR Business lead Mrs.
Sally Abououf who has 13 years experience in the FMCG industry and has worked in the
organisation for 8 years. Mrs. Abououf has worked in both firms before the acquisition; first in
Cadbury and right before the acquisition worked in Kraft. Therefore; she highlighted on both
distinct Kraft and Cadbury’s cultures. Mrs. Abououf called the process of the acquisition “a
Harsh Journey to pass this stage” therefore the below paragraphs will explain how this harsh
journey was managed by the managers and employees and how the culture integration took place
(Abououf, 2013).
1 Mondelēz International: The name of Kraft and Cadbury after merge. The researcher mentions
“Mondelēz International” to refer to Kraft and Cadbury’s culture after acquisition.
4
33
First of all before exploring how the acquisition took place, we have to discover Kraft
and Cadbury’s divergent cultures. When asking the interviewee “what is Kraft and Cadbury’s
culture before the acquisition?” Mrs.Abououf answer was follows “both are different in the way
they work, both had different cultures where Cadbury’s dominant culture is purely Market, and
competitive oriented even in the workplace itself between the employees; contrary to Kraft’s
dominant culture was not competitive and more of family workplace oriented (Clan culture)”
(Abououf, 2013).
Why Kraft and Cadbury need such a change? Kraft was in need in this change
(acquisition) more than Cadbury, because Kraft was losing financially as Mrs Abououf clarified,
as well as the intension to enlarge its portfolio as stated in Chapter 3 (Riley, 2010) (Abououf,
2013). Thus Kraft was the Acquirer in order to save its organisation from bankrupt and Cadbury
was the Acquired firm as it is more productive and stronger competitor than Kraft.
Once the announcement of the acquisition took place; Cadbury’s employees were in
shock because they felt that their company is much stronger, successful and competitive than
Kraft which is losing financially. As a result; resistance from employees in both companies
thrived. “Blame was a virus in the organisation” as Mrs. Abououf claimed that both companies’
employees were blaming each other of any poor performance occurred in the organisation right
after the acquisition as there was no mutual trust between both cultures. As each party were
trying to prove that it is more successful than the other by raising the blames and this is
significantly related to the literature; in post-acquisition the two firms start to adopt “Them-Us
syndrome” as they generalise their differences and adopt the win-loss conflict strategy (Pikula,
n.d., p. 11).
34
Accordingly; resistance was highly evidenced in both companies in two things; first the
resistance of employees started from the minor changes they are forced to do, as for example
“changing their offices to new one” this means that employees were satisfied by their status quo
and do not want to unfreeze their present state. Second, employees were threatened and many of
them left the organisation. Kraft, as a result, has faced a lot of turnover after and during the
acquisition as Mrs. Abououf stressed that percentage of the turnover was around 50% of both
companies which was a huge threat for both companies’ employees and that is consistent with
the literature that highlighted that there are two reasons of turnover from post-acquisition are
either employees feel threaten of losing their position and the lack of culture or the organisation
decided to restructure the organisation (Krug, 2009, p. 4) (Datta, 1991). Both reasons applied on
Kraft/Cadbury as Mrs. Abououf claimed that the company also did layoffs to restructure the
organisation and recruited more than fifty new employees last year based on expertise in the
intention of organisation growth. Why would Mondelēz downsized when it is in need for
recruitment? The researcher can infer that Mondelēz intentionally downsized to recruit new
minds and to emerge new blood into the organisation and will not resist from the merge since
they are coming to a new culture.
4.1.1. How the Actions taken for cross-culture management / how the marriage took
place:
As stated above that there was huge resistance in both firms; therefore, managers were very
responsible and hide their resistance of the change in order to reinforce the change. Thus there
were actions taken to make a successful Kraft and Cadbury’s acquisition or marriage which are;
35
a) Hiring an external Organisational development (OD) practitioner to work with an
internal leader of change (the Managing Director of Cadbury),
b) Applying team building trainings and workshops,
c) Establishing regular town halls meetings with managers and employees,
d) Managers regularly announce the “quick wins”,
e) Generation of Hybrids of Appraisals, Rewards, structure of both cultures.
4.1.1. A. The role of leadership and OD Practitioner
Kraft and Cadbury used an external OD practitioner who is expert in inducing, motivating the
change to employees and making creative ways for change that will reduce any resistance. The
OD Practitioner of Kraft and Cadbury acted as an external eye or lens in order to reinforce the
change with the help of the internal leader who is the Managing Director of Cadbury
(Cummings & Wroley, 2008). Therefore; it shows how the acquirer (Kraft) firm did not replace
or deculturate Cadbury’s culture (by imposing Kraft’s culture) and that is evidenced on hiring a
leader for the change from Cadbury on Merit bases where merit means that it is based upon the
good performance (Gabris & Mitchell, 1985); and also the choice of the leader was a satisfactory
for Kraft employees. Thus this acquisition proved that hypothesis 1 is true which is “H1 is:
There is a significant relationship between organisational leadership and the effectiveness of the
acquisition”.
36
4.1.1. B. Teambuilding workshops
As discussed above that both cultures did not trust each other; that was evidenced in the
“Engagement Surveys” conducted to the employees, the Engagement survey is a cultural
workshop that tests the characteristics of the culture that the employees prefer to be applied in
the organisation. However; after the first cultural workshop, the results were not good and that
was because the lack of trust. Therefore; team building was an essential training for Kraft and
Cadbury’s acquisition as to familiarise both cultures with each other by having team building and
communication trainings. Yet it was an alert that drive the leader to communicate with all
managers of the organisation to conduct a communication and teambuilding workshops in order
to build trust.
