Assessment of Relationship Between Organizational Culture, Identification and Commitment in the Context of Mergers

Abstract

Culture is the glue that binds people across geographical boundaries. Culture provides the unique identification to a group and provides its members a sense making ability to view the world and perceive it in a way distinct from other groups. This dimension of culture permeates into the professional realm and creates an organizational culture that is specific to each organization. All employees of an organization internalize the core values and propagate the organizational culture in their ordinary activities. Organizational culture assumes importance when an organization envisages a change. One such change initiative is through the inorganic route of a merger. A merger involves two almost similar and equal organizations coming together and forming a new entity in order to realize stated gains. But studies have shown contrary results. Most mergers fail to deliver as promised. Studies have also revealed that organizations do not consider the impact of organizational culture and its associated variables as part of their due diligence efforts before the merger. This provided the impetus for the current study. The researcher has made an attempt to assess the relationship between organizational culture, identification and commitment on mergers with specific reference to the Indian manufacturing and service sectors. The researcher framed research questions, research objectives and research hypotheses to serve as a guide for instituting the study. A review of related literature provided the foundation to base the study and helped in the development of a literature map and the conceptual framework. The research design envisaged for the study was a mixed method combining both the qualitative and the quantitative approaches to collect in depth data. The initial research was exploratory with the aid of the grounded theory methodology to crystallize the variables for the study. The identified variables were then tested on the sample identified through the administration of a questionnaire and an interview schedule. A mixed sampling method was adopted for the study in line with the mixed research approach. The sampling method was a combination of the probability and non-probability methods and it was used in an iterative method again in line with the grounded theory methodology. The sampling frame was ascertained from the databases of the CMIE and the Bangalore Stock Exchange. A total number of thirty nine organizations that had taken the merger route formed the basis fordrawing the sample. Each of these organizations was represented by six respondents from the three managerial levels, thus making up a total of two hundred and twenty eight respondents. The data collected was subject to statistical analysis such as the Chi-square test, McNemar Test, Mann Whitney z test, Regression Analysis, Correlation Analysis and Factor Analysis. The results of these analysis and the hypotheses testing opened a new dimension in the study of mergers in the context of Indian manufacturing and service sectors. The results revealed that organizational culture, identification and commitment have a significant relationship with one another and that they do not exist in isolation. The Indian manufacturing sector was more inclined towards accepting and internalizing the changes in organizational culture than the service sector. Both the sectors revealed that organizational identification changed with the merger and did not contribute significantly towards the generation of organizational commitment. The study also looked into the impact of leadership, attrition and gender equality on identification and commitment. The researcher has been able to draw a few important conclusions that may contribute to the existing body of knowledge in the field of organizational identification and commitment. The study has been successful in reiterating the importance of people in organizations and recommends that organizations consider their employees not just as resources and assets but as partners in their business venture.