Loading...

Managing corporate identity in post merger integration

Master's Thesis 2003 240 Pages

Business economics - Business Management, Corporate Governance

Excerpt

Contents

I Abstract

III List of Figures

IV Abbreviations

1 Introduction
1.1 Corporate Identity in the Information Society
1.2 The Merger Waves
1.3 Issue of this work
1.4 Goals and approach of this work
1.4.1 Goals
1.4.2 Approach

2 Scope and Definition of Terms
2.1 Corporate Identity
2.1.1 Fundamental Considerations about the Term Corporate Identity
2.1.2 The term 'Corporate Identity'
2.1.2.1 Dimensions
2.1.2.2 Instruments
2.1.2.3 Components
2.1.2.4 Characteristics and Delimitation
2.2 Mergers and Acquisitions
2.2.1 The term Mergers and Acquisitions
2.2.2 Merger Management
2.3 Integration success measurement
2.3.1 Solutions in science and literature
2.3.2 Summmig up explanations for differences in integration success
2.4 Summary and definition of terms for this work

3 Identity composition
3.1 Areas of conflict
3.2 Influencing components of corporate identity
3.2.1 Image
3.2.1.1 The term and concept
3.2.1.2 Organisational image
3.2.1.3 Effects of image
3.2.1.4 Composition of image
3.2.2 Corporate Culture
3.2.2.1 The term and concept
3.2.2.2 National and organisational culture
3.2.2.3 Effects of Culture
3.2.2.4 Composition of organisational culture
3.2.3 Corporate Personality
3.2.3.1 Function of strategy
3.2.3.2 Vision and goals
3.2.3.3 Values and principles

4 Managing CI-related interventions during integration
4.1 Areas of Conflict
4.2 Programme management
4.2.1 Programme organisation
4.2.2 Team staffing
4.2.3 Integration speed
4.2.4 Programme flow
4.2.5 Programme controlling and integration audit
4.3 Instruments to intervene
4.3.1 Corporate Behaviour
4.3.1.1 Elements
4.3.1.2 Internal
4.3.1.3 External
4.3.2 Corporate Communication
4.3.2.1 Elements
4.3.2.2 Internal
4.3.2.3 External
4.3.3 Corporate Design
4.3.3.1 Elements
4.3.3.2 Internal
4.3.3.3 External
4.4 Preliminary examinations and measurement of effects
4.4.1 Problems
4.4.2 Methodical approaches
4.4.3 Instruments
4.4.3.1 Preliminary examination and assessment
4.4.3.2 Evaluation and continuous measurement
4.5 Summary: Implications for the procedure model

5 Case studies
5.1 Deutsche Telekom Group
5.1.1 Initial Situation
5.1.2 Corporate Identity and Integration Management
5.1.2.1 Corporate Culture
5.1.2.2 Corporate Image
5.1.2.3 Corporate Personality
5.1.3 Project management and interventions
5.1.3.1 Corporate Behaviour
5.1.3.2 Corporate Communication
5.1.3.3 Corporate Design
5.1.4 Assessment of the Integration Process
5.2 Vodafone
5.2.1 Initial Situation
5.2.2 Corporate Identity and Integration Management
5.2.2.1 Corporate Culture
5.2.2.2 Corporate Image
5.2.2.3 Corporate Personality
5.2.3 Project Management and interventions
5.2.3.1 Corporate Behaviour
5.2.3.2 Corporate Communication
5.2.3.3 Corporate Design
5.2.4 Assessment of the Integration Process

6 Discussion and Conclusions
6.1 Discussion
6.2 Conclusions
6.3 Managing Corporate Identity in Post Merger Integration
6.4 Further Research

V Bibliography

VI Appendix

I Abstract

When corporations are merging a tendency towards standardisation of organisations, processes and systems arises. Mergers of companies also lead to a concentration of increasingly larger trusts and holdings. Still the corporation is supposed to remain unmistakable and unique in order to preserve its attractiveness for customers, employees, suppliers, investors, in short, for a network of stakeholders. Only corporate identity (CI) has the efficiency range required to address and reach all these groups whose needs have to be considered.

This present work examines the concept of corporate identity, its application in the corporate environment, and the opportunities for the targeted and strategic steering under the background of mergers and acquisitions. The goal is to develop a concept and an approach how to start working on corporate identity and to set interventions during the postmerger process to support a successful integration.

For the reasons of the different meanings and the different understanding of the terms 'Corporate Identity' and 'Mergers & Acquisitions' (M&A) the present work develops both a structural model for the analysis of the individual components of corporate identity and a phase model for the configuration of integration. Based on this analysis the contexts of effects between and the opportunities for influencing the individual dimensions of CI are proven within the scope of postmerger integration (PMI), and instruments for the targeted impact and steering are represented. The validity of the elaborated approach of CI management within the framework of PMI is examined within the frame of two case studies of the two largest telecommunication companies presently operating in Germany. Activities are deducted from the results of the secondary analysis and from the empirical studies and are summarised in terms of a CI-oriented model of procedure for postmerger integration optimised for success.

III List of Figures

Fig.1 World-wide M&A transaction volume in billions US-$

Fig.2 Merger waves and strategic trends

Fig.3 Research approach

Fig.4 Systematisation of the term Identity

Fig.5 Comparison of Identity, Culture and Image

Fig.6 M&A typology

Fig.7 M&A process structure

Fig.8 Integration approaches

Fig.9 Weighed success factors in the entire merger process

Fig.10 Integration management's seven critical success factors

Fig.11 The 7 C-model of postmerger management

Fig.12 Effects of Corporate Identity

Fig.13 Image, image owner and image object

Fig.14 The corporate - publics relationship

Fig.15 Hofstede's onion model of organisational culture

Fig.16 Preferred types of adaptation process

Fig.17 Corporate Personality framework

Fig.18 Programme organisation

Fig.19 The Integration Balanced Scorecard

Fig.20 Employee tasks framework

Fig.21 External integration as a postmerger supply chain management

Fig.22 Strategic Communication framework

Fig.23 Integrated Communication framework (communication concept)

Fig.24 Polarity profile (example)

Fig.25 Gathering of perceptible object characteristics (example)

Fig.26 Deutsche Telekom selected results 2002

Fig.27 Deutsche Telekom's 4-pillar model

Fig.28 Deutsche Telekom's brand map

Fig.29 Target Orientation of Implementation Tools at T-Systems

Fig.30 Roadmap T-Mobile - One Company

Fig.31 T-Mobile's Re-branding campaigns in USA and Netherlands

Fig.32 The "Magentamorphose"

Fig.33 Vodafone Group Results 2002

Fig.34 Vodafone Group organisation structure

Fig.35 Vodafone's "Hello" campaign

Fig.36 Change of the D2 brand caused by the merger

Fig.37 Change of the Omnitel brand caused by the merger

Fig.38 Change of the Telecel brand caused by the merger

Fig.39 Integration' possible starting points

Fig.40 Roadmap for the CI oriented postmerger management

IV Abbreviations

illustration not visible in this excerpt

1 Introduction

1.1 Corporate Identity in the Information Society

Major changes are occurring, moving society beyond the industrial era. Those changes will become more extensive and proceed more rapidly than most former changes in economies and societies. The subject 'Information Society' could be a dissertation of its own; so the author just wants to give an very short introduction of the main ideas because they are necessary background before going deeper into the main topic.

A new type of society is emerging that has been called the Information Society because its goal is to produce and exchange information. Two main factors are influencing its development: digital technology and the globalisation. Digital technology's development and spread enable the easy and ubiquitous exchanging of information. This Information Society is transforming the workplace, but also human relations and has huge impacts on people lives. Economy has always been international, but what is new is that this economy is managed as a unit around the planet in 'real time'.[1] But as markets globalise there is a growing need for international managers for standardisation in organisational design, systems and procedures. They have to adapt their organisation to the local characteristics of the market, the socio-political system, the cultural system and so on. This balance between consistency and adaptation facing international managers is known as 'Glocalisation'.[2]

There is no widely agreed upon definition of 'Globalisation', nor a unified body of theory on this phenomenon. The definition of globalisation as the intensification of economic, political, social and cultural relations across borders seems a good basis for explanation of this trend.[3] The influence of trans-national companies is increasing with the concomitant homogenisation of markets. A truly global market is emerging which origins are to be found in the strong growth witnessed over the last two decades in the fields of telephony and, more recently, by the rapid development of data networks, especially the internet, which is set to take an increasing share of international traffic in the years ahead. About a hundred countries are now connected to the internet. At the last count there were about 126 million internet hosts world-wide, and it is estimated that there are 649 million internet users by March 2003[4]. These developments mean that not only communications are becoming a global commercial activity but are also supporting the globalisation and networking of economic activities.

The questions occur: Does the management and creation of corporate identity make sense in this context? And if, so what does it mean it? Castells (2001) says: "In a world of global flows of wealth, power, and images, the search for identity - collective or individual, ascribed or constructed - becomes the fundamental source of social meaning." [5] So it seems more necessary than ever to discuss the concept of corporate identity with this background.

1.2 The Merger Waves

The relevance of the M&A topic did not really decrease despite clearly shrinking transaction numbers in consequence of the volumes in the previous year and the intermediate clear cooling, relating to market conditions exploded formally, also in 2001:[6]

Fig.1 World-wide M&A transaction volume in billions US-$

illustration not visible in this excerpt

Source: Thomson Financial http://www.mergers-and-acquisitions.de

With the hostile take-over of Vodafone and Mannesmann a new chapter in industrial history was broken open in Germany. By the stock swap models no more limitations are set for the size of the transactions. The TIMES[a] sector in particular became the most important driver of the current M&A wave. Waves of enterprise transactions can be observed since the beginning of the 20th century. All waves emerged due to very different strategic motivations with very specific integration demands (fig. II). In the middle of the nineties a fifth, world-wide wave can be observed. This wave is characterised by global and boundless enterprise-, competition- and communication systems and various trends, e.g. globalisation, hostile take-over, Europe as focus market and new Economy overhauling old Economy.[7]

Fig.2 Merger waves and strategic trends

illustration not visible in this excerpt

Source: http://www.mergers-and-acquisitions.de

The merger of companies’ leads to a concentration of increasingly larger trusts and holdings some of them acting as organisational and financial merger only. The general conditions for economics are changing: The competition is getting stronger - due to globalisation this is happening world-wide. Products have become exchangeable. R. Sommer (2002), former CEO of Deutsche Telekom Group stated "The competition of the future will be a contest of brands"[8]. In the increasing globalisation of enterprises the individual organisations put ever more effort into distinguishing themselves from their competitors, to win market shares, and to articulate the new trend. Competition is becoming more and more a battle between brands rather than between products. Because enterprises are within the group of the leading competitors of their actual market segment if they are capable to “[...] suggest through their appearance what distinguishes them from their competitors." (Hinterhuber, 1997, p260)

In contrast to this the individual areas of companies hardly have anything left in common; divisions and departments are living their own lives, are creating subcultures, and are developing their own goals. These conflicting goals not only impair the internal workflow and co-ordination tasks but also affect the cohesion within the enterprise. Since the company has grown too complex and anonymous employees feel more obligated to their department than to the company. The pursuit for synergies breaks traditional structures. If employees enter an enterprise by way of a new merger they are not willing to give up their old identity – they remain strangers in their own company, and the 'we-feeling' gets lost.[9]

The rising number of investigations of the failure of mergers brought a new group of people into the centre of attention: the employees. Up to a few years ago enterprises typically considered only a single audience as actually important: the consumers. Nowadays, in times of interchangeable products, growing competition, and a public becoming increasingly critical it seems to have become essential to many enterprises to provide guidance and security to customers, suppliers, financiers, and also employees by means of an unique and unmistakable identity and distinguishing them from other companies. In addition there is a network of stakeholders whose needs have to be considered. Only corporate identity has the efficiency range, in order to reach all these groups with modified versions of the same message in each case.[10]

1.3 Issue of this work

The economic discussion about the phenomenon M&A in the past was strongly concerned with the question of the selection of suitable take over-candidates. In the past years publications increasingly refer to the process of the postmerger management which often concerns empirical investigations. The crucial problem with mergers is their success: The consideration of the negative experiences as well as an intensive strategic and organisational argument with all 'hard & soft factors' become success critical. Newest studies of the Institute for Mergers and Acquisitions (IMA) found out several reasons for the failure of mergers. Some are:[11]

- Insufficient premerger-management processes: Failed merger can already have their cause in an inconclusive strategic logic. Thus often success-crucial aspects remain undiscovered in the previous examination (due diligence).
- Missing customer perspective: The logic of fusion is still defined from the capital market perspective and surprisingly rarely from the customer perspective, which produces the enterprise results.
- Challenge of the postmerger management: The unification of enterprises with organisational structures and historically grown cultures becomes a challenge at the co-ordination, communication and personnel work.

