Abstract

This paper discusses how a newly merged large multinational company with diversified product's range has benefited from establishing and implementing a new company vision and new core values.

The newly developed company vision statement and core values had to be distinctive, inspiring and give direction. The corporate management team had to visibly lead the process of developing a new and better post merger company culture.

The success and failures, together with information on what was learned in the process are presented.

Introduction

The oil and gas industry is going through substantial reorganisation with mergers ongoing between oil companies and oil service companies.

When two companies are merged, in addition to a fusion of the physical assets and organisational units, there is a fusion of two cultures.

A fundamental aspect of a successful merger is that both the old cultures grow into a strong, progressive new culture.

This paper covers how the development and implementation of a new company vision and core values; including the ambition of a world class HSE culture, is being used as an essential tool in facilitating the success of a merger process. The new vision and values are designed to give a justification of the new enterprise to the employees and the other stakeholders. The values are the flag and the rallying point for the new company.

A key success factor in growing the new company culture is the role of the corporate management team in creating, testing, revising, re-testing and then leading a substantial implementation process of the vision and core values.

A critical success factor in the merger process - "The development of a business strategy and a new culture"

We recognised that perhaps the most significant risk to a successful merger was from the within, where the cultures of the original companies if retained and defended, could develop a prolonged internal underground cultural conflict.

For the merger to succeed the personnel and customers of the newly merged company had to perceive that the new company was better. They had to "buy into" the new culture.

It is widely accepted that an increasing percentage of technological companies market values is in "intellectual capital" as opposed to the traditional "hard assets" value; where intellectual capital comprises relationships with customers and partners, innovation efforts, company infrastructure and the knowledge and skills of organisational members.

It is obvious that the merger process having a significant impact on the culture of the merging companies is a threat to retaining and continuing to develop the "intellectual capital" e.g. value of the merged company.

There is no choice as to whether a company wants a culture or not. All companies have a culture. It was important for the new company to shape the culture it wanted and then to manage the culture.

The responsibility for developing and managing the desired culture in the company rests with the CEO and his corporate management team.

A critical success factor in the merger process - "The development of a business strategy and a new culture"

We recognised that perhaps the most significant risk to a successful merger was from the within, where the cultures of the original companies if retained and defended, could develop a prolonged internal underground cultural conflict.

For the merger to succeed the personnel and customers of the newly merged company had to perceive that the new company was better. They had to "buy into" the new culture.

It is widely accepted that an increasing percentage of technological companies market values is in "intellectual capital" as opposed to the traditional "hard assets" value; where intellectual capital comprises relationships with customers and partners, innovation efforts, company infrastructure and the knowledge and skills of organisational members.

It is obvious that the merger process having a significant impact on the culture of the merging companies is a threat to retaining and continuing to develop the "intellectual capital" e.g. value of the merged company.

There is no choice as to whether a company wants a culture or not. All companies have a culture. It was important for the new company to shape the culture it wanted and then to manage the culture.

The responsibility for developing and managing the desired culture in the company rests with the CEO and his corporate management team.

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