Cultural integration : the aftermath of a merger between Gallo TV (Pty) Ltd and Nu Metro Home Entertainment

M.Comm.The majority of mergers and acquisitions result in loss of value or failure, with the main reason for this failure cited as lack of attention to the cultural differences between the businesses and an effective integration strategy. A critical component of the integration process must be change management, although there is little or no reference to change management processes in the literature on mergers and acquisitions. This study encompasses a literature review of the merger process with particular attention to the integration process, organisational culture and change management. This is followed by a review of a South African case study in the entertainment industry, which clearly illustrates the dangers of the lack of cultural due diligence and attention to the integration of the two cultures. Throughout the case study review it is apparent that the change in environment and culture was resisted by all concerned, with one of the most highlighted areas lacking being communication. After the merger was completed and the acquired company reached rock bottom from a staff morale and performance perspective, management of Nu Metro became integrally involved and began to actively integrate the businesses. Through communication and participative involvement, this has been achieved to a degree. This case review is then supported by research into the current state of the business through the eyes of the staff of both entities, GTV and Nu Metro Home Entertainment. The results of the qualitative and quantitative research will direct the final efforts to integrating the business and highlight the gaps within the business between what is preferred and observed in the organisational culture overall. From this case study, the research and the literature review, it can be induced that further research into the value of change management processes as applied to the merger integration process would be of merit. The case clearly shows that the change as forced upon the businesses through the merger was not well received by either business unit and the resistance went a long way to almost destroying the acquired business in totality. Through communication, a clear vision and strategy, participation and continued re-evaluation, some of the elements of a change strategy are clearly implemented towards the successful turn around and integration of GTV and Nu Metro Home Entertainment. The study makes suggestions for further steps toward integration and recommends future research into the application of change management techniques in the merger integration process. "Change leaders create "wave after wave of change until the vision is a reality"': (J. Bennett, The Sunday Times Careers, 20 October 2002: 2)