Therefore the role of the leader was essential, because he was a Cadbury’s employee, he was
able to absorb all the frustrations and dissatisfaction of Cadbury’s employees as they feel more
experienced and productive than Kraft by attending the workshops to be updated with
employees’ changes and by conducting the Engagement survey after the teambuilding training to
know the consistency of the employees preferred culture; thus the role of the leader strengthen
Hypothesis 1 stated above.
According to Mrs. Abououf; Mondelēz applies a program called “Craft your way”. “Craft your
way” program is like coaching programs or on-the-job training. For example; if employees are
stressed, therefore there are coacher who mentor them to do work without stress. And if
employees want to learn something in work, he/she could be coached by the manager who is
expertise in what the employee wants.
37
4.1.1. C. The establishment of regular town halls meetings with managers and employees
After the Acquisition; the leader, the OD Practitioner, and managers agreed on establishing
regular meetings or conference as they call (Town halls) to all employees to update them about
the change because Cadbury’s employees tend to believe that the acquisition was not a good
decision as they did not see any benefits from the acquisition. The word “Town Hall conference”
is American term which means informal meeting for the public (English, 2000) thus it could be
inferred that Kraft imposed this type of informal meetings as it is a US nationality, accordingly
we could say that there is a balance of both culture interference as UK or Cadbury interfered by
its Leader of the change and Kraft or US interfered by the type of the informal meeting.
Therefore, managers decided to announce regularly some of the “quick wins” which is the
announcements of short-term success or wins of the organisation gained from the acquisition to
all employees in order to encourage them and let them feel that they participate in the change
thus they are trying to create a friendly culture (Goede, 2011) (Cuthbertson & Systems, n.d.).
4.1.1. D. A Hybrid Appraisals, Rewards, structure
Any organisation has its own structure, appraisals, and rewards. Therefore, the board of directors
of both companies decided to merge the best of each appraisals and rewards, in other words, to
get the hybrid of the best of both firms. However; the structure of both firms are similar or the
same as they both Matrix structure. Accordingly, the structure was matrix after acquisition and
that facilitate the management as one employee could be managed by two managers from Kraft
and Cadbury. This hybrid encourages board of directors to rename the company as
Mondelēz International and not Kraft and Cadbury to stress on the synergy and they are under
the umbrella of Mondelēz International. This new name will be officially changed in 2014.
38
4.2. Type of Acquisition:
According to Haung and Zhu’s model of cross-culture management discussed in chapter 2, both
culture form culture innovation as both amalgamate both difference and take the best. Therefore
they tend to make a hybrid culture or a third culture the fit with both firms. Accordingly the
acquisition go more than localising some of the acquired firm and go more of transplanting as it
created a new culture (Zhu & Huang, 2007).
Localisation Transplanting
Culture Innovation Evasion Tactic
4.3. Acquisition Strategy
Additionally Catwright and Cooper have discussed the four strategies of merger and
acquisition. As a result, Kraft and Cadbury adopted the Integration Strategy which also shed
lights on the culture innovation of Haung and Zhu’s model. As stated in chapter 1 the differences
of marriage either traditional or modern marriage, the Integration is the modern marriage
(Cartwright & Cooper, 1993, p. 66).
However, Kraft and Cadbury may be passed through the other strategies of Catwright
and Cooper at the initiation of the acquisition where both culture felt that the other culture will
adopt the deculturation strategy; therefore, there was separation strategy which is the
resistance and the by the help of the leader this strategy changed to assimilation (which is the
traditional marriage). Thus this Integration strategy could be called the “Collaborative
Merger” (Cartwright & Cooper, 1993, pp. 64-65). A prove of Kraft and Cadbury’s integration is
39
the formulation of and naming the company Mondelēz International rather than calling Kraft and
Cadbury
Therefore the hybridity of both culture appeared in using the best of each culture. As Kraft (US)
has a friendly culture thus it involved in establishing the informal town halls conferences, while
Cadbury (UK) focus on competition, productivity thus it involved by its motivated leader of
change.
4.4. Merger emotion syndrome model:
According to chapter 2 and the interview; the researcher applied the “Merger-emotion model”
proposed by Hunsaker and Coombs (1988, 60) as cited in (Pikula, n.d., p. 7). As the interviewer
found difficulty at the beginning in distributing the questionnaire to the employees and that is
because interviewee claimed that the employees are not in a stage to speak about the acquisition.
Therefore; the researcher could interpret that Mondelēz is in the liking stage but no yet enjoying
the acquisition thus ensures that the acquisition still is not strong enough to let employees talk
about it.
Figure 4:1
40
4.5. An inside observation on Mondelēz International’s culture using Schein’s
three levels of the Organisational Culture
As discussed in chapter 2 the 3, the levels of Edgard Schein that discover the inside
culture of any organisation. Therefore the researcher applies the three levels of culture on
Kraft/Cadbury’s organisational culture. When the researcher entered the company; first the
artefacts were shown in the public employees’ offices layout although the directors’ offices
were private yet they were designed in a way that does not isolate them from the rest of the
employees that is structured openly without doors. In addition to a “baby foot game” in the
centre of the office building, and also employees’ wear casual clothing even the managers;
therefore; these artefacts show how the organisational culture is informal. The second level
which is the values as it is written in Mondelēz International website that they value; “we are
open and inclusive”, “we inspire trust”, “we act as owners”, and “we tell it like it is” these values
ensure that Mondelēz International are very open, and participative (About Us: Our Values,
n.d.). The third level, the assumptions which is hardly known because this level could questions
what is not clearly stated as why both cultures behave in a friendly way and the simple answer
because they are Clan Culture because they behave in an open and flexible way.
4.6. Questionnaire Statistics analysis:
As discussed in the previous chapter that the OCAI questionnaire is distributed to the
employees and managers. The questionnaire was distributed among 60 employees and managers
but only received 31 valid answered questionnaires. The researcher assesses the validity through
the Cronbach's Alpha which is 0.670 and that shows the validity.