A prerequisite for a deliberately induced process of change by a merger is that the future orientation the company will be based on it's determined by a uniform and holistic thinking of the managing boards, executives, and staff, too. In order to guarantee the coherence and consistency of company policy this holistic thinking needs to be expressed in a mutually agreed strategy for the particular activities. Many projects, activities and even concepts can be characterised as insular solutions. They are leaving the underlying central orientation: customer and employee orientation, and a widely ramified network of other stakeholders who have to be considered during integration. If so, how should (postmerger) integration process be designed for different stakeholders (internal, external), and how do they differ in terms of purpose (e.g., motivation, image creation, communication)?

1.4 Goals and approach of this work

1.4.1 Goals

The goal of this work is to develop an up-to-date 'integrated' postmerger management concept that places inward directed and the outward perceptible activities of the enterprise into a holistic context. The basic hypothesis is the positive effect of interventions to affect the factors of corporate culture and image in order to support a successful integration. Proceedings of practice are to be examined for their scientific founding with the objective to connect empirically supported theoretical findings with the experiences of practice in order to present an integrated concept for the treatment of the integration topic. The author’s intention is to examine the different influences on corporate identity during the transformation process in the context of mergers and acquisitions (M&A).

Through conducting literature research and personal interviews the goal is to develop a concept and an approach of how to start working on corporate identity and to set interventions during the postmerger process to support a successful integration. The existing interdependencies between the individual action fields are to be seized and from it approaches for the organisation of the integration transaction to be derived. Since the investigation can develop only in small extent on an already existing theoretical foundation in the total context, it concerns first of all development of a suitable reference framework for the analysis of the Corporate Identity topic in connection with M&A.

The argument course of the present work can be subdivided on the basis of this central questions into the following main issues:

- Analysis of the composition of corporate identity (internal and external aspects)
- Analysis of coherency between identity, culture and image
- Analysis of the composition and approach of (Post) Merger Management
- Provision of recommendations that will cover the internal and external aspects of integration with special focus on 'soft factors'
- Development of a model of procedure

In the context of this dissertation the task is to provide background information about business specifics of corporate identity and integration management. The focus of this work will be on the configuration of integration by the acquiring enterprise and will be outlined from the perspective of management and owners. This work focuses on the needs of integration of very large enterprises which are (becoming) global players. Priority will be given in general to measures being deployable across different functional areas/ divisions. Special functions, such as, for example HR department, sales or procurement, will be considered only if appropriate. Likewise, issues regarding individual questions of controlling, financing, legal outline of transaction, a.s.o. will not be discussed in order to stay within the scope of this work. They will be mentioned only whenever it is necessary to exemplify the overall context of this work.

1.4.2 Approach

Subsequent to the introduction the second chapter will cover fundamental terms used in the topics 'corporate identity' and 'mergers and acquisitions'. Furthermore the foundations of these areas relevant to this work will be explained as well as the boundaries of this subject matter. To allow conclusions on the deployment of the methods of choice in a postmerger-integration process the connections between premerger and postmerger phases will be clarified. Currently, a multitude of studies have been realised in order to control and analyse the success of mergers. Therefore the chapter will conclude with an inspection of factors critical to success and the current state of these topics.

The third chapter will describe the influencing components of corporate identity. With the aid of the structure model having been developed the components identified to be relevant will be explained: Corporate culture and corporate image. They form the effective dimension of CI. In essence this chapter will prove and represent the contexts of effects and the possibilities of influence of the single dimension of CI. After this, the concept of corporate personality will be exemplified because both of these aspects 'components' and 'instruments' can be found here (according to the definition of ‘components’ and ‘instruments’ developed in this work). Based on this foundation in the next chapter methods of configuring CI will be derived that systematically support the realisation of the mergers objectives.

The fourth chapter will give an overview of project management with regard to an efficient organisation of CI management. The factors of scope described here should influence all intervention instruments of a corporate identity, the corporate behaviour (CB), corporate communications (CC), and corporate design (CD). The selected measurement instruments for analysis and assessment will be presented and their relevance to the configuration of a CI will be analysed.

The instrument corporate behaviour, is “[...the] by far most important instrument of corporate identity...” which represents “...the conclusive behaviour of the corporations with its effects and consequences” (Birkgit/ Stadler/ Funck, 2000, p20)[12], thus claiming an ample part of this work. An additional focus of the examination is put on internal and external communications of companies manifesting themselves mostly through the instrument 'Corporate Communications'. Special attention is paid to the digital forms of communication one can find in the internet (external form) as well as in the intranet and by e-mails (internal form). Corporate design plays a vital role in the implementation and will be referred to for completeness. However it will not be studied in detail within the scope of this work. Some important aspects of design of an enterprise have to respect during implementation of corporate identity (for example, the concept of brand) will be mentioned and described in context to this work.

In chapter five this work will describe the management of a postmerger integration with accordance to the components and instruments of corporate identity as well as project management by means of two case studies of the two largest telecommunication companies operating at present in Germany (Deutsche Telekom, Bonn, and Vodafone, Newbury/ Düsseldorf). The examples have been chosen from the telecommunication branch since mergers gain increasing importance in this area, and all companies involved are representing the TIMES-branch. Furthermore, as market leaders within their branch they hold representative functions as role models and policy leaders. Interviews and corporate publications were the basis of reconstruction and evaluation the planning and the realisation of the corporate strategy. On the one hand the strategic planning of the enterprises is examined, on the other hand the CI activities having been initiated and put into practice at the time of the interviews. Summing up chapters 3 to 5 will point out the function of CI and the approaches of its management within the framework of PMI. All this factors will be summarised in a model of procedure. The methodical sequence of this work is shown in this overview:

Fig.3 Research approach

illustration not visible in this excerpt

Source: Own illustration

References:

2 Scope and Definition of Terms

Both in literature and practice the notions corporate identity and mergers & acquisitions are used in a variety of meanings and variably understanding of the correlated transactions. To begin with, this study will carry out a delimitation of these terms as precisely as possible. Then the definition of terms for this work will follow.

2.1 Corporate Identity

In literature the term 'corporate identity' is applied in a variety of meanings and depth. Also in practice an utmost non-uniform usage of this term can be observed which has been developed through different understandings as well as through changes in the definition of the term over time. Dimension and complexity range from the narrow definition as a design concept, over the understanding as a communication-/ marketing strategy, up to an understanding of the term as a synonym for a holistic concept for strategic corporate leadership. Therefore next to the sheer conceptual clarification the clarification of the basic term will include the depiction of the essential instruments and components.

2.1.1 Fundamental Considerations about the Term Corporate Identity

As a subject to scientific research corporate identity has evolved from a variety of areas: image research, operations research, Sociology of management, Economics, organisations, and industry, as well as economic science.[13]

The concept of (corporate) identity is based on a fundamental term that originates from scientific considerations in various disciplines of science, especially those of psychology and sociology.[14] While psychoanalysis and the Psychology of the individual primarily focus on the identity of the individual as subject of their research, Sociology and even political science deal with the group identity. This insight makes it possible for an individual to feel like a group member while still understanding him-/ herself as a unique individual.[15] The essential feature of the understanding of identity in social sciences is the limitation of conditions for uniformity to congruence in substantial attributes. Furthermore identity is featured by continuity[16], or, as Schmidt and Schischkoff (1982, p284)[17] described it: "...a real object does not remain identical with itself (…), it changes, becomes 'identoid'; just so is the 'identity of the consciousness of myself at different times' truthfully no identity but continuity or a development (...)".

In the understanding of social science the term of CI is left ajar to the understanding of 'Identity as Individual’ Erikson[18] defines that the feeling of personal identity is based on the immediate sense of ones own equality and continuity in time and the adjunctive perception that others realise this equality and continuity (reciprocity), too. This approach of explaining continuity and reciprocity can also be used for the creation of a group identity whereas the individually sensed continuity is transferred to those characteristics of a group that remain constant independent of changes of members. If a corporation is considered as a type of social group being connected by a common objective one can speak about a development of identity, too.[19] Since the social self is the interpretation of the environments reaction to the person even this external perception of the person by its environment contributes to identity. The perception of the self-image and the external image are mutually dependent. The identity of a person the more is all stronger the more un-contradicted all the features of the personality are towards the inside and out. For reasons of simplicity often only the self-image and the external image are mentioned.[20] Also, for the corporation as a whole the concept of an identity in analogy can make sense, if with it congruence between distinguishable different objects is expressed.[21] A substantial contribution to label the identity of a corporation is provided by the system theory. Systems[b] can formally be understood as identity which survives in a complex and changing environment by stabilising a differentiation between internal and external.[22] In a nutshell this means changes within a corporation itself as well as changes in its environment may lead to a change of identity, but this change is carried out very slow.[23]

Fig.4 Systematisation of the term Identity

illustration not visible in this excerpt

Source: Meffert, H. / Burmann, C./Koers, M. (2002)

If identity becomes a topic in economic science this frequently happens by presentation of models, target systems, and strategies within the framework of a corporate identity. Here priority is given to the aspects of ethical and moral values expressing fundamental philosophies to the major interest groups. For this, structures and potentials, decisions and actions of the corporation can be considered to be characteristics.[24]

2.1.2 The term 'Corporate Identity'

It is assumed that the origin of the term 'Corporate Identity' dates back to the fifties and roots in the American hemisphere when Walter Margulies embossed this particular term in order to differentiate his consulting agency from others who likewise created complex design programs.[25] Olins[c] (1995) assumes "...corporate identity as a term originally might [have been used] to revalue complex consulting oriented projects in opposite to exclusively design oriented works." Despite this claim often the term continued to be understood as a definition of design guidelines for forming a uniform appearance for the specific corporation.[26] Consequently graphical design and visual-configured projects have been seen as the only attributes of CI, being expressed in logos, fonts, colouring, a.s.o. In retrospect this term is nowadays applied to many even complex concepts[d] which have been put into practice far before its actual first use (impression), and is used in literature in this way.[27]

To describe the history of origin of CI Birkigt used a scheme of thought where development elements such as corporate philosophy, politics of image and marketing, design strategies, corporate communications, strategy, and others have contributed. He distinguishes four periods:[28]

- The traditional period is characterised by the personality of the corporate leader which, as a person, determinates the philosophy, identity, and behaviour of the corporation. Here, CI is rather unconsciously lived and formed.
- The brand focused period, in which the identity of the corporation almost equates with the identity of its (only) brand. It is characterised by a continuous, consistent character of all elements of configuration (wrapping, quality, brand a.s.o.) with the objective to win public trust into the brand. Here identity is formed consciously and definitely identifiable, but is limited to the appearance of the (top) brand.
- The design period is based on the remake of the products design which through this becomes the style and direction determining element of the corporation and eventually trespasses upon the entire forming of the appearance concept. The corporate identity becomes product related, rationally oriented, strongly profiled, and self contained. In its realisation this concept affects various areas of marketing, and the company’s behaviour facing resellers, media, a.s.o.
- The strategic period sees CI as an instrument of corporate politics that lead to a peculiar operational concept of CI and are available to corporate leadership as a strategic instrument for the market and social issues. CI as a market and social strategic instrument includes the social compatibility of the companies cause as well as a commitment to the environment.

