The British University in Egypt

Faculty of Business Administration, Economics

And Political Science

The Impact of Organisational Culture on Facilitating Cross-border

Acquisition: An Empirical Study on Kraft-Cadbury Acquisition in

Egypt

A dissertation submitted in part fulfilment

of the requirement for the award of B.A in

Business Administration- Human Resource Specialisation

By: Yassmin Ahmed Elemary

ID: 110959

Honours Levels

2012/2013

Under the Supervision of:

Dr. Hadia Fakhr Eldin

ii

Acknowledgments

Throughout the journey of researching, and writing this research; first; I would like to

thank Dr. Hadia Fakhr Eldin who acted as a mother; you always supported me and guided me to

achieve and complete the research. I really learned from you a lot in writing the research in

addition to your professional knowledge of culture that was very beneficial as it is the backbone

of my understanding of the concept organisational culture.

I would like to thank my family; my father and mother, who created a good environment

to me in writing my dissertation. They always supported, encouraged me to do better and achieve

my targets. Moreover; my sister Passant who always helps me in completing the research step by

step.

Also I would love to thank Dr. Maha Dejani who taught me how to think analytically; in

addition to her knowledge of OD and Leadership impacts on this research. I would like to thank

Mrs. Samar AbdelMaged as she helped me in the statistics of the questionnaire; I sincerely thank

my TAs; Mrs. Yousra Gohar, Mrs. Ola Mamdouh; Mrs. May Fahmy and Mrs. Noha Gamil who

always help and assist me when I need them even when she is busy.

I special thanks to Mrs. Sally Abououf, who I interviewed were her input make

significant in the research; in addition to her appreciation to me as a student want learn and

discover cultures.

Finally I would like to thank all my Doctors and Professors who helped me reach to this

stage as this research is a product from them.

iii

Abstract

Because of the agile market and globalisation; organisations tend to go for mergers and

acquisitions in order to enlarge its market shares. However; some organisations failed to consider

the culture differences of different organisations especially from different countries. Therefore;

understanding the concept of organisational culture would enhance effective acquisitions.

This research uses the CVF (Competing Value Framework) developed by Cameron and Quinn to

assess the organisation effectiveness of the organisation. In addition to know which culture type

of the CVF the acquirer and acquired firm used.CVF include four culture types as Clan, Market,

Adhocracy and Hierarchy culture. Therefore; the CVF helps to compare between cultures. In

addition to its validity ensures reliability of the outcome. Moreover; it Cameron and Quinn

established the OCAI Questionnaire that test the CVF based on its 6 dimensions (dominant

characteristics, organisational leadership, management of employees, organisation Glue,

Strategic Emphasis, and Criteria of Success)

The aim of the research to discover the impact of organisational culture on cross-border

acquisition; thus the researcher conducts a case study on Kraft and Cadbury’s acquisition in

Egypt. Purpose of this research is to find out the culture types of both firms in the CVF and to

assess the acculturation and whether the integration or the acquisition was smoothly done

through the OCAI. This research recommends the right actions that should be taken by the

organisation to facilitate the Acquisition

The methods used in the research quantitative (from the OCAI Questionnaire) and qualitative

approach (interview with the HR Business lead in Kraft/Cadbury). The researcher uses the factor

analysis to assess the correlations and discover which culture prevails; in addition to using the

CVF instrument statistics.

The findings of the research proved that there significant relationship of Kraft and Cadbury with

Market, and Adhocracy; however, the interview and the factor analysis ensure that there is

correlation with Clan culture of the CVF.

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Table of Contents

1. Chapter One: Introduction.................................................................................................. 1-6

1.1.Research Topic........................................................................................................... 2-4

1.2.Research Subject ............................................................................................................4

1.3.Research Methods ...................................................................................................... 4-5

1.4.Dissertation Structure ................................................................................................. 5-6

2. Chapter Two: Literature Review ..................................................................................... 8-18

2.1. Organisational Culture ........................................................................................................8

2.1.1.Schein’s 3 levels of Culture .................................................................................... 8-9

2.1.2.A.Competing Value framework(CVF) ................................................................. 9-11

2.1.2.B.Organisational Culture Assessment Instruments (OCAI) .............................. 11-13

2.1.3.Hofstede ...................................................................................................................14

2.2. The importance and criticism of the CVF/OCAI ........................................................ 14-15

2.3. What is Acquisition and Effective Acquisition Components ..................................... 15-17

Organisational Fit ..................................................................................................................16

Cross-Culture Management ..................................................................................................16

Modes of Acculturation ................................................................................................. 16-17

2.4. The Effect of Culture on effective acquisition ............................................................ 17-18

2.5. Conclusion and Recommendations ...................................................................................18

3. Chapter Three: Methodology .......................................................................................... 20-31

- Research Objectives, aims and Questions .................................................................. 20-21

- Research Hypothesis .................................................................................................... 21-22

- Research Framework ........................................................................................................ 23

3.1.Kraft/Cadbury Case study ............................................................................................... 24

3.2.The Research Approach .................................................................................................. 25

3.3.The Research Philosophy ............................................................................................ 25-26

3.4.The Research Sampling .................................................................................................... 26

3.5.Technique .................................................................................................................... 27-29

3.6.The use of OCAI Questionnaire ................................................................................. 29-30

3.7.Assessing the culture in Kraft &Cadbury Acquisition ..................................................... 30

To Conclude ............................................................................................................................... 30

4. Chapter Four: Findings and Analysis ............................................................................ 32-58

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4.1.Interview Analysis ................................................................................................. 32-38

4.1.1.Actions taken for cross-culture management .............................................. 34-38

A. Role of Leadership & OD Practitioner ......................................................35

B. Teambuilding Workshops ..........................................................................36

C. Establishment Town Halls meetings ..........................................................37

D. Hybrid Appraisals, Rewards, & Structure ................................................37

4.2.Type of Acquisition ....................................................................................................38