41
Case Processing Summary
N %
Cases Valid 31 100.0
Excluded 0 .0
Total 31 100.0
Reliability Statistics
Cronbach's Alpha N of Items
.670 48
Table 4:1
The researcher has used the SPSS Statistics version 16 to get the results of the Likert
scale questionnaires and by linking it to the interview questions, hypothesis and research
questions. By using the SPSS, the researcher collects the sum of all respondents to each culture
type (Clan, Adhocracy, Market, and Hierarchy) for now and preferred in order to know the
discrepancy between both. In addition to know which culture archetype of Kraft/Cadbury’s
dominant culture after the acquisition, the researcher divides the sum of the Now and Preferred
for each archetype to the total and then multiplied it by 100 % in order to plot the result on the
graph; as shown in the table below.
42
NOW
Sum Result
Clan 892.00 (892/3004)100 = 29.69
Adhocracy 705.00 (705/3004)100 = 23.46
Market 800.00 (800/3004)100 = 26.63
Hierarchy 607.00 (607/3004)100 = 20.20
Total 3004.00 100
Table 4:2
Preferred
Sum Result
Clan 881.00 (881/3016)100 = 29.21
Adhocracy 743.00 (743/3016)100 = 24.63
Market 832.00 (832/3016)100 = 27.58
Hierarchy 560.00 (560/3016)100 = 18.56
Total 3016.00 100
Table 4:3
Thereafter the results shown in the table above will be plotted on the graph shown in the
next figure. The researcher used a website that facilitates users to assess their organisational
culture by plotting the results to view the graph (Simon & Cozens, 2010). Therefore; the below
figure show the results of Mondelēz or Kraft/Cadbury’s organisational culture based on the 31
questionnaires respondents.
43
Figure 4:2
The graph above shows that Mondelēz has a dominant culture style of Clan by 29.69% and less
extent market culture style by 26.63% and low in Hierarchy culture style as it is 20.20%.
Therefore; it shows how the dominant culture becomes Clan as it is a hybrid from the
acquisition. Moreover the above graph answers the research question which is: “To what extent
does the organisational culture impact the acquisition?” the answer of this question is that the
difference between the percentage of Clan and Market is so small which is 3.06% and that means
(Simon & Cozens, 2010) http://www.simon-cozens.org/content/ocai-o-matic
44
that Kraft’s culture is the dominance is clan and then come the market of Cadbury’s culture thus
this shows how both culture synergistically integrated.
Moreover; another way to ensure that Mondelēz is a clan culture is by getting the Mean for each
Culture type (Clan, Market, Adhocracy and Hierarchy) as shown in tables 4:4 and 4:5 in the
Appendixes the Now and Preferred. In these tables; the standard deviation of the clan is the
lowest which means that there is consistency in the answers of the respondents in Clan culture;
however, Hierarchy culture has the largest standard deviation which means that there is
inconsistency in the employees answers where some stated that they agree and other disagree.
Therefore the highest consistency of the Clan culture were most of the employees strongly
agree/agree that their culture is friendly and team work.
Table 4:4 and Table 4:5 in the Appendix
Furthermore; the discrepancy of the Now and the Preferred is too low as at the table above the
mean of the Clan Now is 28.77 and Clan Preferred is 28.41 thus it shows how employees are
satisfied by their current culture.
When asking the respondents “Were you a Kraft employee / Cadbury employee / newly hired
after the acquisition” The answer was 76% were newly hired; thus this means that the newly
employees do not know the previous cultures of both firms thus they answered according to the
current culture of Mondelēz. As Mrs. Abououf claimed that they hired new applicants who have
the organisation fit with the new culture. Contradictory of some literature; Verburg identified
that after joint ventures companies tends to be overstaffed so they disregard new hires (Verburg,
1996, p. 522).
45
However; only who answered or added that they are from Kraft and Cadbury are seniors who
initiated and experienced the change and do not want to state that they are from specific
company as to stress on the integration and marriage that make them one company or one culture
and to remove the discrepancy between both.
Figure 4:3
46
As shown in figure 4:4; after selecting cases for those who wrote that they are from Kraft and
Cadbury were 4 seniors’ managers and directors.
Figure 4:4
47
Count
CLAN NOW * Number of years you have worked in this organisation
Cross- tabulation
Number of years you have worked in this
organisation
Total 1 1.5 2 2.5 3 4 5 6 8
CLAN NOW
Agree 2 0 0 0 0 0 0 0 0 2
Strongly
Agree 8 2 7 3 1 1 3 2 2 29
Total 10 2 7 3 1 1 3 2 2 31
Table 4:6
The table above shows that mainly the majority who answered strongly agree are 8 employees
in Clan questions of the six OCAI Dimensions are employees who worked 1 to 2 years. In
addition to the table above shows that the majority who answered the 31 questionnaires worked
also from 1 to2 thus this shows how the organisation was enriched by the newly employees who
are new bloods to the organisation and are able to be shaped to the new culture. To conclude; the
CVF statistics above may reflect that Kraft imposed its Clan Culture on Cadbury; however, by
using the factor analysis could either ensure that Kraft imposed its culture or Cadbury’s culture
was imposed and that answer the research question; “To what extent does the
acquisitions/integration impact the culture of Kraft and Cadbury?”.
Using the factor analysis statistics:
Factor analysis assesses the correlation between variables and the OCAI questions and answers
(Costello & Osborne, 2005). Therefore; the researcher has used this type of statistics that helps in
knowing which culture and dimensions of the OCAI is important to Mondelēz.