2.1.2.1 Dimensions

Numerous different terms can be found in literature being utilised for the description of the range of validity and the function of corporate identity. Some of these terms cover the level of action, other the levels of impact and perception. Studying the different understandings corporate identity may represent an objective in one case, a sum of activities or their effects in another.[29] For example, CI may be placed over corporate philosophy, set equal to corporate philosophy, as well as being utilised as a base to formulate corporate philosophy.[30] It forms culture, contains culture, or is culture.[31]

In the following a strict distinction between instruments and components and definite denomination of the dimensions is chosen. This policy is oriented towards the specific purpose of the study and therefore detaches partially from other systematisation.[32] There by the author consciously accepts formal deficiencies of this simplification compared to a scientific typology for the benefit of a pragmatic strategy.

As instruments of corporate identity those parameters shall be understood that by specific action and handling will cause a change of the perceptible properties and features as desired in a corporate meaning. Depending on complexity and definition these instruments can be variably distinctive. They remain stable in their combination but are flexible in extend and distinction of their application.

In contrast there are the components of corporate identity, means the areas identity is composed from. They describe the fundamentals (in terms of perceptible and eventually ascertainable is-state) and the results (in terms of a striven target-state) of identity work. Consequently they represent the perceptible properties and features being influenced by instruments. Components have continuity but are dynamically. This means they can develop over time and may change their content. The goal of corporate identity is in this case to induce a consistent and controlled change.

2.1.2.2 Instruments

The structuring of the instruments is a differentiation called 'Identity Mix' ajar to the term 'Marketing Mix'.[33] This is connected to the fundamental thought that next to the textual arrangement within the discrete areas especially their focused tuning with each other can cause the effects aspired.[34] However the composition of the instruments can be arranged differently. In the following two[e] main streams are discussed closer in examples.

A structuring widely accepted in the German-speaking literature is given by Birkigt/ Stadler (1980): The corporate personality creates the dynamic core and the starting point of CI[f]. For its realisation the instruments behaviour (Corporate Behaviour), communication (Corporate Communication) and appearance (Corporate Design) are available.[35] As well the visual appearance and communicational statements of a corporation can be considered as belonging to its behaviour. Therefore the instruments are not MECE[g]. However the separation of instruments appears to be more important in practice since all areas count for the characteristic of CI thus illustrating the delimitation between pure design- or marketing approaches.[36]

Corporate behaviour (CB) is defined as the behaviour a corporation represents in various areas (for example, product offers, sale, information, social behaviour). It impresses the perception of thirds, acting constitutes identity. CB contains the entirety of acting which contributes to identity. It emerges from corporate culture or results from the attitude were it is both created planned and accidentally and arbitrarily.[37]

Corporate communication means the transmission of verbal-visual media bound messages of a transmitter to a receiver. With the means and measures deployed both tactical as well as conceptual-strategically effects in the meaning of manipulating perception and behaviour in the particular internal and external target groups can be aimed at.[38]

Corporate design (CD) describes the appearance of the corporation, generated by the uniform concur of a corporate specific configuration system of brand design, graphical design, product design, and architectural design. The appearance is supposed to personify continuity that is even in case of a change of a corporation it will require a new formulation synchronous to its identity. At this elements are for example typography, pictures, shapes, and colours.[39]

Olins defined four areas of activities of the identity mix whose effects vary with the degree of their control and the orientation of the corporation. Listed under orientation can be the branch (goal, purpose) and the kind of service delivered (production, service, a.s.o.) of the corporation. In cases of producing corporations for example the product itself is the most important parameter during creation and maintenance of the identity idea, while for the travel industry identity is dominated by environment. Often no specific character is associated with consumers goods; here the product is distinguished from the crowd by information and communication. Identity is created and influenced by information techniques of various kinds, especially by advertisements. In the service industry the behaviour of the employees is decisive for the perception of identity.[40] The relationship between the instruments will determine the identity of the corporation. The perception of impressions (image) by the target groups is achieved by the overall control. W. Olins (1989, pp29-31) defined instruments as followed:

- "Products / Services - what you make or sell
- Environments - where you make or sell it - the place or physical context
- Information- how you describe and publicise what you do
- Behaviour - how people within the organisation behave to each other and to outsides"[41]

This work is following the definition for the identity-mix given by Birkigt/ Stadler, since some of the aspects given by Olins in regard to products/ services and environment can also be found here. As argued before in times of progressing globalisation and virtualisation of sales systems the significance of products being an instrument according to Olins decreases in the massmarket and consumer sector.

2.1.2.3 Components

In the previous paragraphs components have been defined as fundamentals (characteristics and attributes) that are affected by CI instruments. They constitute the 'ideological platform' CI is rising from. If procedures, structures, processes, a.s.o. do represent the software of a corporation then they embody the (corporate) 'heartware', allowing the many voices of the corporation to develop and announce consistent messages of the corporate body.

Corporate Personality, Corporate Culture and Image describe the components being addressed by the instruments previously discussed. Corporate Personality[h] implies the self-understanding of the corporation in respect to (corporate) purpose, targets, macroeconomic function, and social role.[42] The corporation becomes defined as a historical person/ organisation whose previous activities created describable identity. This is the manifest 'Is-State', the starting position for all the corporations’ consideration pointing into the future: the sum of everything accomplished so far.[43] "A concept of identity can be created only when a self understanding has been discussed, formulated, and set in writing which contains guiding principle and corporate principles - based on attitude, values, norms, taboos, a.s.o”. (Herbst, 2002, online April 4th 2003).[44] These specify the 'Shall-Identity' of the corporation. The corporate personality, like a natural personality can pass through changes over time.

Analogous with the personality of human components of social systems such as corporations evade from objectifying, rationalising access from the outside. Only by means of certain phenomena they become to be known and revealed.[45] In holistic explorations these attributes such as manners, style of communication, a.s.o. may be analysed for their fundamentals, their values as an expression of the spiritual basis that determines activities and behaviour. As such they are at the same time a starting point for the further development or focused reconfiguration of the corporate personality the corporation.

Corporate Culture: The concept of organisational culture[i] originated from a criticism on the idea of completely rational purpose designed organisations. The competition on the world markets being intensified by the progressing internationalisation and above all the success of Japanese companies as a consequence thereof, caused doubts in the efficiency of tayloristic forms of the organisation of work and motivation. In search of new forms of management cultural factors again[j] became fashionable during the mid eighties.[46] Through the discovery of ‚soft factors’ it was hoped for mastering the problems of co-ordination and steering of corporate leadership in a better way.

Culture contains the entirety of values, traditions, legends, myths, norms, and mindsets predominating in the corporation that mediate sense and guidelines for behaviour to employees on all levels of responsibility.[47] Independent of the cultural perspective of various approaches it is possible to identify several fundamental elements that constitute organisational culture in general. Accordingly, the culture of an organisation can be described as:[48]

- Implicit phenomena moulding the self-understanding of an organisation.
- A continuously changing entity being subject to interpretation and further development over and over again
- A common orientation fostering coherent organisational acting
- A result of as well as means to social interaction manifesting itself in concrete issues and practices.

Culture has been observed with respect to it's concept that its omnipresence makes it difficult to usefully apply in specific situations. If it is everywhere, and pervades every aspect of organisational existence, then how can it be subject to analysis? Schein acknowledges that, even with rigorous study, only statements can be made about elements of culture not culture in its entirety.[49] A way to analyse the culture of an organisation is described by E. Schein (1995) who divides organisational culture into three levels.[50] This results in a first hint for a possible coverage based on the individual elements such as, for example, artefacts and exposed values, since the elements of the upper two levels represent rather conscious and partially visible peculiarities of the elements from the levels below and therefore depend on them. Since the instruments of CI and the aspect 'culture' are closely connected and very complex the cultural aspect will be elaborated in the next chapter.

Corporate Image means the entirety of visions with respect to an object, it can be understood as a system of values of impressions, that is subjectively rated, sensed peculiarities of factual (denotative) and emotional/ connotative properties.[51] Image describes the external appearance of the corporation; it is the projection of identity in the social field. It is an important target and result of entrepreneurial efforts.[52] Therefore both internal and external target groups of the corporation are addressed by image. Image may vary with different target groups and is a strongly moment related impression.[53] Besides the attributes of the image object (enterprise or brand) image always implies the attributes of the image carrier (employee) itself.[54] Here all instruments are taking influence in the perceptible peculiarities. Close connected to this is the concept of 'attitude' which will be covered as well as the aspect 'image' in chapter 3.

2.1.2.4 Characteristics and Delimitation

The demonstrated characteristics and elements of corporate personality, corporate culture, and image indicate a close relationship between the three components. In an overview the particular characteristics can be explained in respect to the respective contents, bearers, and origin.

Fig.5 Comparison of Identity, Culture and Image

illustration not visible in this excerpt

Source: E. Veser (1995) / own illustration

The confrontation of corporate personality, culture, and image affected for the purpose of this study is problematic in respect to the boundaries between corporate personality and culture since personality in its core does contain attributes of culture which therefore represents basically an element of it. When corporate culture and personality are contemplated next to each other in the following text it is done in order to give a clearer explanation of these dependencies. This will become relevant especially within the framework of strategic enterprise leadership and within the representation of the significance of management decisions for corporate personality as well as for culture. The component of corporate personality will be elaborated at the level of its elements (e.g. vision and principles) only.

2.2 Mergers and Acquisitions

In Anglo-Saxon literature the term “mergers and acquisitions” is used as a generic term for various types of corporate acquisitions, mergers, and joint ventures.[55] This is similar to practice whereby the transactions can be configured very differently. The following definition of the fundamental term contains the solely conceptual boundaries of the different forms on the one hand; on the other hand the performance economical connection of corporate mergers is represented as additionally attributed for classification. Finally the sequence of events of a merger is outlined, elaborating briefly on the particular phases, levels and steps of the process, and addressing the integration phase in more detail.

2.2.1 The term Mergers and Acquisitions

A multitude of transactions can be associated with M&A: purchase of corporations, sale, merger, alliances, co-operation's and joint ventures, founding corporations, going to the stock market / IPOs[l], conversions, restructuring, management buy-out and buy-in and successions.[56] Prevailing is the basic differentiation between co-operation's (often temporarily) and concentration of corporations which means a long term connection of at least two corporations.[57] Here fusion represents the closest form of merger since the participating companies are loosing their legal independence.[58] After the transaction has been administered, only a single legal unit remains. Acquisition is understood to be the purchase of ownership rights of a corporation or a separable sub-unit (in the meaning of firms) by transferring a majority of the company’s capital shares (share deal) or the entire or essential parts of the assets (asset deal) of the acquisition object by a corporation. As a consequence the purchaser attains the possibility of controlling power over the acquisition target without the object – having been legally independent before the transaction – has to lose its legal personality.[59][k]

In contrast to this are the different types of co-operation that describe the collaboration between at least two corporations. Here the participating corporations keep their economic and legal independence but they restrict their economical power of disposition (typically partial and temporary).[60] Summarising, the following classification of terms results:

Fig.6 M&A typology

illustration not visible in this excerpt

Source: According to Pausenberger (1989), Gerpott (1993), Picot (2000)

It shows a differentiation of these transactions in respect to essential attributes such as economic independence (power of control) and the duration of the relationship. The latter is considered to be relevant since the assessments to form the integration of concentrations might not be transferable to co-operation's. These will not be considered in this work.

