Cultural factors of integration

Success factors that determine the success of the knowledge transfer process are the communities that make up the newly consolidated enterprise. The cultural factor of success is reduced to overcoming cultural differences that can undermine the actions taken to transfer knowledge. In particular, it is about breaking the inability to externalise the tacit knowledge and the possible mistrust of its transfer.

In the literature of the subject many definitions of organizational culture can be found. According to Strategor, the most appropriate definition was presented by E. Schein „[...] culture means all of the fundamental assumptions that a group has

invented, discovered and created, learning to solve problems of adaptation to the environment and internal integration [...]”⁹².

This is a very comprehensive definition, but it is not helpful in defining practical goals such as e.g. the role of culture in the merger process. The same author defines organizational culture as „an internal organizational subsystem that enables units to adapt to the environment”⁹³.

The definition of organizational culture was approached even more practically by A. Wojtowicz. According to her „organizational culture is a system of truly recognized and mutually interacting values and norms that determine behaviours, attitudes and decisions in an enterprise, and artificial creations of a given culture, the so-called artefacts”⁹⁴. For the purpose of this paper, we have adopted the definition of organizational culture by E. Morin⁹⁵ „Culture is a system that combines personal experiences of people and accumulated common knowledge, which is recorded and encoded and assimilated only by those who know this code and is also associated with the configuration allowing organisation and structuring of the existing relations, practices and images”. While previous explanations of what culture is were helpful in the strategic management process, the above are useful in the process of post-merger integration. The statement about knowledge acquisition by those who know this code seems particularly important. It follows that to successfully achieve knowledge transfer it is required to create a common code, i.e. a common culture. The further conclusion is that the sooner and deeper the development of a new, common culture or at least an inter-cultural agreement will take place, the easier it will be to transfer knowledge, mostly tacit one.

The second term that requires clarification is acculturation. The first to use this term were R. Redfield, R. Linton and M. Herskovitz⁹⁶, who defined acculturation as a change in the initial patterns of individuals or groups with different cultural background but remaining in constant and direct contact with themselves. According to T. Clark⁹⁷, acculturation is a function of cultural differences. In turn G. Hofside⁹⁸

92 E. Schein, Organizational culture and leadership, Jostly Bass, San Francisco 1958, in:

Strategor, Zarządzanie firmą, PWE, Warszawa 2001, s. 512.

93 Ibidem, p. 432.

94 A. Wojtowicz, Diagnozowanie kultury organizacyjnej w procesie zarządzania strategicznego, Uniwersytet Ekonomiczny w Krakowie, Kraków 2006, p. 3.

95 E. Morin, Socjologie, Fayard, Paris 1984.

96 R. Redfield, R. Linton, M. Herskovitz, Memorandum on the Study of acculturation,

“American Anthropologist” 1936, No. 38, in: A. Herdan (ed.), Mergers and acquisitions…, op.

cit., p. 92.

97 T. Clark, International human resource management. Perspectives, Problems, Polycentrism, Woecester College, Oxford 1994, p. 99.

98 G. Hofstede, Kultury i organizacje. Zaprogramowanie umysłu, PWE, Warszawa 2007, p. 38.

believes that these differences can be measured and the measurement tool is the scale their size can be evaluated by scoring or ranking. An attempt was also made to identify cultural differences occurring in the Polish and European metallurgical industry, which may be a symptom of a cultural collision referred to in the literature as clash.

Clash occurs in various forms of contact between two companies, from loose forms of their cooperation up to their merger. In the latter case, cultural differences may be an important factor disrupting the integration process. Cultural clash depends on two factors – cultural distance between organizations, and the frequency of contacts between members of both organizations. This is illustrated by the scheme proposed by A. Nahavandi and A.R. Malehzadek⁹⁹ (Figure 15).

Figure 15. Acculturation in the case of mergers

CONTACT CONFLICT ADAPTATION

Consolidation early stage of relation

Intensity depends on the frequency

of contacts

Dependent on acculturation

mode Source: A. Herdan (ed.), Fuzje, przejęcia... Wybrane aspekty integracji, Uniwersytet Jagielloński, Kraków 2008, p. 97.

Within the thematic field of the paper, the following cultural differences were observed:

• local (regional),

• industry related (horizontal connection),

• system (management system).