4.3. Acquisition Strategy.............................................................................................. 38-39

4.4. Merger Emotion Syndrome Model ............................................................................39

4.5. Applying Edgard Schein 3 levels of culture on Mondelēz culture ...........................40

4.6. Questionnaire statistics ......................................................................................... 40-56

4.7. Relating Hostede on Kraft, Cadbury and the Egyptian context .................................57

5. Chapter Five: Conclusion ............................................................................................... 60-64

5.1.Summary of the Findings ...................................................................................... 60-62

5.2.Limitation of the research ..................................................................................... 62-63

5.3.Research Recommendations .......................................................................................63

5.4. Practical Implication: CVF need to be revised ...........................................................63

5.5. Recommendations for Further readings .....................................................................64

6. Bibliography ....................................................................................................................... 65-69

7. Appendix ............................................................................................................................. 70-80

6.1.Factor Analysis and Correlations tables of Chapter 4 .......................................... 70-77

6.2.OCAI Questionnaire ............................................................................................. 78-79

6.3.Interview Questions ....................................................................................................80

vi

Chapter One: Introduction

1

1

Chapter One: Introduction

Many organisations have failed during the acquisition process because of their different

organisational culture as they failed to work together under one roof (Browaeys & Price, 2008, p.

176). Many scholars described how organisations in joint ventures work synergistically together

under one roof as the “marriage” (Holland & Salama, 2010). A successful civil marriage when

husband and wife have things in common or they have the willingness to understand each other

very well to discover their commonalities or create new one. Therefore, the literature used the

term marriage as a metaphor for organisational merger and acquisition. “Organisational

marriage” is the synergistic integration between two firms where there is compatibility between

these firms in management practice, employees’ behaviour, and others as a result a culture fit

occurs (Cartwright & Cooper, 1993). Or the two firms have the willingness to collaborate and to

create a common culture and language despite their differences; this could lead to the creation of

hybrid from both cultures that will reduce the probability for both organisational cultures to

divorce.

Scholars have classified marriage by two types; traditional and modern marriage. First;

traditional marriage; any differences between both firms is considered destructive; therefore,

the strong firm tend to impose its culture on the weaker firm, and this describes a Win/Lose

solutions. Second; the modern marriage; the two parties accept their differences as it is “added

value” for the acquisition; therefore, they seek to Win/Win solutions (Cartwright & Cooper,

1993, p. 64). Accordingly; it is important to understand the organisational culture of the

acquired and acquirer firms in order to have effective acquisition

1

2

This research aims to determine the impact and congruence of organisational culture by

using the Competing Value Framework (CVF) and its effect on the OCAI dimensions as;

dominant characteristics, organisational leadership, management of employees, organisation

Glue, Strategic Emphasis, and Criteria of Success on facilitating effective cross-border

Acquisition in Cadbury-Kraft acquisition in Egypt. Purpose of this research is to find out the

culture types of both firms in the CVF and to assess the acculturation and whether the integration

or the acquisition was smoothly done through the OCAI. This research recommends the right

actions that should be taken by the organisation to facilitate the Acquisition

1.1. Research Topic:

In order to understand the concept of organisational culture; we must understand the

concept of culture. Scholars clarified that culture does not has a clear cut definition; however it

has several of definitions as Hofstede identified culture as “the collective programming of the

mind” which differ people from each other (Hofstede, 2007, p. 413). Similarly; the definition of

organisational culture is extracted from the concept of culture which is similar values, norms and

beliefs of the employees within the organisation (Sun, 2008).

Several models of culture were developed by Scholars in order to assess the

organisational culture. This research applies the Competing Value Framework (CVF) model

developed by Cameron and Quinn in 1999 on two firms undergoes acquisition. The CVF model

assesses the organisational effectiveness. The CVF is divided into two contradictory dimensions

internal/external, and stability/flexibility. The two dimensions are divided into four archetypes

which are; Clan culture (open, friendly workplace and internal), Adhocracy culture

(innovative, external, and flexible), Market Culture (external, competitive, achievement and

3

stable), and Hierarchy culture (internal, stability, rules, and procedures). The four culture types

are present in all organisations but in degrees (Rai, 2011). The research also shed lights on

Hostede dimensions and the 3 levels of Edgard Schein.

Additionally, Cameron and Quinn developed the organisational Culture Assessment

Instrument (OCAI) that is based on the CVF and also developed the OCAI questionnaire by its

six dimensions which are dominant characteristics, Organisational Leadership, the management

of employees, organisational glue, strategic emphasis and criteria for success; the OCAI offers

quantitative tools that could identify the type of the culture of the organisations (Pushnykh &

Chemeris, 2006, p. 168). If an organisation is Clan thus the six dimensions will be open and

friendly style; for example organisational leadership will be friendly and open thus will facilitate

the communication flow within the workflow.

The CVF is considered important framework as it is used widely in literature and is

applied on different countries; therefore, it proves validity and consistency (Lamond, 2003).

Moreover the CVF allows us not just to know the organisational culture but also to compare

organisational cultures with each others.

Since the researcher assesses the effect of organisation culture on cross border

Acquisition which is acquiring two entities from different cultures. Scholars clarified that

acquisition has advantages and disadvantages. First the advantages are; to grow, gain competitive

edge, and increase the market share (Vasilaki & O'Regan, 2008). The disadvantage is employee

turnover as they are stressed from losing their positions and may have the culture shock (Weber,

Shenkar, & Raveh, 1996).