2.2.2 Merger Management

Corporate acquisitions can be considered either as state/ static event that occurs with the formal transition of the property of the acquisition object to the purchaser (closing) or as a dynamic process ranging from the strategic foundation of a possible purchase of (parts of) corporations, over search for and selection of an object to the linking of the participating corporations after the formal conclusion of the acquisition.[61]

In this work the process oriented perception of M&A transactions is adopted with focus on the phase after the event of the formal transfer of property. Because of this the term transaction is used synonymously for the M&A process throughout this work. In early literature often the representation of two process phases can be found. The post merger phase was not considered accordingly. Also no significance was given to the topic of 'integration' during the first waves of mergers because due to the different strategic goals integration competence was not decisive for the success of the transaction.[62] Comparisons of the process models designed in the more recent literature imply an aggregated representation of three phases to be proper.[63]

Fig.7 M&A process structure

illustration not visible in this excerpt

Source: Own illustration

The premerger- (also: planning-) phase as a rule contains all preparing decisions and activities of the initiator. This includes e.g. the definition of targets, opportunities for financing, defining criteria for the eligibility of possible partners and identification of suitable target corporations, as well as a preliminary analysis and evaluation of candidates identified with the assistance of the search profile. It contains the preparation of a holistic time table and work plan for the transaction under particular consideration of the following two phases (realisation and implementation).[64]

In the second, actual merger- (also: realisation-) phase the first attempt to establish contact with a potential acquisition object takes place, which leads to the start of negotiations in a positive case.[m] The declaration of intent is documented in the 'letter of intent' (LOI). On this foundation (or pre-contract, if applicable) the various types of due diligence can be elaborated. The knowledge acquired here allows it to disclose risk possibly having been undetected so far and therefore influenced the success or failure of the transaction itself. They also make it possible to verify the determined value of the corporation. At the same time they give clues for the configuration of integration by checking the 'fit' of the corporations involved in terms of the targets aspired. Thus it serves early during planning and realisation of the transaction to get prepared for the measures necessary in the post-merger phase, and to develop adequate concepts for solutions in time.[65]

When settlement is obtained the contract of purchase is presented. After all legal, financial, and other questions are clarified a legally binding settlement is made: The completion of the contract. It becomes effective after so called deferring conditions have been passed, such as the agreement of the supervisory board, or the approval of an antitrust division. This step of the process ends with closing[n] taking place. [66]

With the successful completion of this agreement and the establishment of all prerequisites the post merger- (also: integration- or implementation-) phase begins. This phase contains the joining of two or more up to now independent systems. The central task for management is to unite the resources of the previously separate units in a manner that the strategic targets are met as well as founding of a new identity.[67] In particular preparing and planning activities, but also specific measures such as informative talks and workshops with corporate officers already can be performed at earlier stages of the process.[68] Nevertheless the majority of tasks do accumulate in the time past the legal unification because activities towards the realisation of unity and interference with the systems neither is possible nor expedient as long as the legally binding decision on the merger is missing.[69] With it this phase has a particular meaning in the merger process. It is the key to success for the transaction.[70]

The term 'integration' in general means a procedure through which creates a new comprehensive unit form mutually complementing parts. Gerpott (1993, p115), after analysing various scientific terms of integration, deducted the following definition:

- "The evolutionary process, mostly driven by the acquiring corporation (integration initiator),
- in which primarily through interactions (means of integration) of employees of the acquisition subject and object
- immaterial abilities/ know-how are influenced and transferred to the participating corporations (integration object) as well as
- changes in the usage of material resources are induced at least for the acquisition object (integration object II)
- in order to realise the potentials for increasing the total value of all corporations opened by the acquisition (integration target)."[71]

Consequently the integration of corporations has to be understood as the entirety of activities that contribute in joining the participating units or social systems, respectively, in order to let an economic unit arise. Integration in the proper meaning of the word is as a consequence of a long term process based on the interactions of the members of the participating corporations.[72] This process can be performed on three different levels:

- Procedural integration: Standardisation of the order of events and processes, e.g. accounting rules
- Physical integration: Joining of material and immaterial resources, e.g. consolidation of product lines, IT, knowledge management
- Managerial and socio-cultural integration: consolidation of management and corporate culture, e.g. strategy, harmonisation of the role model[73]

With this it is also the goal of the corporation to carry on pursuing its main purpose, the target group oriented and value creating transformation from input to output and consequently to guarantee the economic existence of the corporation. Thus the corporation is in inter-relations to its dynamic environment.[74] This requires a permanent tuning between the partners. It needs to be the goal of an external integration to tune the features of the enterprise with those of the environment.[75] Therefore integration can be defined as a common process of tuned co-ordination of decisions on various levels that gradually deviates in respect to its intensity and the asymmetry of the actors. Thereby an internal integration is happening on the levels strategy, operations, structures, resources, and culture, and, in parallel and biasing each other in two ways, there is an external integration of customers, suppliers, stock holders, and other stake holders.[76]

The strategic decision on the integration type

It is important to gain a common understanding on which the integration model is going to be deployed before the measures of integration are initiated. Only in this way can integration management be successful.[77] The ability to master the complexity that comes into being during the configuration of the process is the basis of this tuning and co-ordination. This complexity primarily is influenced by the environment and must be balanced by complexity reducing measures within the corporation. One way to do it is to set hierarchically targets for integration. On the other hand there is the possibility of reducing complexity by internal differentiation, means the creation of subsystems within the system corporation.[78]

The textual configuration of postmerger management is oriented on the goals pursued within the framework of the merger and the degree of complexity reduction.[o] Criteria for the configuration of integration can be strategic targets, initial situation, (e.g. branch, type of merger) and integration targets (e.g. type of integration).[79] While coming from the thought that joined M&A’s require a higher degree of integration it is assumed that in cases of conglomerate mergers the units are lead autonomously to a great extend.[80] For this a differently extent of integration of the material and immaterial resources is required. The decisions and actions have to be harmonised in order to reach the goal. With it the configuration task of harmonisation is moving within the field of tension between integration (in its meaning as unification) versus co-ordination (in the sense of tuning) what determines the depth of integration.[81] For this various methods of integration can be applied. Haspeslagh/ Jemison (1991, pp166-173) basically distinguish by

- "Necessity of strategic interdependency", defined by the type of added value in the new corporation (in the meaning procedural, physical and managerial and socio-cultural integration as described above), which leads to a softening of the boundaries of the original corporations, and the

- "Necessity of organisational autonomy”, defined by the factors of influence being decisive for the preservation of the competitive edge.[82]

Fig.8 Integration approaches

illustration not visible in this excerpt

Source: Haspeslagh/Jemison (1992) and Jansen, A.J. (2000)

Olins (1989, p78) defines three fundamental categories of corporate identity that can be associated with certain strategies of integration.[83]

- Monolithic: "Where the organisation has one name and visual style throughout'" Existing styles, methods of the acquired corporation are tuned to the standards of the acquiring corporation. This will have radical effects on the new organisation, both internally and externally.
- Endorsed: "Where the organisation has a group of activities/ companies which is endorsed with the group name and identity." It requires an accurately digested integration process in order to identify and co-ordinate the functions to be carried out together, and to state to what extend each part of the corporation will preserve its identity.
- Branded: "Where the company operates through a series of brands which may be unrelated either to each other or to the corporation." No substantial changes will result for the acquired corporation, issues of common interest are arranged, and style and name remain the same.

For the configuration of integration processes the factors demonstrated result in differences in the procedures as well as different depth and complexity of integration. In this work these various aspects of integration strategies and approaches are summarised under the term integration architecture.

2.3 Integration success measurement

Nationally or internationally, the top objective of a merger is increasing the value of the enterprise. All successive decisions are subordinate to this objective, and the success of a corporate merger is measured against it. The increase of value is preceded by different expectations in and objectives on the result of the transaction, e.g. the increase in market presence or in (cost-) synergies[p] in the areas of building up performance or market placement.[84] Corporate merger synergies should lead to a success of the combined corporations greater than the continuation of individuals would have score.

2.3.1 Solutions in science and literature

There is no universal convention on the definition and measurement of success of mergers. Following Haspeslagh/ Jemison[85], Cartwright/ Cooper[86] and Gerpott[87], it is possible to systematise the studies performed by means on how the success of the transaction becomes operational, under three aspects. Ideally, it can be differentiated between three types:

- Strategic-structural approach of explanation: a traditional approach[88], assessing the appropriate embedding of the acquisition into the strategy of the purchaser, into the market- and competition environment of the corporations as well as into the configuration of the premerger stage. It focuses attention on the rational systematic and reasoning of selection in acquisitions before closing. Here it is assumed that potentials of value added can be realised without any problems. This approach represents a very limited point of view and does not comply with state of the art research.

- Integration process approach: Here, the efficiency of the integration process of the merging corporations is examined. The fundamentals of value adding changes during the postmerger stage are predominantly considered to be in the interactions of the merging corporations and their employees. As examples of the observable of research the information programs or the allocation of responsibilities for decision making in management may serve. Therefore they represent clues for solving problems applicable to practice, however, without elaborating the context described before.
- Corporate culture approach: Emphasises the importance for success of corporate culture of the participating corporations. Previously valid attitudes towards values, norms, and behaviour patterns are questioned due to the transaction. The inspection of the transaction’s success is based on the management of differences of the corporate cultures. The aspects specified before usually are not considered seriously.

In the most recent literature and research all aspects demonstrated are considered in order to examine the success of acquisitions. Consequently a procedural point of view is used in the representation of merger management that, starting with the premerger stage, over the actual acquisition, to the post-merger stage strives for a holistic portrayal of the transaction.[89]

Subsequently, some proceeding approaches from various sources in research (A.T.Kearny/ IMA of University Witten/ Herdecke) and science in regard to success and failure of mergers will be presented.

Seven factors for a successful merger

In the years 1999/ 2000 A.T. Kearney conducted survey of 260 corporations (Fortune 500 corporations) that have been through an M&A transaction. (Global PMI Survey). 5 Main objectives were identified[90]:

- Growth of the parent firm (85%)
- Realisation of cost synergies (57%)
- Purchase of new technologies (52%)
- Attacking competition (21%)
- Gain tax benefits (12%)

Only 29% of the 230 corporations being interviewed did experience an improvement in shareholder returns. In 14% of all cases there was no change at all, and or 57% of the enterprises deterioration was observed. Altogether the rate of failure was determined to be above 50%. Actually, half of the alliances could be considered to have failed within a period of three to four years.

Within the winners ascertained, the 21% top performers postmerger, the shareholder return scored however was up to 25 % above branch average. Obviously, these corporations did master the challenges of a merger successfully. Research accounted for the successful corporations investing more time and energy into the careful planning of the merger and the proactive configuration of the PMI phase[91] (fig. IX).

Fig.9 Weighed success factors in the entire merger process

illustration not visible in this excerpt

Source: Presentation Dr. Hartmut Maaßen (2002); A.T. Kearney Global PMI Survey 1999/2000

In A.T. Kearney’s work seven factors critical for success in the integration phase were derived from this analysis (fig. X).

Fig.10 Integration management's seven critical success factors

illustration not visible in this excerptSource: Presentation Dr. Hartmut Maaßen (2002); A.T. Kearney Global PMI Survey 1999/2000

Considering the factors for success systematically and the aimed management of the post merger process are considered to be the basic prerequisites for a successful merger.

The 7 C-Model of Integration

Within the scope of a co-operative project between the Institute for Merger and Acquisition (IMA) of the University Witten/ Herdecke and the consulting firm Mercuri International in a comprehensive study the management of merger in Germany was analysed. How to assess exactly the success of mergers cannot be determined scientific adequately, because all methods employed so far to measure it show systematic weaknesses and take into account only quantitative criteria.[92] Therefore in the centre of the study performed in 1999 was the question: What are the factors for success, what are the major mistakes in merger management? Beside it above all the measurable development of success and the instruments of the integration management were in the foreground. Based on the 800 largest mergers in Germany (1994 – 1998, regression quote of almost 13%) altogether 103 transactions could be analysed. The following main objectives for mergers were detected[93]:

- Increase of market presence (70%)
- Cost synergies on the performance creating side (39%)
- Cost synergies on the marketing side (31%)
- Reduction of the horizontal competition, gain of new sales markets; completion/ addition of the range of services/ products. (22% at a time)
- Building an additional main pillar (21%)

According to Jansen and Körner (2000) in 44% of the cases a relative increase in turnover was achieved compared to the industry, and merely 21.5 % of the participants being quoted on the stock exchange succeeded to have a better development in stock prices compared to their industry. Despite the out-performance metrics investigated by a long term study (18 month at a minimum) they are only conditionally scientifically sound – such as the previous and less complex metrics of success of other studies. However they validate a trend.[94] Underlying this study was the 7 C-model. It has been the basis for all further considerations in the analysis of the IMA.