- The below Communalities table shows the 24 questions of the OCAI; however the researcher
took a snap shoot for the table that shows only 11 questions (the full table shown in the
48
Appendix). Each question’s initial valued by 1; means that if the extraction of a question is
nearest to 1 so that means this question is very related to Mondelēz and the acquisition; if
another question is far from 1; therefore, it is uncorrelated to Mondelēz. Thus in question 11
“The management style in the organisation is characterised by hard-driving competitiveness,
high demands, and achievement.” has high extraction which is 0.840 which means that the
management style of Mondelēz is correlated to Market or competitive culture that lead to
effective acquisition.
However the least is question 3 “The organisation is very results oriented. A major concern is
with getting the job done. People are very competitive and achievement oriented.” 0.59 That
means the dominant characteristics of Mondelēz uncorrelated to Adhocracy
Notice that this is a part of the factor analysis table (the whole table in the Appendix)
Table 4:7
49
Thereafter; the researcher encodes the Suppress Value to be less than 0.4 which
means that any question has value less than 0.4 will be excluded because it has low or no relation
to Mondelēz. As shown in table 4:8 in the Appendix the “Pattern matrix” which is similar to the
factor loading which means that the 24 questions are suppressed into 8 factors where each factor
includes certain questions (Items) that is correlated to the factor.
Table 4:8 in the Appendix
Therefore; the first factor represented in table 4:9 has 5 questions which have the highest %
of Variance which is 21.933 (in table 4:9 in the Appendix);
- The organisation is very results oriented. A major concern is with getting the job done. People
are very competitive and achievement oriented.
- The glue that holds the organisation together is the emphasis on achievement and goal
accomplishment. Aggressiveness and winning are common themes.
- The organisation emphasises acquiring new resources and creating new challenges. Trying new
things and prospecting for opportunities are valued.
- The organisation emphasises competitive actions and achievement. Hitting stretch targets and
winning in the marketplace are dominant.
- The organisation defines success on the basis of winning in the marketplace and outpacing the
competition. Competitive market leadership is key.
Accordingly the first factor include 4 Market items and 1 Adhocracy item thus the
researcher named the first factor Market
The second factor which the second highest factor after the first factor that has % of variance
10.677. The questions in this factor are;
50
- The glue that holds the organisation together is loyalty and mutual trust. Commitment
to this organisation runs high
- The organisation emphasises human development. High trust, openness, and
participation persist.
- The organisation defines success on the basis of the development of human resources,
teamwork, employee commitment, and concern for people.
Thus the second factor is related to Clan culture.
According to the literature; Leda Panayotopoulou, Bourantas & Papalexandris had used the CVF
and claimed that Clan and Adhocracy cultures are highly important for acquisitions as to be
flexible and willing to take risks (Panayotopoulou, Bourantas, & Papalexandris, 2003)
Table 4:9 in the Appendix
- The table below summing up the findings of the factor analysis of the pattern and total
variance table:
First Factor(Market) Highest dimensions
Dimension Culture Type
Dominant Characteristics
Market Culture
Organisation Glue
Criteria of success
Strategic Emphasis
Strategic Emphasis Adhocracy Culture
Second Factor(Clan) Highest dimensions
Dimension Culture Type
Organisation Glue
Clan Culture Strategic Emphasis
Criteria of success
Table 4:10
51
Therefore; the factor analysis proved that Kraft did not impose its own culture; however, there
was a balance between both cultures as it assures that there was an effective integration that
leads to effective acquisition; according to Rai Kraft was very ethical (third dimension Rai
proposed on CVF) in acquisition (Rai, 2011).
By applying the factor analysis on the Six Dimensions
Communalities
Initial Extraction
Dominant characteristics 1.000 .520
Organisation glue 1.000 .493
Organisation leadership 1.000 .641
Management of Employees 1.000 .419
Strategic Emphasis 1.000 .656
Criteria of Success 1.000 .732
Extraction Method: Principal Component Analysis.
Table 4:11
Therefore the highest correlated dimension in establishing effective acquisition of Kraft and
Cadbury is the Criteria of success that was proves above that the criteria of success was
correlated also with Market then Clan cultures.
Table 4:12 in the Appendix
52
Pattern Matrixa
Component
1 2
Dominant characteristics .511 .440
Organisation glue .654
Organisation leadership .799
Management Employees .608
Strategic Emphasis .704
Criteria Success -.560 .733
Extraction Method: Principal Component Analysis.
Rotation Method: Promax with Kaiser Normalisation.
a. Rotation converged in 3 iterations.
Table 4:13
- Thus the first factor which is the highest correlated dimensions that contributed to the
acquisition is (Dominant characteristics, Organisation leadership, Management Employees,
and Criteria Success)by 37.073 % of variance in Table 4:12 in the Appendix.
Research Hypothesis of the six dimensions of the Current or (Now) state in the Appendix:
H1: There is a significant relationship between organisational leadership and the effectiveness of
the acquisition; H1 is
accepted.
Table 4:14
53
H2: The compatibility of employee management of the OCAI will lead to a significant impact on
effective acquisition. H2 is accepted.
H3: There is a relationship between organisational glue and the effectiveness of the acquisition.
H3 is accepted.
54
The correlations above are interlinked with the literature that competition is very essential in all
firms in order to gain competitive advantages; therefore once a firm had competitive glue, thus
will impact on its employees and leaders (Barney, 1986).
H4: The congruence of the criteria of success is a dimension in OCAI in facilitating effective
acquisition. H4 is accepted.
This means that Mondelez’s employees believe and behave innovatively to successes thus the
criteria for success in by Innovation.
55
H5: There is a significant relationship between culture strategic emphasis and effective
acquisition. H5 is accepted.
