It's been a busy week for corporate mergers. Two of note are the one between cement makers Lafarge and Holcim and another, between mining giants Barrick and Newmont. While the former completed successfully, the latter did not. In both cases, corporate cultures were cited in the media as influencers in the outcomes.
But what is corporate culture? When pressed, employees might resort to describing it as the way they interact with their fellow workers. It's a set of rules, either unspoken or formally recorded, that pushes us to act the way we do in our work environments. We might refer to a company as having a "work hard, play hard culture", or an "accountability culture".
What drives these behaviours? Structure. A corporate culture does not spring into being, unformed by outside factors. Instead, it is a direct result of the type of structure that has been decided upon by the CEO and cascaded down through the levels of the organization.
In the case of Swiss and French construction material companies Lafarge and Holcim, "the strong complementarity of their portfolio and the cultural proximity between the two companies" allowed the merger to occur. I believe that the two companies had sufficient similiarity of structure to permit the merger talks to proceed.
With regards to the failed Barrick-Newman merger, there were apparently various points causing dissension, many relating to matters of structure. It became clear very quickly that if agreement to resolve these could not be reached, talks would not continue and ultimately broke off.
It will be interesting to see in the months ahead, once Lafarge-Holcim deals with anti-trust objections, what the new combined structure will look like, and the effect of this on their corporate culture.