4

According to the literature; in order to have effective acquisition, both firms must have

organisation fit (the congruence in the management style between two firms) , cross culture

management (different ways in amalgamating culture) (Datta, 1991) (Zhu & Huang, 2007) and

according to Berry there are different strategies or modes of acculturation firms adopt during

acquisition either they separate from each other, integrate and acculturate, or assimilate (adapt

the acquirer’s culture) or deculturate (the acquirer firm impose its own culture on the acquired

firm) as cited in (Nahavandi & Malekzadeh, 1988, pp. 82-83).

1.2. Research Subject:

Cross border acquisitions have been discussed widely in the last 10 years due to the emergence

of globalisation. International Companies tend to be involved in global alliances like mergers

and acquisitions in an attempt to increase profits and achieve higher management effectiveness.

Therefore; the researcher conducts case study on Kraft/Cadbury acquisition in the Fast Moving

Consumer Good (FMCG) industry that took place in 2010 in Egypt in order to assess the culture

differences and how they acculturate. Kraft (US Nationality) is the acquirer firm that it targets

Cadbury to enlarge its portfolio and the market share; therefore, Cadbury is the acquired firm

which is a UK nationality.

1.3. Research methods:

The researcher adopts the deductive approach which is developing existing theories

as the CVF and not adopting the inductive where scholars create their own theories (Ali &

Birley, 1998). The research is based on secondary and primary research; the secondary data are

the theories and information acquired from the internet, books and articles. Second the primary

research, which conducting semi-structured and open ended interview to let the interviewee talk

5

freely and that describe qualitative data as well as conducting the OCAI Questionnaire developed

by Cameron and Quinn as to assure the validity and reliability and that describe quantitative data.

The research philosophies are Positivism; Ontology (include objectivity of the

theories and subjectivity of the interview and questionnaires); and Interpretivism (allow the

researcher to interpret the interviewee and answers of the questionnaires) (Saunders, Lewis, &

Thornhill, 2012). In addition to the research sampling; the population of Kraft/Cadbury is around

200; thus the sample size will be based on the non-probability (random) sampling as it will not

consume time in distributing the questionnaire to the employees; like the haphazard (volunteer)

samplings (Saunders, Lewis, & Thornhill, 2012).

1.4. Dissertation Structure

Chapter 1: Introduction:

This chapter introduces the topic and the subject of the dissertation. First; it introduces the idea

of organisational culture in firms and the CVF which is different culture the organisation adopts.

Second it introduces the effect of organisational culture on effective acquisition or marriage.

Thereafter; this chapter introduces summary for the methodology.

Chapter 2: Literature Review

This chapter reviews the literature review. As the research about the concept of the organisation

culture, and analysing the CVF theory; as well as explaining how the organisation culture create

effective acquisition. This chapter is considered as a massiveness of knowledge where the

findings of the research are built on it. As well as highlighting on some recommendations.

6

Chapter 3: Aims and Methodology

This chapter outlines the aims, objectives and methods used in this research as primary and

secondary data. This chapter introduces the intended company that research study on; in addition

to clarifying the research sampling and philosophy.

Chapter 4: Findings

This chapter interprets and analyse the data findings from the interview and OCAI

Questionnaire. As well as comparing that data by the literature to ensure whether the research

hypothesis is true or null. This chapter highlights on issues that needs further research

Chapter 5: Conclusion

The last chapter summaries the data findings and concluding the results of the research, as by

highlighting the culture of the acquired and acquirer firm that lead to effective acquisition. As

well as it discusses the limitation of the research, recommendations and further readings.

7

Chapter Two: Literature Review

2

8

Chapter Two: Literature Review:

2.1. Organisational Culture

To begin with; culture is the shared values, beliefs and attitude; as Hofstede clarified that culture is “the

collective programming of the mind” that it differs from one group of people to another (Hofstede, 2007, p. 413).

Furthermore; culture is embedded in organisations that shapes organisation’s members actions and behaviours;

according to Deshpande and Webster organisational culture is “the pattern of shared values and beliefs that help

members of an organisation understand why things happen and thus teach them the behavioural norms in the

organisation” (Deshpande & E.Webster, 1989, p. 4). Accordingly, culture broadly defines the personality of the

organisation.

2.1.1. Schein’s three levels of the Organisational Culture

Schein identified that there are three levels of culture when analysing organisations as

shown in figure 1 below. First Artefact and behaviour which is like the surface of the sea

where one can observe the organisation’s dress code (level of formality), language; the second

level is the values and beliefs of the organisation, this level is inside the sea where no one could

easily know the organisation’s values and beliefs unless she/he interacted with the organisation

as by having interview and survey so one could learn the philosophies of the organisation

(Schein, 1990). The final level is Assumptions which is the deep level of the sea as it is like a

“treasure” that cannot be changed, by asking more in-depth questions and by direct observation

one could answer the behind reasons of why employees dress like that? Or why employees

behave like that? (Browaeys & Price, 2008).

2

9

2. 1.2. Competing Value Framework (CVF) and the effects on OCAI:

A) The Competing Value Framework (CVF)

According to the work of Cameron and Quinn in their book “Diagnosing and Changing

Organisational Culture” they introduce the CVF. It describes the current state of culture in the

organisation and provides ways to help people purse change in organisations as well as the CVF

assesses the effectiveness of the organisation. The CVF has two broad dimensions; first the

internal/external, second is the stability/flexibility therefore it seems to have “paradoxical

values” (Gray & Densten, n.d, pp. 595-598). Supporting Cameron and Quinn claims; Rai

identified that these two dimensions are broken down into four distinct culture types in the

framework where they are Clan, Adhocracy, Hierarchy and Market as in Figure 2 below.

Cameron and Quinn distinguished between; First the Clan culture where it lays between

internal and flexibility, this culture type focus on friendliness workplace, “parent figures leader”,

Figure 2:1

10

participation as well as concern for employees development therefore, it is a human relation

perspective; the Adhocracy culture which lays between external and flexibility where people

are risk takers, and innovative, this type goal is to be the leading edge in knowledge and

acquiring new resources thus it is organic structure, as well as people are ready to change

therefore organisations will be described as open system perspectives (Gray & Densten, n.d)

(Panayotopoulou, Bourantas, & Papalexandris, 2003).