Innovation is the strong emphasis in Mondelez
H6: The compatibility in the culture’s dominant characteristic is a barrier for effective
acquisition. H6 is accepted.
56
Therefore; H4, H5, and H6 shows strong correlation with Adhocracy. And that is normal
because the literature has identified that organisations have the 4 culture types in degrees.
H0: The incompatibility in the culture’s dominant characteristic is a barrier for effective
acquisition. (Not accepted with clan cultures)
As it is above 0.10 the significant level.
The researcher believes that because of the small sample size, it leads to different types of
culture as the Adhocracy culture. Thus the conclusion of the above correlation that there are
significant relations to Adhocracy and Market Culture
57
4.7. Relating Hofstede five dimensions to Kraft/Cadbury and the Egyptian Context “do UK
and USA differ in work in a host country?”
According to Hofstede the US
(Kraft Company) and UK (Cadbury
Company)’s cultures have some
similarities and slight culture difference
that might guarantee that acquisition
went smoothly. As shown in this
Figure; the two cultures are similar in
some dimensions thus it shows the
congruence in both cultures. However
in some dimensions, as the high
individuality of cultures are not applied
in Kraft/Cadbury’s organisational culture because they are collectivist that is similar to clan
culture. Therefore; the researcher can observe that because all of the 31 respondents coming
from the Egyptian culture (Host Country); thus their high collectivism supported in establishing
the Clan culture. To conclude the researcher agrees with the literature that USA and UK are
similar in the assumptions and values (Kashlak, Phatak, & Bhagat, 2009, p. 113).
To conclude;
After conducting the analysis; the researcher found that Kraft and Cadbury are clan and market
cultures based on the factor analysis and the CVF instrument Statistics. However; the correlation
Retrieved from: http://geert-hofstede.com/united-kingdom.html
Figure 4:5
58
shows differences and that is because of the small sample size that affect the outcome. The
researcher opinion that both firms have the intention to win/win solutions, as both impose the
best in each culture thus having synergistic culture to facilitate effective acquisition; but also
statistics and the interview showed that they still not in the stage to speak about the acquisition as
their emotions did not reached to enjoyment stage.
59
Chapter Five: Conclusion
5
60
Chapter Five: Conclusion:
5.1. Summary of the Findings:
The final chapter summarises and concludes the findings and outcomes. The results of the
culture of Kraft and Cadbury after the acquisition were both Clan and Market cultures. As the
CVF statistics showed that it is more of Clan than Market culture while the factor analysis
showed that it is more of Market than Clan culture. As highlighted in Chapter 4; before the
acquisition Kraft (US) was a Clan culture, while Cadbury (UK) was Market culture. Therefore
the researcher infers that after the acquisition both cultures integrate to reach to the results of
clan and market. Accordingly; this integration was opposite to the literature that no company
imposes its culture on the other (Shook & Roth, 2011). Since Mondelēz is clan and market
culture which is hybrid of both firms; thus, it answers the research question “To what extent
does the organisational culture impacts the acquisition?”; all employees working in Mondelēz
are Egyptian, which facilitates and ensures the presence of Clan culture; because Egyptians are
collectivism in Hostede’s dimensions as stated previous chapter that supported the presence of
Clan culture spontaneously.
Moreover the analysis of the correlations of the research hypothesis showed that there
are different correlations with different culture types such as Adhocracy culture. This could be
inferred by the researcher that as Helfrich, Li, Mohr, Meterko, & Sales identified that all
organisations have the four culture types but in degrees (Helfrich, Li, Mohr, Meterko, & Sales,
2007); thus the adhocracy culture is definitely correlated but in low degree. Another
interpretation that the correlations were not consistent as it shows no correlations with clan
because the sample size was too small that do not represent the whole population of Mondelēz.
5
61
Therefore; H1: There is a significant relationship between organisational leadership and
the effectiveness of the acquisition. This hypothesis is accepted, as there is strong correlation and
as identified in Chapter 4 where the effective role of the leader who was coming from Cadbury’s
market culture and helped in bridging the change, was identified. Thus it shows significant
correlations by 0.030 at 0.050 significant levels to Market Culture.
According to H2: The compatibility of employee management of the OCAI will lead to a
significant impact on effective acquisition and H3: There is a relationship between
organisational glue and the effectiveness of the acquisition. Both hypotheses are accepted ad
correlated with Market culture also as identified in Chapter 4; being a market culture is essential
in the agile market.
H4: The congruence of the criteria of success is a dimension in OCAI in facilitating
effective acquisition, H5: “There is a significant relationship between culture strategic emphasis
and effective acquisition”, H6: The compatibility in the culture’s dominant characteristic is a
barrier for effective acquisition. The last three hypotheses indicates the accepted correlation of
adhocracy culture and are null in correlation with Clan culture; however, in the researcher point
of view that Mondelēz has to be alerted by the third culture; as more different cultures interfere it
may leads to loss of culture identity in the organisation culture of Mondelēz thus creating chaos
(Weber, Shenkar, & Raveh, 1996).
The research objectives were achieved. One of the research objectives; “To explore the
reasons and components Acquisition takes place and its effects.” First; “the research explored
the reasons that Kraft for the acquisition”; to enlarge the portfolio and increase financially, in
addition to knowing the components of the acquisition that facilitates in achieving the
organisation fit between the two firms thus achieving effective acquisition. Clarifying the
62
objective of the relationship between organisation culture and acquisition was significant when
both firms have synergistic cultures as clan with market culture thus achieving smooth
acquisition. The actions taken facilitate the actions by the support of the leader, teambuilding
workshops; in addition to the researcher recommends additional actions for inducing the
acquisition as the presence of external eye as OD Practitioner to address the shortcoming that
insiders (employees and managers) may not be able to detect it.