In Polish metallurgy cultural differences appear to a very limited extent. Ethnic differences do not occur, although „the structure of each organization bears the characteristics of national culture and its participants”¹⁰⁰. Sometimes problems with regional differences in the culture steelworks in particular parts of the country are observed. An example may be the merging of steelworks in Silesia and Dąbrowa Basin, commonly called Zagłębie [Basin]. There are considerable differences due to the cultural formation of Silesia during the period of functioning in the German state and the Dąbrowa Basin, being in the Russian partition. In the first case there was a mixed worker environment, consisting of people of Polish or Silesian national consciousness and German nationals, generally related to the then German Empire state apparatus. This situation exerted an influence on relations in metallurgical companies, where the management and administration, which were generally German,

99 A. Herdan (ed.), Mergers and acquisitions…, op. cit., p. 97.

100 Strategor, Zarządzanie firmą…, op. cit., p. 511.

modelled internal relations in the spirit of German culture (language, discipline, customs, etc.). The organizational culture of the Zagłębie region was different. The environment was definitely Polish, and the partitioner rarely occupied key positions in the factories as they were owned by Western capital. On the other hand, the restrictive actions of the authorities in the field of the workers caused opposition and did not favour discipline in the internal relations of companies. Numerous strikes and demonstrations and low wages and poor working conditions and work safety were not conducive to discipline and regularity. Comparing some of the important features of these two regional cultures, one can observe the following antinomies:

• learned rigour (Silesia) – order based on strength and punishment (Zagłębie),

• cooperation (Silesia) – generally lack of it (Zagłębie),

• discipline (Silesia) – rebellion (Zagłębie),

• national indifference of the majority (Silesia) – strong national identity (Zagłębie).

These historically-shaped characteristics have over time been unified but periodically returned; unfortunately not always in the right direction. The discipline of work was strengthened in Zagłębie, which was influenced by closing plants and unemployment. In Silesia the traditional attitude towards work has gradually declined.

In this situation in the 1990s mergers took place of Companies from Silesia and Zagłębie. For example, when the Polish steelworks holding was established, two Silesian steelworks were merged „Florian” and „Kosciuszko” with the „Katowice Steelworks” located in Zagłębie. Through this consolidation the mentality of the now mixed crews was confronted. Theoretically, it may have been feared that regional differences could hinder the positive effects of the merger. In this case, however, this did not happen. It did not happen because Steelworks „Katowice”

SA, which was the initiator of the merger, has already experienced the process of consolidation Silesian steelworks and steelworks from Zagłębie. Steelworks

„Katowice” SA has emerged with the use of professional staff from both Silesian and Zagłębie steelworks. For twenty years, the existing cultural differences have been unified, which means that both communities have created a new culture that includes positives of the constituent cultures. In turn co-operation habits created a field for the conflict-free incorporation of „Florian” and „Kościuszko” steelworks.

The favourable circumstance was that all three steelworks were territorially distant from each other, and although they were complementary in terms of production, the direct contacts of crews that favoured conflicts were not frequent. This example shows that the clash of cultures in companies where the crews are not ethnically diverse but, for example, only regionally, does not need to be destructive and does

not always require special integration programs, and therefore does not jeopardize the success of the merger.

It should be noted that some of the factors discussed above also include cultural elements.

Examples may be the behaviour of employees working in more hierarchical or more autonomous management systems. A typical metallurgical enterprise has a hierarchical structure, which is justified by the high accident risk associated related to the nature of production. The differences, however, exist and have some limited impact on integration. They become either a delaying factor or, when effectively neutralized, a factor of success.

In conclusion, it can be said that the factors that contribute to the success of knowledge transfer may have different significance. In metallurgical enterprises consolidated horizontally, with a similar organizational structure, varied in size, where cultural differences are small, integration efforts will need to be intensified.

This situation is shown in Table 14 and Figure 16. The magnitude of the impact has been evaluated, as before, by consultation with the subject matter experts. The following influence strength was determined.

Table 14. Contextual cultural factors of knowledge transfer

Factors Units of influence

Horizontal consolidation 2

Differences in management systems 3

Regional differences 1

As a unit of influence on Figure 14 the length of the horizontal side expressed in centimetres was adopted.

Source: own study.

The data presented in Figure 16 may be helpful in assessing the cultural susceptibility of steelworks to their merger. This method, after possible inclusion of due diligence in the scope analysis, may be useful for assessing the impact of the discussed factors on the speed of the consolidated companies integration process.

Referring to the values resulting from the chart, it must be stated that they have a de-stimulant character. This means that the larger the size is, the less possibilities of knowledge transfer are. An exception is a horizontal consolidation, which is a stimulant. It may therefore be assumed that the general, high degree of similarity of companies results in the fact that the more they identify themselves, the easier it is to consolidate them and transfer knowledge when it is justified.

The Figure 16 also shows that in the metallurgical industry the differences in management system are of the utmost importance and the regional factor is the least important. In the event that all factors occur simultaneously, there may be obstacles to the transfer of knowledge.

Figure 16. Share of cultural factors influencing the transfer of knowledge in specific situations

Horizontal consolidation

Regional differences

1. Steelworks consolidated horizontally, without influence from other factors

2. Steelworks consolidated horizontally, to a certain extent differing in management system (other constans)

3. Steelworks consolidated horizontally, to a certain extent differing in management system and showing cultural and regional differences

Key

Differences in management

systems Source: own study.