On the other hand; according to Gray and Denesten the other opposing dimensions are

the Hierarchy and Market culture. Hierarchy culture is internal and stability focuses. It is

characterised by centralisation structure where employees are bounded by rule, regulations and

procedures therefore there is no rooms for innovation so its perspective is internal process; last

but not least the fourth type is Market culture, its focus is external and stability, this type values

goal accomplishments and competitiveness therefore it is goal oriented with rational goals

perspective (Gray & Densten, n.d). In addition to Gray and Denesten; Helfrich, Li, Mohr,

Meterko, & Sales declare that any organisation may have all the four cultures but in degrees

(Helfrich, Li, Mohr, Meterko, & Sales, 2007).

Other perspective of the CVF quadrants; Rai identified that each quadrant may represent

the nature of the organisation as Nike is an agile market where it has to be in Clan quadrant

while Coca-Cola in a steady market so it could fit with Market Culture (Rai, 2011), thus the

nature of the organisation contributes to the organisation culture. Moreover there are artefacts

that indicate whether the organisation is Clan or Hierarchy by the way they dress (Formality) and

the structure of the office (working in team or not) and the way they talk in friendly way or

formal one.

11

Furthermore; the literature emphasises three additional dimensions of culture; culture

strength (the domination of the culture), cultural congruence (the fit with other organisational

cultures), cultural type (a specific type of culture that represent the organisation) (Cameron K. ,

2004).

Rai criticised the CVF model for not including ethics. He modified the CVF and added

another dimension which is “ethics and trusted culture” as he believed that it is important (Rai,

2011, pp. 787-789). Therefore ethics as a third dimension is added in figure 3.

B) Organisational Culture Assessment Instrument (OCAI) Components:

Cameron and Quinn developed the organisational Culture Assessment Instrument

(OCAI) that is based on the CVF in 1999; the OCAI consists of six dimensions which are

dominant characteristics, Organisational Leadership, the management of employees,

Figure 2:2

12

organisational glue, strategic emphasis and criteria for success; each dimension complements the

culture types of the CVF (Ramachandran, Chong, & Ismail, 2011); additionally, Cameron and

Quinn developed a questionnaire that is extracted from OCAI components that it offers

quantitative tools that could identify the type of the culture of the organisations (Pushnykh &

Chemeris, 2006, p. 168) .

The first dimension of the OCAI is dominant characteristics; which is the dominant

values and organisational culture that the organisation has; for example; an organisation is a clan

culture therefore it will have the dominant characteristics of flexibility and team work (Cameron

K. , 2004) while if the dominant culture is “Market &Adhocracy” therefore the dominant

characteristics are “goal oriented” (Pushnykh & Chemeris, 2006, p. 180).

Second dimension; Organisational Leadership as Quinn (1984) emphasised that there is

a fit between leader style and the culture type of the organisation; if a leader is coordinator it will

harmonise with the Hierarchy Culture as cited in (Cameron & Freeman, 1991). Therefore; as

Zaheer, Rehman, and Ahmad added that there is huge congruence between leadership style and

the type of culture (Zaheer, Rehman, & Ahmad, 2006).

The third dimension; management of employees which is the different treatment and

direction of employees in respect with the different type of culture the organisation has

(Cameron K. , 2004).

The fourth dimension; the organisational glue where “Schein (1985) identified Bonding

or coupling mechanisms refer to the set of shared, underling values and understandings that

characterise the organisation and act as Glue for members” as cited in (Cameron & Freeman,

1991, p. 28) In addition bonding or Commitment occurs in Hierarchy culture as rules.

13

Contradicting with Bonding of Clan culture is teamwork and informality (Cameron & Freeman,

1991). Needless to say, organisation glue reflects that what organisation behave is what

employee behave (Lanier, 2012)

The fifth dimension strategic emphasis “define what areas of emphasis drive the

organisation’s strategy” based on the type of the culture; if it is Adhocracy therefore the

emphasis is innovations (Cameron K. , 2004, p. 6). The final dimension is the criteria for

success which is the organisational effectiveness that value efficiency in a Hierarchy culture

while in market culture value competition (Cameron & Quinn, 2011). In other word; the

organisation view success according to the organisational culture type.

Finally if all of these dimensions or attributes fall in the same quadrant in the CVF as in

Clan; therefore, this is verification that the organisation has culture congruence (Cameron &

Freeman, 1991) however practically it is very hard that all dimensions fall in the same quadrant

because some departments in organisation has to be steady as for example in a Hierarchy culture

not Clan as accounting and finance department. Therefore, the six dimensions act as indicators

of the cultural type of the organisation represented in figure 4.

Figure 2:3

14

2.1.3. Hofstede:

Geert Hofstede established cultural research on national cultures. He developed a model

of five dimensions which are Power Distance, Individualism versus Collectivism, Masculinity

verses Femininity, Uncertainty avoidance, and Long-term orientation. Despite many scholars

criticised Hofstede’s research because it was bounded by one company (IBM), his work as is

requisite (Browaeys & Price, 2008).

National culture has a great impact on international joint ventures and acquisitions as

each organisation originate from a different national culture (Park & Ungson, 1997)(Lindholm,

2000).

2.2. The importance and criticism of the CVF

Because of the consistency of the empirical studies conducted on the CVF, many

researchers agree that the CVF was heavily and successfully used on the Asian countries. Not

only the CVF explains the explicit and implicit culture of any organisation but also differentiates

and compares organisations by their culture types. The CVF is used in the literature by many

Scholars on different cultures (Lamond, 2003); therefore these studies assured the validity and

reliability of the CVF/OCAI, Yu and Wu added that “The CVF can also be used as a conceptual

model to do some qualitative research to explore the reason and process of organisational

culture change” (Yu & Wu, 2009, p. 40).