Therefore; at this stage we could answer the research question “Did the cross-border
acquisition enhance the acculturation and fit between firms? The answer was clarified in
chapter 2 and 4 which is because of the acquisition let both firms married and acculturate both
culture by hybridity. Moreover; the research question “Are organisations effective with
congruent culture or incongruent cultures?” this question was evidenced in chapter 4 as it
shows from the statistic the incongruence of both firms’ culture that facilitate effective in
creating innovation in acquisition. Accordingly acquisition changed the mental models of Kraft
and Cadbury as they become integrated in both culture rather than only one thus this answers the
research question of “To what extent does the acquisitions/integration impact the culture of
Kraft and Cadbury?”
5.2. Limitations the research:
This research has limitations that affect its findings. First limitation, the questionnaire sample
was too small (31 respondents) because it was hard access to the employees as they were in rush
time. Second limitation; because the questionnaire based on non-probability sampling;
therefore, most employees who answered the questionnaire were newly hired thus they did not
witnessed the change. However; the researcher was targeting more seniors or employees who
experienced the change in order to discover the discrepancy between the now and preferred.
63
Third limitation; the researcher intentions to get the unobtrusive data (Mondelēz’s organisation
chart) to discover their structure and whether the top management of Mondelēz was by
Cadbury’s (productive) or Kraft’s (the acquirer) managers. However it was confidential for the
organisation to share it; therefore, the researcher preferred to ask about their structure and how it
affects the acquisition to reduce this limitation affect on the research.
5.3. Research Recommendations:
A recommendation for Mondelēz; First, the researcher recommends actions taken to sustain for
Mondelēz to regularly conduct culture trainings in criteria of success, strategic emphasis and
dominant characteristics (that scored significant correlation with Adhocracy) to assure that
Market and Clan culture are sustained. Second, since Mrs. Abououf claimed that the employees
in the stage to talk about acquisition; thus there must be trainings for employees to address their
cognitive dissonance as their reaction not like what they feel to enhance complete successful and
enjoyment emotions level of the acquisition.
5.4. Practical Implication: The CVF has to be revised:
As identified in Chapter 2 that the CVF missed Ethics as third dimension that Rai have added;
this dimension is important in acquisitions because organisations tend to go to unethical
procedures applied on employees without their consent as downsising (Rai, 2011, pp. 787-789).
In addition to that; some mergers and acquisitions cases; the acquirer firm tend to impose its own
culture on the acquired one without their consent; thus it is also unethical. Therefore; the
researcher believes that Ethics is essential that must be added and revised to the CVF.
64
5.5. Recommendations for Further readings:
This topic is significant in the literature and that because of nowadays frequent acquisitions held
in different industries that faced culture clash. Therefore; the researcher recommends further
readings for the types of resistance of employees and managers where the literatures call it “the
human side” and how it would recover in addition to studying on the employee’s motivations
(Pablo & Javidan, 2009). The second further reading; because the time limitation would not let
the researcher capable to discuss the essential role of leadership and the Organisation
development concept; therefore, this research suggests further readings about the role of OD
Practitioner who initiate the change creatively.
65
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Appendix
Tables in Chapter Four:
Table 4:4; Table 4 in Chapter4
NOW Descriptive Statistics
N Sum Mean Std. Deviation
Clan 31 892.00 28.7742 1.60644
Adhocracy 31 705.00 22.7419 3.83812
Market 31 800.00 25.8065 3.81593
Hierarchy 31 607.00 19.5806 4.95159
Total 31 3004.00 96.9032 6.74465
Valid N (listwise) 31
Table 4:5; Table 5 in Chapter4
PREFERRED Descriptive Statistics
N Sum Mean Std. Deviation
Clan 31 881.00 28.4194 1.47816
Adhocracy 31 743.00 23.9677 3.95377
Market 31 832.00 26.8387 2.20751
Hierarchy 31 560.00 18.0645 4.63994
Total 31 3016.00 97.2903 7.62974
Valid N (listwise) 31
Table 4:8; Table 8 in chapter 4
Pattern Matrixa For the 24 Items grouped into 8 factors that tests the current Mondelēz culture
Component
1 2 3 4 5 6 7 8
1-The organisation is a very personal place. It is like an
extended family. People seem to share a lot of themselves .693
2-The organisation is a very dynamic entrepreneurial
place. People are willing to stick their necks out and take
risks
.791
7
71
3-The organisation is very results oriented. A major
concern is with getting the job done. People are very
competitive and achievement oriented.
.421 .421
4-The organisation is a very controlled and structured
place. Formal procedures generally govern what people do. .859
5-The leadership in the organisation is generally
considered to exemplify mentoring, facilitating, or
nurturing.
.597 .451
6-The leadership in the organisation is generally
considered to exemplify entrepreneurship, innovating, or
risk taking.
.791
7-The leadership in the organisation is generally
considered to exemplify a no-nonsense, aggressive,
results-oriented focus.
.765
8-The leadership in the organisation is generally
considered to exemplify coordinating, organising, or
smooth-running efficiency.
.822
9-The management style in the organisation is
characterised by teamwork, consensus, and participation. .880
10-The management style in the organisation is
characterised by individual risk-taking, innovation,
freedom, and uniqueness.
.810
11-The management style in the organisation is
characterised by hard-driving competitiveness, high
demands, and achievement.
.456
12-The management style in the organisation is
characterised by security of employment, conformity,
predictability, and stability in relationships.
.843
13-The glue that holds the organisation together is loyalty
and mutual trust. Commitment to this organisation runs
high.
.858
14-The glue that holds the organisation together is
commitment to innovation and development. There is an
emphasis on being on the cutting edge.
.779
15-The glue that holds the organisation together is the
emphasis on achievement and goal accomplishment.
