Case 04: Will Volvo’s perks give Ford sticker shock?
Definition of the problem:
In this case Volvo employees are facing cultural difference between them
and the acquiring company (Ford). They are concerned about the facilities
and wealth of benefits they have and the work-life balance they enjoy due
to the two working shifts. Besides Ford’s CEO gives ambiguous picture to the
post-acquisition phase.
Justifying the problem:
Acquisitions and merges usually results in a disturbance in the status quo of
the acquired company due to the ambiguity of the post-acquisition phase
and the cultural differences that may be over looked in this step.
A poorly managed post-acquisition process might lead to anxiety and
confusion amongst the organizational members affecting the productivity.
List of alternatives:
1- Slow and progressive speed of change
2- Sharing information and plans clearly
3- Applying Preservation mode
Evaluation of alternatives:
1- Slow and progressive speed of change
The slower the rate of changes done in post-acquisition phase, the less
impact and magnitude of anxiety and stress on Volvo’s employees.
By adopting the 3-step model of change, and prolonging the “unfreezing”
and the “change” phases Ford can overcome the resistance in Volvo’s team.
2- Sharing information and plans clearly
Sharing information and plans plays an important role in decreasing or
eliminating the confusion and stress among Volvo’s employees. Rational
persuasion and investing in the informational efforts will result in
acceptance atmosphere and commitment among Volvo’s employees.
3- Applying Preservation mode
Ford can apply a preservation mode in which it can keep the two cultures
separate, but that would lead to demotivation atmosphere among Ford’s
employees due to inequity in the benefits in the two work cultures.
Conclusion and recommendations:
Merging “Alternative 1” and “Alternative 2” will facilitate applying the
absorption mode in which a common culture can be created.
This can be done by looking for the change agents in Volvo’s work culture
and including them in the application of the needed changes which will
facilitate the job for Ford to make the best use of Volvo’s resources and
productivity.