Denison and Mishra criticised the CVF as “employee involvement activities can lapse

into insularity and have a limited, or even negative impact on effectiveness” as cited in (Yu &

Wu, 2009, p. 37). In other words, If organisation is rigid, focusing on stability and control

(Internal environment) and neglecting the innovation and creativity to adapt with the external

15

environment. Therefore Cameron and Quinn did not clarify that the organisations have to have

overlaps in the culture types of the CVF but in degrees. Consequently; Denison and Spreitzer

(1991) solved this problem by identifying that the role of the manager is to guide the

organisation and its employees in order not to highly focus on flexibility on the expense of the

other types of cultures because the extreme focus on flexibility will result to a chaotic

organisation as cited in(Ramachandran, Chong, & Ismail, 2011). Another way around this would

be to consider the PESTEL which is the external environment.

2.3 . Acquisition and effective acquisition

Acquisition is the act of acquiring another entity. In other words an organisation buys

another company and by that the purchaser company assumes that it will have all the control

(Borys & Jemison, 1989). In other words acquisition is “a hybrid of two independent firms”

(Park & Ungson, 1997, p. 285). The term Acquisition has different meanings; as it could be

referred as “recourse Acquisition” or knowledge acquisition and organisations Acquisition

which is “acquiring another organisation” (Lyles & Salk, 1996, p. 878). Furthermore, there are

two types of acquisitions which are domestic M&A and cross-border M&A; domestic M&A

done inside the boundaries of the country while cross-border M&A which “involve two

companies from two different countries”(Zhang, 2010, p. 10) .

In fact lots of companies follow acquisition to gain competitive edge and to increase its

market share in addition to gaining lots of resources (Vasilaki & O'Regan, 2008). In contrast of

the above, not always acquisition makes good changes in the organisation, conflict rises due to

the integration (Cohen, Birkin, Cohen, Garfield, & Webb, 2006). According to Krug’s research

that measures the turnover of top manager in post-acquisition that “firms lose around 32 percent

of its top management team” as this shows that acquisition in some cases cause stress, and loss of

16

status (Krug, 2009, p. 4) . In the literature, scholars agree that to have effective or compatible

acquisition (Datta, 1991) (Vasilaki & O'Regan, 2008)will not be achieved unless both firms

must have organisation fit, cross culture management and a strategy of acquisition to

achieve acculturation (Datta, 1991) (Zhu & Huang, 2007) (Nahavandi & Malekzadeh, 1988,

pp. 82-83).

Moreover; companies when pursing acquisition; they tend to adopt a certain strategy or

strategies. According to Berry’s Model of acquisition strategies or (Modes of Acculturation)

which are Integration (where the two firms integrate their assumptions and beliefs), Assimilation

(where the acquired firm tend to resign its culture and adapt the acquirer one), Separation (where

each firm adapt its own culture and refuse to adapt to the other) and Deculaturation (is the

disintegration which is the worst strategy) as cited in (Nahavandi & Malekzadeh, 1988, pp. 82-

83) .

In order to have effective acquisition; the acquired and acquiring firm must have

organisation fit that firms have to be incorporated after the acquisitions, according to Datta the

organisations’ management style and reward system; in other words organisation fit will keep the

firms from culture ambiguity if the two firms have different management style (Datta, 1991).

Furthermore, in order to manage the cross border acquisition effectively; Haung and Zhu

declared the importance of having Cross-Cultural management that will facilitate both

organisational cultures to synergistically meld together as to avoid culture conflicts; therefore,

this amalgamation will form a new culture. Haung and Zhu propose four models for Cross-

Cultural management to form effective culture integration as; localisation (acquirer firm

respect and localise the acquired culture instead of imposing), transplanting the culture of the

17

acquirer firm, culture innovation (amalgamating both cultures), evasion tactics is the worst

option where the culture gap occurs between the two firms and in need to third party to bridge

the gap (Zhu & Huang, 2007).

Furthermore; literature has proved that emotions interfere during and after acquisitions.

Therefore; Hunsaker and Coombs (1988, 60) introduced stages of “Merger-emotions syndrome

Model”; the stages start from denial (which is refusing the acquisition) until enjoyment (where

both firms enjoy their integration and hybridity of each others) as cited in (Pikula, n.d., p. 7).

2.4. The effect of culture on effective acquisition:

Does organisational cultural affect acquisitions? Or do the acquisitions shape the

organisational culture of both firms? Scholars stressed the effects of organisational culture on

Figure 2:4

18

Acquisition. “Culture is a crucial issue for employees in merger and acquisition; there are two

cases the purchaser employees and the acquired employees. The existing employees who make

the purchase assume that new employees will integrate the existing culture. However; the new

employee will assume that their old culture will be integrated into the buying company’s culture;

according to the literature in most cases the buying company control the cultural and the

workplace environment” (Shook & Roth, 2011, p. 144) at this point the literature answers the

first questions mentioned above were the organisation culture affect impacts the acquisition .

Therefore; this research will discover if the acquirer shape the culture of the acquired firm and is

the acquirer has dominant culture where its ethnocentricity impose its culture type to the whole

organisation (Gertsen, Derberg, & Torp, 1998). As a result; the amalgamation of both

organisational members’ cultures would boost the acculturation of the acquisition According to

the literature the acquirer firm impose its own culture on the other firm (Shook & Roth, 2011);

however in some cases the national culture may prevail (Lindholm, 2000) .