Aggressiveness and winning are common themes.
.826
72
16-The glue that holds the organisation together is formal
rules and policies. Maintaining a smooth-running
organisation is important.
-.671
17-The organisation emphasises human development.
High trust, openness, and participation persist. .526
18-The organisation emphasises acquiring new resources
and creating new challenges. Trying new things and
prospecting for opportunities are valued.
.542
19-The organisation emphasises competitive actions and
achievement. Hitting stretch targets and winning in the
marketplace are dominant.
.836
20-The organisation emphasises permanence and stability.
Efficiency, control and smooth operations are important. .606
21-The organisation defines success on the basis of the
development of human resources, teamwork, employee
commitment, and concern for people.
1.037
22-The organisation defines success on the basis of having
the most unique or newest products. It is a product leader
and innovator.
-.451 .779
23-The organisation defines success on the basis of
winning in the marketplace and outpacing the competition.
Competitive market leadership is key.
.610 -.440
24-The organisation defines success on the basis of
efficiency. Dependable delivery, smooth scheduling and
low-cost production are critical.
-.725
Extraction Method: Principal Component Analysis.
Rotation Method: Promax with Kaiser Normalisation.
a. Rotation converged in 17 iterations.
73
Table 4:9; Table 9 in chapter 4
Total Variance Explained of factor analysis of the 24 Items
Component
Initial Eigenvalues
Extraction Sums of Squared
Loadings
Rotation Sums
of Squared
Loadingsa
Total
% of
Variance Cumulative % Total
% of
Variance
Cumulative
% Total
1 5.264 21.933 21.933 5.264 21.933 21.933 4.012
2 2.562 10.677 32.610 2.562 10.677 32.610 3.243
3 2.478 10.325 42.935 2.478 10.325 42.935 3.108
4 2.096 8.734 51.668 2.096 8.734 51.668 2.113
5 1.627 6.779 58.447 1.627 6.779 58.447 2.494
6 1.502 6.257 64.704 1.502 6.257 64.704 2.721
7 1.242 5.177 69.881 1.242 5.177 69.881 2.346
8 1.121 4.672 74.553 1.121 4.672 74.553 1.849
9 .950 3.959 78.512
10 .817 3.403 81.914
11 .774 3.226 85.140
12 .713 2.971 88.111
13 .603 2.512 90.623
14 .444 1.852 92.475
15 .426 1.776 94.251
16 .365 1.520 95.770
17 .255 1.063 96.833
18 .211 .878 97.712
19 .163 .677 98.389
20 .125 .520 98.909
21 .094 .391 99.300
22 .078 .325 99.625
23 .057 .236 99.861
24 .033 .139 100.000
74
Table 4:12; Table 12 in Chapter 4
Total Variance Explained
Compo
nent
Initial Eigenvalues Extraction Sums of Squared Loadings
Rotation
Sums of
Squared
Loadingsa
Total % of Variance Cumulative % Total % of Variance Cumulative % Total
1 2.224 37.073 37.073 2.224 37.073 37.073 1.819
2 1.237 20.613 57.686 1.237 20.613 57.686 1.786
3 .775 12.911 70.597
4 .746 12.426 83.022
5 .591 9.852 92.875
6 .428 7.125 100.000
Extraction Method: Principal Component
Analysis.
a. When components are correlated, sums of squared loadings cannot be added to obtain a total variance.
Hypothesis Correlations in Chapter 4:
Correlations of Hypothesis 1; Accepted
organisational
leadership Market Now
Organisational leadership Pearson
Correlation 1 .389*
Sig. (2-tailed) .030
N 31 31
Market
Pearson
Correlation .389* 1
Sig. (2-tailed) .030
N 31 31
*. Correlation is significant at the 0.05 level (2-tailed).
Extraction Method: Principal Component Analysis.
a. When components are correlated, sums of squared loadings cannot be added to obtain a total variance.
75
Table 4:14; Table 14 in Chapter 4
Correlations of Hypothesis 3; Accepted
organisational
glue Market
Organisational Glue Pearson
Correlation 1 .322
Sig. (2-tailed) .078**
N 31 31
Market Pearson
Correlation .322 1
Sig. (2-tailed) .078**
N 31 31
**. Correlation is significant at the 0. 10 level (2-tailed). Table 4:16; Table 16 in Chapter 4
Correlations Hypothesis 2; Accepted
Managemen
t of
Employees Market
Management of
Employees
Pearson Correlation 1 .472**
Sig. (2-tailed) .007
N 31 31
Market Pearson Correlation .472** 1
Sig. (2-tailed) .007
N 31 31
**. Correlation is significant at the 0.01 level (2-tailed). Table 4:15; Table 15 in Chapter 4
76
Correlations of Hypothesis 4; Accepted
Criteria of
Success Now
Adhocracy
now
Criteria of Success Now Pearson
Correlation 1 .517**
Sig. (2-tailed) .003
N 31 31
Adhocracy Pearson
Correlation .517** 1
Sig. (2-tailed) .003
N 31 31
**. Correlation is significant at the 0.01 level (2-tailed).
Table 4:17; Table 17 in Chapter 4
Correlations of Hypothesis 5; Accepted
Adhocracy
Strategic
Emphasis
Adhocracy Pearson
Correlation 1 .505**
Sig. (2-tailed) .004
N 31 31
Strategic Emphasis Pearson
Correlation .505** 1
Sig. (2-tailed) .004
N 31 31
**. Correlation is significant at the 0.01 level (2-tailed).
Table 4:18; Table 18 in Chapter 4
77
Correlations of Hypothesis 6; Accepted
Dominant
characteristics Adhocracy
Dominant Characteristic Pearson
Correlation 1 .546**
Sig. (2-tailed) .001
N 31 31
Adhocracy Pearson
Correlation .546** 1
Sig. (2-tailed) .001
N 31 31
**. Correlation is significant at the 0.01 level (2-tailed).
Table 4:19; Table 19 in Chapter4
Correlations of Hypothesis 6; Not Accepted with Clan Culture
Dominant
Characteristic Clan
Dominant
Characteristic
Pearson Correlation 1 .000
Sig. (2-tailed) .998
N 31 31
Clan Pearson Correlation .000 1
Sig. (2-tailed) .998
N 31 31
Table 4:20; Table 20 in Chapter4
78
Gender: M/F Age: 20-30 30-40 40-50 50< Nationality: ...............................