Fig.11 The 7 C-model of postmerger management

illustration not visible in this excerpt

Source: Jansen, Stephan A. / Körner, Klaus (2000)

Success factors have been identified from the group transactions having gone well to which a significant impact on the development of turnover and stock values is ascribed.

illustration not visible in this excerpt

Source: Source: Jansen, Stephan A. / Körner, Klaus (2000)

In summing up an insufficient integration of employees (31%), insufficient communication (strategy) (27%) and the poor planning of the integration process (including a too strongly centralised co-ordination) (19% each) are to the most grave mistakes.[95]

2.3.2 Summing up explanations for differences in integration success

The question for success factors has gained an outstanding significance. Numerous criteria are discussed in the literature. Depending on the type of inquiry it is distinguished between quantitative-objective success criteria (e.g. profitability of turnover, changes in stock prices) and quantified perceptions of success being collected by interviewing people involved (e.g. managers, employees, or external experts). Besides direct surveys success can be measured indirectly too, by gathering quantifiable reactions or perceptions of employees as social indicators (e.g. employees satisfaction or fluctuation rates). [96] Despite their relevance for success the soft factors in mergers and acquisitions are still getting neglected.[97]

In the following some of the most essential factors related to success will be discussed in more detail.

Culture

It is noticeable that the success factor culture as a entire complex is given little importance while particular aspects of behaviour or communication rate highly. However, in regard to the most severe mistakes in the configuration of the integration process culture was rated highly and it was attested to have significance.[98] Differing cultures and corporate identities in regard to customer orientation, management policies, etc. need to be brought into line with one another. Predominantly it was tried to transfer the own culture onto the acquisition partner rather than letting the cultures merge.[99] A possible explanation for this could be that culture is suspected to be a general source for mistakes leading to failure but still is not given any higher significance for this reason within the merger process.

Communication

Hardly any other aspect within the descriptive literature on integration configuration receives as much attention as the improvement of the acquisitions success in communication programs.[100] Communication as means of reducing the barriers between the partner corporations is considered to be insufficient in most of the cases. In this context there is an interesting result: Only 33 percent of the internal publications create proximity to the employee as an analysis of 50 employee newspapers from companies with more than 500 employees’ shows to.[101] Only one third of all employee publications carry the corporate identity of their own firm. Especially neglected are corporate objectives, strategies, corporate culture, organisational changes and perspectives, corporate principles and guidelines in practice, personnel programs, further training, carrier opportunities, corporate problems, suggestions, letters to the editor, actual development, and opinions on orientation. [102]

There is good empirical evidence for the importance of satisfying the information needs of employees in a successful merger management. Insufficient information leads to negative reactions of employees, for example stress and uncertainty. Unproductive behaviour is generated if employees caused by the lack of information are attempting to gather information through various channels and thus are neglecting the actual work activities.[103] The analysis of literature definitely leads to the conclusion that as early as possible a mediation of information has to be strived for. It depends on the particular situation though whether this should take place in the preparation phase or not until closure.

Employee management and selection

Often employee reactions are gathered as social indicators for success of acquisitions. Here mergers show both positive and negative impacts on the employees of the participating corporations. Objective is to relieve the negative and to foster the positive employee related consequences during the integration phase.[104] The selection and nomination of a new top management as well as the unequivocal assignment of management responsibility should take place very swiftly following objective criteria. Know-how transfer and -generation should be ensured very carefully. Know-how transfer is understood to be the transfer of existing abilities, know-how generation is the development of new know-how from the existing knowledge components. Both represent important sub objectives of mergers and do contribute to the value added of the new corporation.[105] A basic prerequisite for the exchange of existing knowledge is that the relevant carriers of know-how are identified and kept, and that information is actually exchanged. Generation of know-how requires different know-how in the corporation since only by means of combination new know-how can accrue.[106]

External aspects

Remarkably few references to the external aspects of integration could be found in the itemised analyses. Although synergy under the aspects of the increase of market presence is an objective striven for its realisation or the integration of external stakeholders such as customers and suppliers is not mentioned. Likewise the topics of ‘design’ and ‘branding’ were hardly found. From this two conclusions can be drawn: Either corporations take these topics for granted and do master them successfully in integration or only slight relevance for the integration success is ascribed to them.

In the end the success of the transaction, for sure will always be expressed in hard, measurable numbers which serve to secure the survivability of the corporation on the market. The survey of insights in the existing scientific literature however demonstrates the central significance of so-called soft factors such as communication, trust, and corporate culture.[107] Therefore they need to be considered as critical success factors which have to be contemplated within the scope of an integration configuration and a transaction retrospect.

2.4 Summary and definition of terms for this work

Very general CI can be understood to be the self understanding and self representation of a corporation. It is formed as the constant delimitation of an organisation from the external and the peculiarity of essential, characteristic orientations internally. It is constituted in three dimensions and uses three instruments to form them. Corporate Culture and its values are the basis for corporate personality. The latter consists of the strategy and goals as well as the vision and principles. Altogether they form the framework for design, communication, and behaviour which, being instruments to the mediation of corporate identity, shall lead to the adaptation of corporate personality, corporate culture, and corporate image. In this work the main attention is on the configuration of aspects of integration processes in conjunction with this three components. Every time activities preparing the configuration of integration in a preceding phase of transaction it will be referenced to in order to accomplish a holistic and systematic representation. Also under the aspects of integration it seems to be important to try to get to the bottom of so called 'soft factors', and to highlight their role in the merger process.

Often publications hold soft factors responsible for the frequently low success rate of mergers and acquisitions while it is in general unknown what lies behind these terms. In consequence, with the growing number of publications on the effect critical to success of soft factors the number of interpretations increases what kind of factors belong to this category. In this work the following definition for the difference of ‘soft’ vs. ‘hard’ factors is called on:

- Soft factors: Phenomena are becoming effective within a person and between persons, consisting of emotional, cognitive, and conative components. They are experienced and perceived subjectively as well as collectively by all individuals present in the situation and can be measured and quantified applying methods of psychological diagnostics and indicators.
- Hard factors: Objective, directly apprehended and/ or quantifiable states or processes.

The author takes the point of view, also represented by Gerpott[108], that the strategic main objective of a transaction in essence is always aimed towards the gain of 'hard' successes, such as cost reduction, increase of market share, turnover and stock prices. To accomplish this goal the consideration of the so-called soft factors is indispensable. They represent milestones on the way to a successful integration. Here it can be assumed that an identity can be allocated to any corporation. However, there will be differences in the way of conscious or unconscious configuration and the handling of it.

In this work corporate identity is understood as follows: 'Corporate identity is the goal and the process of developing a strategically planned and operational realised self understanding, self representation, and behaviour of a corporation both internally and externally.' Here it is assumed that the dynamic core of identity (the corporate personality) and its constituting components not only are changeable over time but mandatory must change and will change in order to comply with the changing conditions of the environment. In a holistic corporate identity strategy measures for the instruments relevant to identity behaviour, communication and design are planned and developed on the basis of a target positioning and in tune with the corporate strategy in order to create a consistent and self contained corporate identity within all relevant groups referred to.[109] CI as a leading strategy for entrepreneurial and all communicative measures bales the single measures and focuses them towards interaction, making synergy and learning effects possible. Consequently CI has two terms of reference:[110]

- Configuration of identity: includes the systematic analysis and configuration of the elements. It mainly relates to the dimensions corporate personality, culture, and image which are perceptible in their entirety only.
- Mediation of Identity: The mediation of corporate personality, the self understanding, with the assistance of the perceptible instruments of the CI-mix. Thus an internal and external image rises which is supposed to have influence on existing expectation of identity.

The differences within the integration architecture lead to the various task formulations for the instruments of identity configuration. The key difference between statutory mergers and full acquisitions lies in the fact that a new legal entity is established in the former case, but not in the latter. These two forms, however, may otherwise be treated as identical for this work. Similarly, the terms 'acquisition', 'merger' or even 'transaction' are used synonymous. The legal form of the acquisition subjects is considered to be at a lower lever in this work. For companies quoted on the stock market though there are some particularities in communication which will be elaborated at a more suitable juncture.

Restricting, it should be noted here already that the approaches elaborated do not represent patent remedies but only possible models on how to proceed, leaning against the criteria having been elaborated relevant to success.

References:

3 Identity composition

CI is the self-representation of a corporation to the inside and the outside, and connected with this the potential of imagination for the stakeholders. To this, each organisation needs a clear consciousness about its purpose in order to represent a scale for the emotion of „wanting to belong to“ or of delimitation. This means identity has to be more than a catchword, a logo, or a slogan, even if apprehension and visibility are counted within the essential features. CI must be liveable, too.

Essentially three levels of effect are relegated to corporate identity: internal effects, external effects, and superior effects.[cxi] In a corporate merger naturally it is a goal to create conditions that allow meeting the targets of the merger.

Fig.12 Effects of Corporate Identity

illustration not visible in this excerptSource: Own illustration

What aspects of corporate management will corporate identity support? A precondition for establishing CI is the realisation of management that CI plays a strategic role in all those activities of the corporation that serve its holistic positioning.[cxii]

This chapter essentially deals with representing the context of effects and the possibilities for influencing of the particular dimensions of CI. It is not the goal to contribute extensive scientific considerations or approaches of explanation for the various aspects, but rather to demonstrate the mechanism of effect, and, derived from this, to verify methods for the configuration of CI which support the realisation of the goal of a merger.

3.1 Areas of conflict

The configuration of CI requires the formulation of a CP that satisfies the actual and future demands of the corporation itself and of the environment, and their realisation within the corporation. While the demands describe the goals, values and norms aspired the culture, shaped by the past, contains all the attitudes towards values, norms and standards, action patterns, and symbols actually existing in the corporation. Hence a field of tension between the lived 'is-identity' and the striven 'shall-state' is given.

The mandatory influence of tradition can aggravate it to even consider the development of a new category of identity by management.[cxiii] Management as a part of corporate culture itself is formed by culture and this fact determines its preferences for future corporate development and strategies for its configuration.[cxiv] The more obvious the strategies pursued by management do harmonise with the perceptions and preferences funded in corporate personality and corporate culture, the sooner they might become a promoting force behind the implementation and – as far as this can be influenced by them - the realisation of a strategy. A disharmony on the other side can rise hard to access resistance against acceptance that may adulterate the intended strategies, or even make them fail. Therefore the effect of corporate culture on the implementation of strategies and integration processes can be placed within the field of tension between the poles 'supporting' and 'obstructing'.[cxv] In case of the conflicting relationship between culture and structure it is important to let the planners realise this state of affairs in its full extend. Realistic consequences from this insight range from withdrawal from the progressivism of the intended strategies to the cautious change in the meaning of focused cultural politics.[cxvi] A central goal of CI is to dissolve this field of tension by balancing the discrepancy between the is- and shall-state.[cxvii] Based of the congruities and deviations found one has to appeal on the is-state with assistance from the shall-state. This adjustment of wishful thinking and reality creates a frame for orientation that needs to be configured. Such instruments will be described subsequently.

3.2 Influencing components of corporate identity

The following model takes into account all aspects of identity having been identified to be relevant and will order them into operational dimensions. With the aid of the model it can be structured and causal connections can be recognised. The interdependencies of the means of perception and effects of the various aspects become comprehensible and their networking and rating becomes clear. Thus it renders possible a subdivision of the CI development into separate, manageable, and easy to work on steps.[17] First the concepts of image and culture will be contemplated. Then the concept of corporate personality will be represented since in it (according to the definition of the terms 'components' and 'instruments' used in this work) both aspects are depicted and the transition from the effect dimension to the configuration dimension is carried out.

3.2.1 Image

Image configuration is never intended for self-purpose by the corporation but always directed to behaviour goals in circles of interest. An effect of bonding is expected which results from the aimed and planned manipulation of the corporate image, both externally on customers and suppliers and internally on employees.