2.5. Conclusion and recommendations

The CVF was heavily used by many scholars who applied it on different organisations

worldwide to identify the organisations effectiveness. The CVF proved to be valid and reliable

instrument; however to overcome Rai’s criticism of the CVF discussed above, the Ethics can be

added as third in order to detect whether the acquirer firm was ethical in the acquisition process

or not, does it consider the wellbeing of the members of the organisation? Does it create good

congruence with the acquired organisation’s culture or adopts the ethnocentric view? Moreover,

the CVF and the OCAI can address the culture of the organisations that undergo changes as

acquisition, as it can be used to assess and describe the culture before and after the acquisition.

19

Chapter Three: Methodology

3

20

Chapter Three: Methodology:

Research Objectives:

1- To examine the effect of the type of Organisational leaders on encouraging effective

acquisition.

2- To determine the types of employee management of both firms that fosters the

acquisition.

3- To assess the congruence of the organisation glue between firms on achieving

compatible acquisition

4- To identify the dominant characteristics of both firms that foster or hinder the

acculturation of effective acquisition

5- To describe the firms criteria of success that enhance acquisition

6- To measure the fit of the strategic emphasis of both firms on having smooth acquisition

7- To explore the reasons and components acquisition takes place and its effects.

8- To assess the relationship of organisational culture that affects acquisition.

9- To recommend the right actions taken by the organisation to facilitate the acquisition and

decrease the resistance to change.

Research Aim and Questions:

This research aims to determine the impact and congruence of organisational culture by

using the Competing Value Framework (CVF) and its effect on the OCAI dimensions as;

dominant characteristics, organisational leadership, management of employees, organisation

Glue, Strategic Emphasis, and Criteria of Success on facilitating effective cross-border

Research Aim and Hypothesis; Research objectives and questions

3

21

acquisition in Cadbury-Kraft acquisition in Egypt. Purpose of this research is to find out the

culture types of both firms in the CVF and to assess the acculturation and assess whether the

integration or the acquisition was smoothly done through the OCAI. This research recommends

the right actions that should be taken by the organisation to facilitate the Acquisition.

Research questions are;

- To what extent does the organisational culture impact the acquisition?

- To what extent does the acquisitions/integration impact the culture of Kraft and

Cadbury?

- Are organisations effective with congruent culture or incongruent cultures?

- Did the cross-border acquisition enhance the acculturation and fit between firms?

Research Hypothesis (H1):

H1: There is a significant relationship between organisational leadership and the effectiveness of

the acquisition.

H0: There is no significant relationship between organisational leadership and the effectiveness

of the acquisition.

H2: The compatibility of employee management of the OCAI will lead to a significant impact on

effective acquisition

H0: There is no compatibility of employee management of the OCAI will lead to a significant

impact on effective acquisition

H3: There is a relationship between organisational glue and the effectiveness of the acquisition.

22

H0: There is no relationship between organisational glue and the effectiveness of the acquisition.

H4: The congruence of the criteria of success is a dimension in OCAI in facilitating effective

acquisition.

H0: The dissimilarity of the criteria of success is a dimension in OCAI in facilitating effective

acquisition.

H5: There is a significant relationship between culture strategic emphasis and effective

acquisition.

H0: There is no significant relationship between culture strategic emphasis and effective

acquisition.

H6: The compatibility in the culture’s dominant characteristic facilitates effective acquisition.

H0: The incompatibility in the culture’s dominant characteristic is a barrier for effective

acquisition.

23

Research Framework

Effective Acquisition

Dependent Variables (Effect) Independent Variables (Causes)

Organisational Culture

(CVF)

Organisation Fit

Management of Employee

Dominant Characteristics

Organisational Leadership

Organisation Glue

Strategic Emphasis

Criteria of Success

Modes of Acculturation

Cross-Culture

Management

Figure 3:1

24

3.1. Kraft/Cadbury Acquisition Case Study:

In the last three years, the acquisition between Kraft and Cadbury took place in the fast-

moving consumer goods industry (FMCG). Kraft Foods is a United States company, it was in the

market for 110 years. Kraft is the largest organisation of candies and beverage and its portfolio

after acquisitions are “Kraft, Jacobs, Maxwell House, Cadbury, Trident, Nabisco, Oreo,

Philadelphia and Osca Mayer” according to (Drive, 2008) as cited in (George, Onokala,

Dawodu, & Olayemi, 2012, p. 113) therefore Kraft calls its portfolio unrivalled portfolio; in

addition to that Kraft has an annual sales of 18$billion (kraft foods group, n.d.). Kraft entered

Egypt around year 1999 (AbdelRazek, 2008). On the other hand, Cadbury Company is UK

nationality, it has established in year 1879 and it has been established in Egypt it in 1992.

Cadbury is a chocolate based company; its products are Cadbury Dairy Milk Flake, crunchy and

others (cadbury Products, n.d.).

Fortunately, Kraft and Cadbury acquisition took place on February 2010 after long

concessions and agreements (George, Onokala, Dawodu, & Olayemi, 2012, p. 113). According

to the interview held on BBC with Kraft foods CEO; the reasons that Kraft bought Cadbury is to

enlarge its portfolio, increases market share, expand to new markets (Riley, 2010). On the other

hand “some researchers stated that Kraft's merger with Cadbury is a 'bumpy but upward road'”

(Sadiq, 2010). Furthermore; in order not to let the world call kraft as “Kraft/Cadbury”, thus they

name it “Mondelēz International” where Monde means world and delēz means delicious (Panel

& Euromonitor, 2010), accordingly it shows that Mondelēz is the umbrella that it includes Kraft,

Cadbury and others. Therefore, this study intends to assess how the two cultures aligned

together and to identify the cultural differences that took place during the acquisition and how

they overcome; furthermore assessing the culture shift of both organisations during acquisition.