Number of years you have worked in this organisation.............................................................................
Years of experience in the FMCG2 industry: ............................ Field of Study: ......................................
Position level: .......................................................... From which Department: .........................................
Did you live abroad before? ................................. If yes, how long? .........................................................
Were you a Kraft employee / Cadbury employee / newly hired after the acquisition
1. Dominant Characteristics Now Preferred
A The organisation is a very personal place. It is like an extended family.
People seem to share a lot of themselves.
B The organisation is a very dynamic entrepreneurial place. People are
willing to stick their necks out and take risks.
C The organisation is very results oriented. A major concern is with
getting the job done. People are very competitive and achievement
oriented.
D The organisation is a very controlled and structured place. Formal
procedures generally govern what people do.
2. Organisational Leadership Now Preferred
A The leadership in the organisation is generally considered to exemplify
mentoring, facilitating, or nurturing.
B The leadership in the organisation is generally considered to exemplify
entrepreneurship, innovating, or risk taking.
C The leadership in the organisation is generally considered to exemplify
a no-nonsense, aggressive, results-oriented focus.
2 FMCG: Fast-moving consumer goods industry
Dear Respondent, I’m a student in the British University in Egypt and I
am conducting a research related to my Dissertation for my Bachelor degree. I
would appreciate your help by answering the following questions. The aim of the
questionnaire to explore the culture congruence in Kraft Cadbury Acquisition
This information will be treated anonymously and will be used for academic
purposes only. Your answers will help the researcher a lot.
OCAI Questionnaire
- Please indicate your agreement to the statement of Now and Preferred state,
A. Strongly Agree B. Agree C. Neutral D. Disagree E. Strongly Disagree
79
D The leadership in the organisation is generally considered to exemplify
coordinating, organising, or smooth-running efficiency.
3. Management of Employees Now Preferred
A The management style in the organisation is characterised by teamwork,
consensus, and participation.
B The management style in the organisation is characterised by individual
risk-taking, innovation, freedom, and uniqueness.
C The management style in the organisation is characterised by hard-
driving competitiveness, high demands, and achievement.
D The management style in the organisation is characterised by security of
employment, conformity, predictability, and stability in relationships.
4. Organisation Glue Now Preferred
A The glue that holds the organisation together is loyalty and mutual trust.
Commitment to this organisation runs high.
B The glue that holds the organisation together is commitment to
innovation and development. There is an emphasis on being on the
cutting edge.
C The glue that holds the organisation together is the emphasis on
achievement and goal accomplishment. Aggressiveness and winning
are common themes.
D The glue that holds the organisation together is formal rules and
policies. Maintaining a smooth-running organisation is important.
5. Strategic Emphasis Now Preferred
A The organisation emphasises human development. High trust,
openness, and participation persist.
B The organisation emphasises acquiring new resources and creating new
challenges. Trying new things and prospecting for opportunities are
valued.
C The organisation emphasises competitive actions and achievement.
Hitting stretch targets and winning in the marketplace are dominant.
D The organisation emphasises permanence and stability. Efficiency,
control and smooth operations are important.
6. Criteria of Success Now Preferred
A The organisation defines success on the basis of the development of
human resources, teamwork, employee commitment, and concern for
people.
B The organisation defines success on the basis of having the most unique
or newest products. It is a product leader and innovator.
C The organisation defines success on the basis of winning in the
marketplace and outpacing the competition. Competitive market
leadership is key.
D The organisation defines success on the basis of efficiency. Dependable
delivery, smooth scheduling and low-cost production are critical.
Thank you for your time
80
Interview Questions
Interviewer: Yassmin Elemary
Interviewee: Mrs. Sally Abououf
Interviewee’s Position: HR Business Lead in Kraft/Cadbury or Mondelēz International
Topics discussed in the interview:
Culture:
1. Are you a Kraft employee or Cadbury?
2. How would you describe the culture of Kraft in terms of; Market (competition), clan
(friendly workplace), Adhocracy (innovative), and Hierarchy (rules and regulations)?
3. How would you describe the culture of Cadbury in terms of; Market (competition), clan
(friendly workplace), Adhocracy (innovative), and Hierarchy (rules and regulations)?
4. What is Kraft/Cadbury’s culture after acquisition?
For example the culture was first working individually and after the acquisition culture change
toward teamwork?
Training:
5. Is there were difference in training programs; performance management and recruiting
between both companies and you merge between them?
6. Is the name of the acquisition changed from Kraft/Cadbury to another one?
Structure:
7. What is the organisational structure of both cultures? Hierarchy or flat? If different
structure how they merge?
8. What is the structure now?
Culture change and resistance:
9. What are the difficulties faced during the merge?
10. Would you describe any of the difficulties as cultural? And how it is solved?
11. When top management/employees heard that there will be acquisition; did they
appreciate it or resist it?
12. If there is resistance; who are mainly resist employees or Top managers?
13. How did you orient the employees for such merge?
14. I heard that after the acquisition; there were turnover from employees; is that right? What
is the percentage?
15. What do you thing the reasons for the turnover?