Human behaviour is influenced by a multitude of factors. How these factors depend on each other, or which of them truly have an essential impact on certain behaviours respectively, is not well known. Since total models of behaviour are too complex for practical application one is limited to partial models with a central construct which is considered to be decisive for the effect of influencing.[cxviii] For the exploration and measurement of consumer behaviour the social science concept of attitude research has been established in the fields of consumer and advertising effect research.[cxix] The fundamental hypothesis hereby is: Attitudes (of today) are causing the behaviour of tomorrow.[cxx] The construct ‚attitude’ has its most important theoretical origin in social psychology.[cxxi] The term ‚image’ on the other hand is connected to economic psychology. Therefore image has taken a leading role as an object of research in the commercial market research.[cxxii]

3.2.1.1 The term and concept

Linguistically the term image origins from the Latin word imagio (picture, object related figurative representation).[18] In economic sciences the term was introduced for the first time in the fifties in the area of marketing research.[cxxiii] Like attitudes images are activity related, and more or less conscious judgements on an object by a person.[cxxiv] Therefore they are closely related to the term of attitudes. Attitudes are understood to be the learned and relatively stable readiness of a person to behave consistently positively or negatively towards an attitude object. Attitudes are interpreted to be a one-dimensional judgement over an object.[cxxv] This judgement is connected with cognitive activities that are leading to a structured position towards the object.[cxxvi] Attitudes are directed towards objects, persons, or situation and always are subjective. They are learned during the process of socialisation either through own experience or by transmittal of experiences by others.[cxxvii] Kroeber-Riel describes them as a formula where attitude results of motivation + (cognitive) judgement of an object).[cxxviii]Attitudes express the valuation based on knowledge, therefore based on objective and verifiable information (so called denotations). Image rather is an emotional picture based in imagination on associations and emotional assumptions (so called connotations).[cxxix]

The attitude model is of importance in case a person is able to distinguish a particular object from another within the same category based on objective characteristics.[cxxx] It is also relevant for measurement of the subjective meaning of a person about an object. The term image is frequently used in the literature of market psychology. It reproduces the subjective opinions and imaginations of an object. The subjective opinions include knowledge about the object as well as emotional assessments that determine the behaviour towards the object.[cxxxi] Consequently the image can be understood as a multidimensional attitude construct.[cxxxii] Beside the attributes of the image object it always contains attributes of the image carrier as well as the carriers’ environment, and the situation of the image carrier meeting the information about the image object, respectively. Furthermore, as a rule, an image bases only on the knowledge of single elements, structures, and characteristics of the image object. (fig. XIII)[cxxxiii]

Fig.13 Image, image owner and image object

illustration not visible in this excerpt

Source: E. Veser, (1995)

3.2.1.2 Organisational image

The term of corporate image represents a specification of the term image. It is viewed as an entirety of objective and subjective elements that form the image of an object within the object carrier.[cxxxiv] Many corporations, their products, their eligibility as an employer, are no better or worse than others. Therefore the assessment depends on the appearance the corporation is able to mediate inwards and outwards. If a corporation intends to remain an attractive proposition it needs to be able to mediate what exactly makes it different from its competitors.[cxxxv] Fusion and acquisitions demonstrate how intense the impact of company image may be. Then the imaginary potential gets very real dimensions if it is reflected in the brand value or in the 'goodwill'.[cxxxvi]

The corporate image can be understood as related to the moment in time, complex, integrated entirety of all objective knowledge and factual experiences as well as subjective imaginations, assessments, and expectations a distinguished person or group of persons of a certain enterprise has, and which influences the perception and with it essentially the behaviour of the image carrier or the image carriers, respectively.[cxxxvii]

Corporate image contains the integrated entirety of all objective and subjective contemplation a particular person has based on the attributes and peculiarities of attributes of the corporation he/ she has perceived.[cxxxviii] Consequently is not only represents a thinking model for science but a concrete property which a corporation needs to have in order to accomplish its goals in public.[cxxxix] To be considered as very relevant needs to be the fact of a corporation not only having an image but the various related individuals and groups have their specific image of the corporation which leads to an effect that influences or even determines behaviour.[cxl] External and internal publics interact with the corporation to form the total image picture. Corporate image is a composition of the perceptions and attitudes of all these publics. In order to assess the relevance of behaviour of corporate image for various reference groups attention has to be paid to the interaction across the parameters. Therefore it wouldn’t make sense to limit the considerations to actual or potential buyers only.[cxli]

Fig.14 The corporate - publics relationship

illustration not visible in this excerpt

Source: J.G. Gray (1986)

Next to the textual differentiation of corporate image a more extensive systematisation can be applied to the various elements of image. These are important especially for the deduction of image oriented goals and measures of corporate management. As essential elements the public as possible carrier of image and the image objects dominating at the time can be distinguished.

A way to distinguish image carriers is offered by summarising the groups of persons who are (potentially) in an interactive relationship with the corporation and, as so called stakeholders have an interest in or take part in it, respectively. Here, for example, it can be distinguished between a personnel market and a personnel image, a supply market and a supplier’s image, a sales market and a customer image, a financial market and an investor’s image. In addition, there are groups in the corporation’s close and larger environment having just a mediate interest in the corporation since they do not practice a direct exchange on the market with it.[cxlii] To build upon this an image oriented corporate leadership has to consider all these groups of image carriers appropriately. They form the external image of the corporation beneath which all image carriers external to the corporation can be summarised. Opposite to this is the own image of the corporation (corporate image) consisting on the image of the corporate members (employees, management). From it the self image of the corporation has to be distinguished which in the sense of an imagination of a shall-state immanently faces all other images.[cxliii] Within the scope of corporate image a differentiation into a supra-regional vs. local, or a macro vs. a micro image can be made. Especially international trust will need local acceptance at their particular locations.[cxliv]

In respect to image objects the corporate image can be organised into a system of super-, sub-, and equal-ordinate images that may influence each other. This includes brand image, product image, and branch image. From it the necessity for tuning as well as chances and risks of psychological (dis-) synergies from conscious or non-conscious image transfers result[19].[cxlv]

These elements of image are not independent from each other. The different cognition of the various image carriers have a substantial impact on the formation of person- or group related images. Thus investors (consciously and unconsciously) will put emphasis on different attributes to form an image than customers. For each of the image carriers (and groups) individual dominating characteristics exist which have to be detected and configured.

3.2.1.3 Effects of image

Image can be subdivided into three components that characterise the effect on the image carriers. Here a cognitive, an affective, and an intentional (conative, behavioural) component are distinguished. These factors are not independent from each other but form a conceptual foundation for the consistence theory explanation of attitude changes.[cxlvi] The cognitive component contains the reduction, simplification, and schematising of perceptions and imaginations of the image carrier into succinct structures. It serves to accomplish the variety and multitude of information and meanings available in the perceptible environment by selecting (putatively) unimportant information, and, at the same time, overemphasising the attributed and characteristics sensed to be essential. Combined with it are a tendency to simplify and a filtered apprehension of reality. The vast number of meanings and characteristics of complex objects is reduced to a simple image while a complicated rational judgement is avoided.[cxlvii] These assessing and simplifying patterns do support the capacity to act for people in an increasingly complex world by falling back to fixed categories and default values.[cxlviii] Consequently image rises under the pressure of efficient information processing. This results in the conclusion for image configuration that information is easier to process for people if the inner process of image generation already is anticipated, with other words, if information is offered in a pictured form.[cxlix]

The emotionally valuing dispute with the image object is called the affective component. Here a projective-adding identification takes place caused by the assignment of attributes from the own framework of values.[cl] Basis of the assessment that happens through the assignment of appropriate attributes to the image object is the existing individual and at each time relevant group specific system of values (rigidified and stored opinions) based on which the attributes are reflected and judged.[cli] The intentional component of the image contains the realisation of judged perceptions into certain preparedness for behaviour, or predisposition, respectively. This way the image obtains an influencing or determining effect on behaviour in the social field.[clii] In general it is assumed that the three components are in tune with and consistent with each other and therefore unity between thinking, feeling, and acting exists.[cliii] The construction of corporate images is developed through perceptual processes that are difficult to explain and just as difficult[20] to manipulate.[cliv] Image is a quality every corporation owns but cannot dispose of freely; it may create the preconditions for an image but the image itself is created in the minds of the public.

That implies various effects of the image on the corporation. The knowledge of the impact of image on the different reference groups as well as the possibility to purposeful manipulate them, represents an essential basis of information for the decisions of the corporation.[clv] From the knowledge of the actual corporate image clues and requirements oriented to reference groups can be derived. Special significance is given here to the effect of segmentation being part of the image concept which shows leadership a path of behaviour by providing image oriented roles.[clvi] Hand in hand with improved information basis for the planning tasks comes a reduction of risk.

Provided a characteristic image can be created and maintained on this basis this can lead to substantial effects on individualisation and differentiation. Here the image can create an additional psychological benefit which, depending on the peculiarity and intensity, may become a decisive advantage in competition and an attribute of profiling.[clvii] If this bond is stabilised by repeated interaction of the image carrier with the corporation it may be called loyalty to the company or business out of which results a bonding effect for the corporation, externally and internally.

3.2.1.4 Composition of image

The changeability of image forms an important basis for goal oriented public relations, whereas only a slow process of remodelling seems to be promising.[clviii] Over time images as well as attitudes are relatively stable therefore change can happen only over a long term.[clix] Johannsen (1974) defines image as a complex, in the beginning more dynamic, during its development increasingly rigidifying and stabilising but always impressionable multidimensional system. It is durable but by means of communication and psychology ascertainable entirety of objective and subjective attitudes, emotions, expectations, and knowledge about an object of a person or a group.[clx] In research on the field of changing attitudes numerous theoretical approaches have been developed[21]. Some are oriented cognitive, other rather focus on the emotional and motivational events, and yet others deal with influential communication and other factors of impact.[clxi] All approaches in common are the fundamental assumption of image being changeable and the provision of the explanation required for it. To this work the fundamental evidence of changeability is relevant which has been established sufficiently. Therefore a detailed discussion of the various scientific approaches can be omitted.

With regard to the image object corporation in principle all elements of its system have to be considered as being relevant. However a precondition is that these elements have to be perceptible by the potential target groups (image carrier). In this respect the external representation, means the behaviour, communication, and visual elements of configuration, has a special significance as an essential foundation for image creation.

Furthermore communication enables also making intended behaviour in the sense of goals perceptible. Since image is continuously updated by added information only the intended behaviour that matches with the actual behaviour becomes relevant. If perceived behaviour and goals communicated deviate strongly they will loose their impact on the image. As a consequence, next to the peculiarity of behaviour itself the consistency of perceived behaviour, actual behaviour, and communication influences the image.[clxii]

At this the type and extent of information transfer to the various reference groups is of importance, too. The individual measures act both to the outside on the external image of the corporation as well as inwards on the self image of the employees. Therefore the perception of image always is a dual process.[clxiii]

Consistent and uniform behaviour fosters the peculiarity of image. At this consistency does not need to relate to all attributes that should be formed evenly for all reference groups. Studies resulted in a number of five to a maximum of seven dimensions of image to be reasonable.[clxiv] Rather the at the time dominant attributes of image creation have to be determined for the various image carriers that especially influence and form the interactive relationship with the particular group. The impression of similarity already is generated by the consistency of the various behaviour patterns in respect to essential textual and formal peculiarities.[clxv]

Antonoff defines the process of image configuration as a planned task within the scope of strategic management. Based on the rather long term goals of corporate personality and the rather short term goals of the entrepreneurial process the imaginary values of the corporation are gathered. At this the impacts of the entrepreneurial environment are considered to the same extend as the entrepreneurial interests themselves. This way a collection of entrepreneurial qualities and values develops that becomes the foundation of image work.[clxvi] Image planning is strictly future oriented but also considers current values when important for the future of the corporation. Specifically this deals for example with relevant aspects of marketing (e.g. maintenance of existing markets and customer relationships, development of new customer segments) or with relevant aspect of personnel planning (e.g. employee motivation, loyalty, integration).[clxvii]

In social psychology image is addressed as an empirical measurable, through scientific methods ascertainable cases.[clxviii] On the basis of an image diagnosis and in tune with the strategic image targets the planning of the shall-image begins under consideration of behaviour oriented, communicational, and configurationally measures.[clxix] However the vast number of determinants described points out the limitation of an exact manipulation of image.