25

3.2. Research Approach:

The intended participant of this research is Kraft-Cadbury’s managers and employees in

Egypt, Cairo. The researcher will access the human resource department of Kraft that will help in

understanding how the purchaser company dealt with the acquisition. The researcher will adopt

the deductive approach that will be applied on the established theories done by scholars on the

case study of Kraft/Cadbury’s acquisition as the CVF and OCAI done by Cameron and Quinn in

addition to Hofstede dimensions, this approach is different from inductive approach where the

person develop his/her own theory (Ali & Birley, 1998) .Therefore the researcher prefer the

deductive than inductive as she agrees with Bryman (1995) that deductive approach provides

guideline and support the researcher understandings as cited in (Dubois & Gadde, 2002). This

research is based on secondary and primary data in order to assure the reliability and validity of

the information coming from the employees and the manager.

3.3. The research Philosophy:

The research philosophies are Positivism; Ontology; and Interpretivism. First;

Positivism philosophy where “researcher use data and existing theories and develop it

according to the hypothesis of the research” (Saunders, Lewis, & Thornhill, 2012, p. 134) and

that will support the deductive approach of the research in other words; the researcher will use

the CVF which is an existing theory, and then develop this theory based on the study that will be

applied for. Then; Ontology philosophy that the research will include both the objectivism and

subjectivism, where objectivism focus on the theories of the research such as the CVF and OCAI

dimensions that states the different types of organisational culture, while subjectivism is the

analysis of the employees’ answers that the researcher will base the research according to the

26

interviewee and the questionnaire so it will be subjective. The third philosophy Interpretivism

which reflects the qualitative approach that open rooms for interpretations through explanatory

research on understanding the culture of Kraft and Cadbury which will allow the researcher to

interpret and modify her understandings of the acculturation of both organisational cultures

(Saunders, Lewis, & Thornhill, 2012).

3.4. The research Sampling:

The population of the organisation is around 200 employees and managers; therefore, the

sample size will be 132 employees and managers at 5% margin of error (Saunders, Lewis, &

Thornhill, 2012, p. 266). The researcher uses the non-probability sampling because it is less time

consuming than probability sampling. Consequently the researcher will use Purposive sampling

including Heterogeneous sampling which is getting employees from different departments that

will support the research in recognising the behaviour of different people toward the culture

change, in addition to typical case sampling which is applying the study on Kraft and Cadbury

acquisition (Tansey, 2007).

Furthermore; according to Tansey(2007) the volunteer sampling including Snowball

Sampling which is according to the willingness of the employees to volunteer to answer the

survey rather than to be chosen because in most cases employees are busy to answer the

questionnaire. The previous two kinds of samples had reasonable costs. Last; the Haphazard

sampling which is the convenience sampling that is easy to implement it and cost-saving

(Saunders, Lewis, & Thornhill, 2012).

27

3.5. The Research Technique:

To begin with secondary data, which is the information that already exist and done by

another person/organisation; therefore, the researcher will focus on this type of research by

reviewing the literature from books and academic articles. However; there is disadvantage of the

secondary data that it is costly; therefore, the university’s library is a facilitator and can access

plenty of articles for no costs (Saunders, Lewis, & Thornhill, 2012).

In addition an unobtrusive measure as the organisation chart, a secondary data documents

retrieved from the company that will support the previous methods the interview and

questionnaire (Cummings & Worley, 2008), the benefit of realising organisation chart of both

organisations in order to know whether they are more of hierarchy or not which will facilitate to

the researcher to know the culture type of Kraft and Cadbury. In the second place; the researcher

conducts primary research which is starting research from scratch by conducting qualitative and

quantitative research (Saunders, Lewis, & Thornhill, 2012).

First, the Qualitative research will be held by in-depth and personal interview with HR

manager of Kraft, this type of interview will be semi-structured and open ended interview. The

semi-structured (which consists of list of questions where the researcher can skip or modify

some; in order to give to the interviewee the choice to talk freely) and open ended interview in

order not to limit the interviewee with set of answers (Saunders, Lewis, & Thornhill, 2012).

Moreover; in order to reduce the disadvantages of the interview, as the interviewee could be

biased thus achieving misleading information; therefore, the researcher uses different types of

methods as the OCAI questionnaire in order to get the accuracy of information (Cummings &

Worley, 2008). Accordingly, the interview helps in the interpretation of the interviewee

28

illumination and explanations about the change where the interviewee poses her/his feelings of

the change so that can raise probing questions.

Second, the Quantitative data is based on measurable results; the researcher will

conduct and adopt OCAI (Organisational Cultural Assessments Instrument) questionnaires for

the employees according to the sample size with regards that employees will be from different

departments to represent Kraft / Cadbury’s culture. OCAI questionnaire established by Cameron

and Quinn in 1999, it is composed of twenty four questions regarding culture; dominant

characteristics, Organisational Leadership, the management of employees, organisational glue,

strategic emphasis and criteria for success (Ramachandran, Chong, & Ismail, 2011) that will help

in assessing the research objectives and answer the research questions; each of the six

components of the OCAI assesses the four dimensions of the CVF, for example in the

organisation glue part in the questionnaire the researcher will know whether the company is

Clan, Market, Hierarchy or Adhocracy.

Moreover; Pushnykh and Chemeris agreed that “The OCAI method not only describes the

current organisational culture, but also assesses the aspiration and readiness of an organisation

to change this culture” (Pushnykh & Chemeris, 2006, p. 170). According to Cummings, the

advantages of the questionnaire that it encounters large number of people and the questions will

be fixed response that people can answer quickly and honestly without wasting their time

(Cummings & Worley, 2008).

The researcher encodes and analyse the data by using SPSS Statistics, version 16. The

researcher uses the factor analysis in order to discover the correlations of the hypothesis and the

questions as to know which dimensions in the OCAI prevails in the organisation (Costello &

29

Osborne, 2005). Factor analysis is very popular in the CVF research as many scholars conduct

their statistics by factor analysis to facilitate knowing which culture dominate than the other

(Helfrich, Li, Mohr, & Meterko, 2007).