3.2.2 Corporate Culture

In management literature the thesis became popular that the quality of a corporation is caused by the way its employees learned to think, feel, and act. Corporate culture is a ‘soft’ holistic concept although it is expected to have ‘hard’ consequences.[clxx] With this concept and the concurrent discovery of soft factors problems in co-ordination and steering shall be solved within the corporate leadership. Also it is expected to contribute to solving the problems caused by the confrontation of to organisational cultures under the scope of mergers.[clxxi]

There are basically only two reasons for the desire to decipher the culture of a corporation: scientific (for outsiders in order to develop theories) and concrete questions (for insiders in order to resolve problems in management). From this different approaches result for the configuration to study culture as well as different point of views on the results.[clxxii] From a scientific view the quantitative-analytical strategy of organisational theory did not appear to be suitable to explain and analyse complex organisational procedures. It was expected from the approach of organisational culture to find better explanations of structures and processes in organisations beyond the rationalistic models.[clxxiii] The goal of the following elaboration is to demystify and make operable the term culture (does an organisation have a culture or is the operation a culture for PMI?) by demonstrating the possibilities for analysis and instruments of configuration. Before the concept of corporate culture is elaborated on in detail the underlying understanding of culture will be discussed briefly.

3.2.2.1 The term and concept

The term culture is not determined uniquely in literature. It is a theoretical construct playing an important role in anthropology, and for some time, in sociology, psychology, and in business economics.[clxxiv] In social sciences basically a dichotomy of the term culture can be observed. On one side culture is seen as a socio-cultural system. It is an integrated part of all social systems and is manifested in directly observable behaviour and results of behaviour such as language, habits, and customs.[clxxv] The tradition of this conception is followed for example by Hofstede.[clxxvi] The sources of the mental programming are in the social environment of humans such as family, school, or the workplace. Values constitute the core of culture that manifests itself, in addition, in rituals, heroes, and symbols. The symbols represent at this the most superficial manifestation of culture.[clxxvii] The process of forming culture, ajar to group theory, rises from a common learning experience by integration and assimilation to the external environment. Out of it result the common values, philosophies, and symbols leading to a network of common basic premises.[clxxviii]

On the other side there is the understanding of culture as a system of ideas into which the common values, norms, and believes are merged. Hereby culture is based on divided patterns of interpretation and does not represent a constant structure of norms and values. Culture cannot directly be observed in behaviour but has to be concluded from it. The analysis of culture enlightens sub-cultural processes within the corporation.[clxxix] According to C. Geertz culture is a man-made web of meanings and is expressed in social activities. In contrast to Hofstede culture is not a psychological system but a system of symbols, constituting the frame within which actions, events, and social processes can be described and understood.[clxxx] In summary, on one hand the subject can be considered as an objective access to culture, the so called functionalistic paradigm, and as a subjectivist means of approach on the other, the so called interpretative paradigm.

The concept of corporate culture is considered to be helpful in the analysis on corporate level as well as for a better understanding of internal procedures in the case of different (sub-)cultures of groups of employees meeting with each other.[clxxxi] Schein notices that the ability of a corporation to learn, change, and develop can only be preserved with a deep understanding of the processes of corporate culture.[clxxxii] The two approaches of culture outlined above form the basis for different directions in the research on organisational culture. The different perspectives of the resulting implications for the methodologies in research are continued in the analysis of cultural problems in international corporate mergers. Simplified the research of corporate culture differs into two directions, the functionalistic and the interpretative approach.

In the functionalistic[22] approach the organisational culture exists as a cultural subsystem next to the other subsystems of the overall system corporate organisation.[clxxxiii] The culture of an organisation is one of several organisational variables that can be configured by management with ease to the greatest possible extent.[clxxxiv] Accordingly culture is something the organisation has: under this conception corporations not only produce goods and services but culture, too which consist on various partial products. To recognise the culture of an organisation its visible manifestations and symptoms have to be perceived since from them conclusions on the invisible values and norms of an organisation can be made.[clxxxv] This often is expressed in the attempt to identify the dimension of the organisational culture, or certain types of culture.

[...]


[a] TIMES is the acronym for Telecommunication, Information, Media, Entertainment, Security

[b] Cp. definition in Gabler Wirtschaftslexikon (1991) Systems in themes of economy are understood to be concrete economical arrangements; in terms of business economics it is understood as a unit that allows the precise separation of internal and external influences as well as endogenous and exogenous effects.

[c] A different, extended perspective is given by the holistic approach of identity management. D. Heinrich, (1990; p 20) understands this as the systemic approach to secure competitiveness based on social innovations.

[d] Cp. the definition on CI in the ICIG statement (The Strathclyde Statement), appendix 1

[e] In opposite to this some representations can be found by some authors that combine the levels of instruments and components as defined for this work, and that treat all areas such as culture, market, behaviour, products, communication, and design within the scope of a holistic process model as instruments of the CI strategy. [Cp. e.g. Hinterhuber, H.H. (1999) Schmidt, K. (1994)]

[f] According to the definition used in this work the corporate personality does not represent an instrument but a component; consequently it will be further discussed under „components“.

[g] MECE = Mutually Exclusive Collectively Exhausting

[h] In opposite to this the term „corporate philosophy“ often is found in literature in a similar but more instrumentalised usage (as a system of guiding maxims) as „corporate personality“. [Cp. Ullrich (1977) in Schierenbeck, H. (2000) and Veser, E. (1995)]. With this it is rather similar to the term of „guiding principle“ as it should be understood in this work and will not be subject of discussion in the following.

[i] Besides the term 'organisational culture' the relevant literature uses the term of corporate culture synonymously, the latter being more popular in management literature. A clear separation of both terms is hardly possible.

[j] The term corporate culture or factory culture, respectively, was introduced to the discussion for the first time by already in 1951 by Jaques (Rosenstiel 1993, p8).

[k] The partition of the various concentration types is discussed in literature under the aspect of forming integration. Of the different types of merger being distinguished literature to the topic M&A attaches value especially to the differentiation by the product/ market areas of the corporations. Basically three types of mergers are distinguished: horizontal, vertical und lateral. Here, as a rule obtaining synergy effects are intended.(Cp. Pausenberger, E. also Schierenbeck, H., Gerpott, T.J., Picot, G.) The U.S. Federal Trade Commission distinguishes here five types of M&A: horizontal, vertical, product extension, market extension and unrelated transactions. In the partitioning chosen here the latter three types are all summarised under lateral transactions. In respect to the limitations resulting from the defined goals the possible relevance of the distinctions mentioned above for the configuration of integration activities will not be elaborated in the context of this work.

[l] IPO = Initial Public Offering

[m] Especially in case of stock operations the possibility exists to make a public offer for take-over directly to the stock holders, against the will of management (so-called hostile take-over). There is no legal regulation for this type of take-over in Germany while the Anglo-American corporate laws provide extensive although different regulations, e.g. 'City code on take-overs and mergers'. [Cp. Picot, G. (2000), Holzapfel, H.J. / Pöllath, R. (2001)]

[n] The term 'closing' comes from the Anglo-American practice of contracts and it is used in different ways. Most of the time it stands for the effective date of the transition but sometimes it is used to describe all the legal activities on this day being necessary for the transition of property to the purchaser after the price is paid. [Picot, G. (2000)]

[o] Methods for complexity reduction are one the one hand hierarchical, e.g. by implementing a multi-level process structure or on the other hand by subsystems, e.g. individual functional units are organising the integration process itself in tune with the total strategy.

[p] The term synergy means that through efficient co-operation of existing resources an additional benefit is created. Therefore the entirety is more that the algebraic sum of its part. This result is called synergy effect, or sometimes the „2+2=5“ effect.

[17] Here it needs to be pointed out that the proceedings here for sure are not free of culture but base on a western (German) understanding of management. The substitutability and effectiveness of individual measures as well as their configuration has to be reviewed under the background of possible international and intercultural aspects in each single case.

[18] According to E. Veser image represents an adoption of a term from the Anglo-American languages to the German language because no equivalent word is available in the German language.

[19] Caspar, M. (2002, in Meffert, H. / Burmann, C. / Koers, M.) describes: The term 'image transfer' labels the strived cognitive and emotional process of the transfer of associations and imagination in the minds of external and internal target groups.

[20] Substantially the perception of image components is influenced by four effects: 1)Halo Effect: Special attention is given to a single characteristic in order to judge the image object. It overshadows the entirety and leaves the other characteristics in the shadow of perception. 2) Projection: This deficit of perception occurs if caused by a selected characteristic a conclusion is made on another, unconnected characteristic. 3) Expectancy: Because of its membership to a certain class an object is judged by the common characteristics perceived and expected for objects in this class and not by its actual characteristics. 4) Perceptual Defence: The perceived object is compared with an arbitrarily and subjectively selected object and is placed together with it on the same level. The tendency to cling to that perception by shaping the things being seen and heard so as to be consistent with the personal beliefs. Cp. Antonoff, R. (1977) p19, also Bowditch, J.L./Buono, A.F. (1997) pp 66-67

[21] Learning effects produce changes of image. Further theoretical approaches can be organised into low-involvement (e.g. habituation) and high involvement theories (e.g. internalisation as well as consistent- and reactance theories).

[22] An extreme position within the functionalistic paradigm is represented by Peters/ Waterman, who consider corporate culture as a means to increase the productivity of the employees. Hidden behind this is the conception that some kind of ‘best practice’ of corporate culture exists for the corporation. Cp. Peters, T. J./ Waterman, R. H. (1984) p 336

[...]


[1] Living in an e-world, an information society for all? source: http://gguillotin.chez.tiscali.fr/digital_divide_and_information_society.htm (online April, 17th, 2003)

[2] Trompenaars, F. (1996) p 3

[3] Holm/ Sorenson, in Pugh, R./ Gould, N. (2000) cited in: http://gguillotin.chez.tiscali.fr/digital_divide_and_information_society.htm (online April, 17th, 2003)

[4] http://www.global-reach.biz/globstats/index.php3 (online April, 4th, 2002)

[5] Castells, M. (Interview 05/09/01) Conversations with History; Institute of International Studies, UC Berkeley http://globetrotter.berkeley.edu/people/Castells/castells-con5.html (online May, 7th, 2002)

[6] Institut for Mergers & Acquisitions, University of Witten-Herdecke
http://notesweb.uni-wh.de/wg/wiwi/wgwiwi.nsf/ContentByKey/SHES-58EK5M-DE-p (online April 2nd, 2002)

[7] Jansen, S.A. in Jansen, S. A. / Picot, G. / Schiereck, D. (2001) p 3

[8] Sommer, R. CEO Deutsche Telekom in "Die Welt" April 19th, 2002, quoted in http://intranet.telekom.de/presse/p_schau/020419a_presseschau_arch.htm (online May 6th, 2002)

[9] Herbst, D. http://www.vordenker.de/dherbst/cidentity.htm (online May, 12th 2002)

[10] Olins, W. (1995) p 10

[11] Cp. for this and the following: Jansen, S.A. / Müller-Stewens, G. in Frankfurter Allgemeine Zeitung, October 4th, 2000, p 49, issue 230; source: http://www.uni-wh.de/de/wiwi/lehrstuhle/ima/faz.htm?uni-wh (online May,6th, 2002)

[12] Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000), p 20

[13] Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) p 27

[14] Veser, E. (1995) p 20

[15] Veser, E. (1995) ibid.

[16] Meffert, H. / Burmann, C./Koers, M. (2002) p 42

[17] Schmidt, H. / Schischkoff, G. (1982) p 294

[18] Erikson, E. (1966) p 10 in: Kepper, G. (1990) p 5

[19] Kepper, G. (1990) p 5

[20] Meffert, H. / Burmann, C./Koers, M. (2002) pp 42-44

[21] Heinen, E. (1981) p 135

[22] Weber, J. (1985) p 64

[23] Veser, E. (1995) p 25

[24] Veser, E. (1995) p 23

[25] Olins, W. (1995) p 7

[26] Heinrich, D. (1990) p 22

[27] Olins, W. (1995) ; also Heinrich, D. (1990), Schmidt, K. (1994); Birkigt, K./Stadler, M.M. (2000)

[28] Cp. this et seqq: Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) p 33

[29] Kleinfeld, K. (1992) p 28

[30] Herbst, D. http://www.vordenker.de/dherbst/cidentity.htm (online May, 18th 2002)

[31] Cp. Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000), and Stahl, G.K. (2001), in contrast e.g. Schmidt, K. (1994), Schubbe, M.O. (1999)

[32] Cp. Kleinfeld, K. (1992)

[33] Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) p 19; cp. also Kepper, G. (1990), Kleinfeld, K. (1992), Schmidt, K. (1994)

[34] Wiechmann, U. (1988) p 16 in Veser, E. (1995) p 28

[35] Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) p 19

[36] Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) p 21

[37] Schmidt, K. (1994) p 228

[38] Cp. Schmidt, K. (1994) p 228, also Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) p21

[39] Cp. Schmidt, K. (1994) ibid., also Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) ibid.

[40] Olins, W. (1989) pp 29 following

[41] Olins, W. (1989) ibid.

[42] Cp. Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) and Olins, W. (1989)

[43] Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) p 19

[44] Herbst, D. http://www.vordenker.de/dherbst/cidentity.htm (online April, 4th 2003)

[45]Bickmann, R. (online May,19th 2002)
http://www.bickmann.de/cgi-bin/knowledge-base.pl?http://www.bickmann.de/knowledge-base/chance-ethics.htm

[46] Cp. Rosenstiel, L. von (1993) pp 8

[47] Hinterhuber, H.H. (1992) p 248

[48] Cp. Rosenstiel, L. von (1993) p 15

[49] Cp. Schein, E.H. (1995) p 35

[50] Cp. Schein, E.H. (1995) pp 30 - 34

[51] Meffert, H. / Burmann, C./Koers, M. (2002) p 235

[52] Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) p 23

[53] Olins, W. (1989) p 35

[54] Veser, E. (1995) p 35

[55] Eschenbach, R. (1997) p 17

[56] Picot, G. (2000) p15

[57] Pausenberger, E. (1989) pp 623

[58] Schierenbeck, H. (2001) pp 49 - 52

[59] Gerpott, T.J. (1993) p 22

[60] Cp. Schierenbeck, H., also Gerpott, T.J., Picot, G. Pausenberger E.

[61] Cp. Pausenberger E. (1989), p 621, and Gerpott, T.J. (1993) p 35

[62] Cp. Jansen, S. A. / Picot, G. / Schiereck, D. (2001), Müller-Stewens, G. (1992)

[63] Cp. thereto and further on Dabui, M. (1998), also Pausenberger, E. (1989), Müller-Stewens, G. (1999) Picot, G. (2000), Stahl, G.K. (2001), Jansen, S. A. / Picot, G. / Schiereck, D. (2001)

[64] Cp. Picot, G. (2000), Gerpott, T.J. (1993), Müller-Stewens, G. (1999)

[65] Picot, G. http://www.mergers-and-acquisitions.de/fazserie3.pdf

[66] Cp. Picot, G. (2000), Stahl, G.K. (2001), Müller-Stewens, G. (1999)

[67] Stahl, G.K. (2001) p 62

[68] Cp. Stahl, G.K. (2001), Deekeling, E. in Jansen, S. A. / Picot, G. / Schiereck, D. (2001),

[69] Grüter, H. (1990) in Dabui, M. (1998) p 23

[70] Haspeslagh, P.C. / Jemison, D.B. (1992) p 129

[71] Gerpott, T.J. (1993) p 115

[72] Jemison, D. (1988) pp 191-218

[73] Shrivastava P. (1986) in Stahl, G.K. (2001) p 62

[74] Bickmann, R. (1999) p 17

[75] Veser, E. (1994) pp 65 - 68

[76] Jansen, A.J. (2000) p 213

[77] Gerpott, T.J. (1993) p 119

[78] Veser, E. (1994) p 63

[79] Jansen, A.J. (2002) p 6, also Stahl, G.K. (2001) p 63

[80] Cp. Stahl, G.K. (2001) p 63,

[81] Veser, E. (1994) pp 65 - 68

[82] Haspeslagh, P.C. / Jemison, D.B. (1991) pp 166-173

[83] Cp. this et seqq. Olins, W. (1989) p 78

[84] Cp. Jansen, S.A./ Körner, K. (2000) p 6

[85] Cp. Haspeslagh, P.C./ Jemison, D.B. (1992) pp 292-301

[86] Cartwright, S./ Cooper, G. L. (1992) pp 4-5

[87] Gerpott, T. (1993) pp 4-5

[88] Cartwright, S./ Cooper, G. L. (1992) p 24

[89] Cp. Buono, A. F./ Bowditch, J. L. (1989); Jansen, S.A. (2000); Maaßen, H. (2002) et al.

[90] Cp. this et seqq. Maaßen, H. (A.T.Kearney) Presentation A.T. Kearney Global PMI Survey 1999/2000

[91] Presentation Dr. Hartmut Maaßen (2002); ibid

[92] Jansen, S. A. (1999) K3

[93] Cp. Jansen, S.A. / Körner, K. (2000) p 7

[94] Frankfurter Allgemeine Zeitung http://www.mergers-and-acquisitions.de/fazserie6.pdf

[95] Cp. Jansen, S. A. / Körner, K. (2000) ibid

[96] Cp. Gerpott, T.J. (1993); Jansen, S. A. / Picot, G. / Schiereck, D. (2001); Buono, A. F./ Bowditch, J. L. (1989) et. al.

[97] Cp. e.g. Jansen, S.A. (1998)

[98] Cp. Jansen, S.A. / Körner, K. (2000) pp10-11

[99] Maaßen, H. (A.T.Kearney) Presentation Dr. Hartmut Maaßen (2002); A.T. Kearney Global PMI Survey 1999/2000

[100] Gerpott, T.J. (1993) p 142

[101] Result of a study by the Munich PR-agency Keysselitz; in: Herbst, D. (online)

[102] Herbst, D. http://www.vordenker.de/dherbst/cidentity.htm

[103] Cp. Gut-Villa, C. (1997)

[104] Gut-Villa, C. (1997) p 117

[105] Gerpott, T.J. (1993) pp 90-103

[106] Haspeslagh, P.C. / Jemison, D.B. (1992) pp 166-173

[107] Cp. e.g. Buono, A. F./ Bowditch, J./ Lewis, J. W. (1985); Buono, A. F./ Bowditch, J. L. (1989); Cartwright, S./ Cooper, G. L. (1996)

[108] Cp. Gerpott, T.J. (1993) pp 62-65

[109] Schmidt, K. (1994) p 228

[110] Cp. this et seqq. Wiedmann, K.P. / Jugel, S. in Brammer, D. / Wache, T. (1993) pp 47-48

[cxi] Schubbe, M.O. (1999) p 23

[cxii] Birkigt, K. / Stadler, M.M. / Funck, H.J. (2000) p 55

[cxiii] Olins, W. (1989) p 78

[cxiv] Bleicher, K. in Dülfer, E. (1991) p117

[cxv] Bleicher, K. in Dülfer, E. (1991) p 119

[cxvi] Bleicher, K. in Dülfer, E. (1991) p 121

[cxvii] Brammer, D. / Wache, T. (1993) p 50

[cxviii] Schweiger, G. / Schrattenecker, G. (1986) p 68

[cxix] Cp. Schweiger, G. / Schrattenecker, G. (1986) p 68, also Kroeber-Riel, W. (1984) p 158

[cxx] Schweiger, G. / Schrattenecker, G. (1986) p 69

[cxxi] Huber, B. (1993) p 27

[cxxii] Kroeber-Riel, W. (1984) p 158

[cxxiii] Veser, E. (1994) p 36

[cxxiv] Huber, B. (1993) p 27

[cxxv] Schweiger, G. / Schrattenecker, G. (1986) p 69

[cxxvi] Kroeber-Riel, W. (1984) p 51

[cxxvii] Schweiger, G. / Schrattenecker, G. (1986) p 69

[cxxviii] Schweiger G. /Schrattenecker, G. (1984) p 70

[cxxix] Schweiger G. /Schrattenecker, G. (1984) ibid

[cxxx] Schweiger G. /Schrattenecker, G. (1984) ibid.

[cxxxi] Kroeber-Riel, W. (1984) p 190

[cxxxii] Kroeber-Riel, W. (1984) p 158

[cxxxiii] Veser, E. (1994) p 37

[cxxxiv] ibid. 41

[cxxxv] Hinterhuber, H.H. (1992) p 260

[cxxxvi] Antonoff, R. (1977) p 18

[cxxxvii] Henseler, R. (1977) p 431 in Veser, E. (1994) p 39

[cxxxviii] Veser, E. (1994) p 39

[cxxxix] Antonoff R. (1975) p15

[cxl] Veser, E. (1994) p 40

[cxli] Henseler, R. (1977) p 77 in Veser, E. (1994) p 40

[cxlii] Veser, E. (1994) p 43

[cxliii] Johannsen, U. (1974) in Veser, E. (1994) p 44

[cxliv] Bickmann, R. (1999) p 124

[cxlv] Mayer, A. (1987) in Veser, E. (1994) p 44

[cxlvi] Kroeber-Riel, W. (1984) p 190, also Veser, E. (1994) p 42; Trommsdorff, V. (2002) pp154-155

[cxlvii] Schweiger, G. / Schrattenecker, G. (1986) p 72, also Kroeber-Riel, W. (1984) p 190; Henseler, R. (1977) p 153

[cxlviii] Bickmann, R. (1999) p 116

[cxlix] Antonoff, R. (1977) 16

[cl] Henseler, R. (1977) p 51

[cli] Kroeber-Riel, W. (1984) p 159, also Veser, E. (1994) p 100

[clii] Henseler, R. (1977) p 51

[cliii] Kroeber-Riel, W. (1984) p 159

[cliv] Bickmann, R. (1999) p 118

[clv] Henseler, R. (1977) p 109

[clvi] Veser, E. (1994) p 102

[clvii] Veser, E. (1994) pp102-103

[clviii] Antonoff, R. (1977) p 18

[clix] Schweiger, G. / Schrattenecker, G. (1986) p 72

[clx] Veser, E. (1994) pp 36-37

[clxi] cp. Kroeber-Riel, W. (1984) p 159, also Trommssdorff, V. (2002), Antonoff, R. (1977) pp26-30

[clxii] Veser, E. (1994) pp 82-83

[clxiii] Bickmann, R. (1999) p 118

[clxiv] Huber, B. (1991) p 28

[clxv] Veser, E. (1994) p 86

[clxvi] Antonoff, R. (1977) pp 27-28

[clxvii] ibid., pp 31-32

[clxviii] Johannsen, U. (1974) in Veser, E. (1994) p 36

[clxix] Antonoff, R. (1977) p 59

[clxx] Hofstede, G. (2001) p 24

[clxxi] Holleis, W. (1987) pp 33

[clxxii] Cp. Schein, E.H. (1995) p 132

[clxxiii] Cp. Franzpötter, R. (1997) pp 12-13

[clxxiv] Staehle, W.H. (1991) p 465

[clxxv] Heene, R. (1994) pp 25

[clxxvi] Hofstede, G. (2001) p 4

[clxxvii] Ibid. pp 4-6

[clxxviii] Schein, E.H. (1995) p 62

[clxxix] Geertz, C. (1983) pp 9 and 21

[clxxx] ibid. pp 9 - 22

[clxxxi] Schein, E.H. (1995) p 10

[clxxxii] Schein, E.H. (1995) p10

[clxxxiii] Heinen, E. (1987) p 15 f

[clxxxiv] Sackmann, S.A. (1990) pp 155

[clxxxv] Cp. Franzpötter, R. (1997) p 24; also Smircich, L. (1983) p 344

Details

Pages
240
Year
2003
ISBN (eBook)
9783638288361
File size
1.6 MB
Language
English
Catalog Number
v26532
Institution / College
University of Applied Sciences Ludwigshafen – IMC-MBA
Grade
1,0 (A)
Tags
Managing

Author

Previous

Title: Managing corporate identity in post merger integration