3.6. The use of OCAI Questionnaire:

The OCAI questionnaire is divided into Now and Preferred divisions were employees are

required to state their agreements based on the six dimensions in order to explore the discrepancy

between the Now and Preferred culture. The OCAI Questionnaire will cross match the

interviewee’s answers as to ensure that there this congruence in both answers regarding

Kraft/Cadbury’s culture where both perceive the change positively or there is inconsistency in

the results. If the employees preferred culture were different from the Kraft/Cadbury’s present

culture therefore it could infer that the culture after acquisition was not preferred to the

employees. Therefore, it will facilitate the understanding of the researcher to plot the

organisation culture type on the CVF. The OCAI is valid and reliable as it is highly used by the

literature (Yu & Wu, 2009) (Lamond, 2003); and by adopting it will save time for the researcher

to allow more rooms for more research analysis.

The OCAI questionnaire is multidimensional scaling where it has two versions to

measure the CVF; first by the “ipsative” where it allows respondents to allocate 100 points

among the four questions in each OCAI dimension according to each question is similar to the

respondent. For example if the respondent score high in a question about the Clan culture so

he/she assign the question by 50, while assigning 5 point to the question that describes

Hierarchal culture. Therefore; by allocating the 100 points that at the end the total will be 100.

The second version is the “Likert scale” where respondents scale the four questions according to

30

the most similar to the respondents’ organisational culture; for example from one to five

(Helfrich, Li, Mohr, & Meterko, 2007). The research use the “likert scale” to allow respondent to

score based on strongly agree to strongly disagree.

3.7. Assessing the culture change in Kraft and Cadbury Acquisition:

The researcher will examine the cultures types of Kraft and Cadbury according to the

CVF, to understand where they stand in the CVF. By that the researcher will be able to detect

whether Kraft is more of clan than Market before and after the acquisition. If the two companies

have two different culture types so there will be culture incompatibility between the two firms

while if the two cultures are similar in degrees so there will be cultural congruence or cultural

fit (Cameron & Freeman, 1991). In addition; the research will examine the role of OCAI

dimensions on establishing organisation fit, cross culture management and the modes of

acculturations as literature clarified that (Vasilaki & O'Regan, 2008, p. 138) (Datta, 1991) (Zhu

& Huang, 2007, p. 41) (Nahavandi & Malekzadeh, 1988, pp. 82-83).

To conclude:

The researcher adopts the triangulation approach which is collecting from different

methods (quantitative, qualitative, and theories) to decrease from the research biases; thus

ensuring validity (Yeasmin & Rahman, 2012, p. 154). Therefore; by conducting the Quantitative

(from the analysis of the questionnaire) and Qualitative data (from the semi-structured

interviews); the researcher will analyse these data quantitatively through SPSS statistics so that

will allow the researcher to compare between the obtained data and the secondary data which are

the theories that the research conducts, as discussed in Chapter 2. Furthermore; the researcher

will consider the confidentiality and anonymity for employees and managers.

31

Chapter Four: Analysis and Findings

4

32

Chapter Four: Analysis and Findings

This chapter will be discussing the findings, interpretation and observations of

Kraft/Cadbury (Mondelēz International)1 from the interview held by the researcher with the HR

business lead manager Mrs. Sally Abououf who witnessed the marriage or the acquisition of

Kraft and Cadbury and from the results of the questionnaires answered by the employees across

departments. Moreover, these analyses will be compared to the literature. Therefore; this chapter

will identify whether the research hypothesis is true or not.

This chapter will be structured as follows; the analysis of the interview, type of

acquisition, acquisition strategy, observation of the researcher inside the company’s culture by

using Schein, and the questionnaire statistic analysis.

4.1. Interviews Analysis:

The researcher conducted two interviews with the Corporate Manager Mrs.Ola Loutfy

who was newly hired after the acquisition by two years, and with the HR Business lead Mrs.

Sally Abououf who has 13 years experience in the FMCG industry and has worked in the

organisation for 8 years. Mrs. Abououf has worked in both firms before the acquisition; first in

Cadbury and right before the acquisition worked in Kraft. Therefore; she highlighted on both

distinct Kraft and Cadbury’s cultures. Mrs. Abououf called the process of the acquisition “a

Harsh Journey to pass this stage” therefore the below paragraphs will explain how this harsh

journey was managed by the managers and employees and how the culture integration took place

(Abououf, 2013).

1 Mondelēz International: The name of Kraft and Cadbury after merge. The researcher mentions

“Mondelēz International” to refer to Kraft and Cadbury’s culture after acquisition.

4

33

First of all before exploring how the acquisition took place, we have to discover Kraft

and Cadbury’s divergent cultures. When asking the interviewee “what is Kraft and Cadbury’s

culture before the acquisition?” Mrs.Abououf answer was follows “both are different in the way

they work, both had different cultures where Cadbury’s dominant culture is purely Market, and

competitive oriented even in the workplace itself between the employees; contrary to Kraft’s

dominant culture was not competitive and more of family workplace oriented (Clan culture)”

(Abououf, 2013).

Why Kraft and Cadbury need such a change? Kraft was in need in this change

(acquisition) more than Cadbury, because Kraft was losing financially as Mrs Abououf clarified,

as well as the intension to enlarge its portfolio as stated in Chapter 3 (Riley, 2010) (Abououf,

2013). Thus Kraft was the Acquirer in order to save its organisation from bankrupt and Cadbury

was the Acquired firm as it is more productive and stronger competitor than Kraft.

Once the announcement of the acquisition took place; Cadbury’s employees were in

shock because they felt that their company is much stronger, successful and competitive than

Kraft which is losing financially. As a result; resistance from employees in both companies

thrived. “Blame was a virus in the organisation” as Mrs. Abououf claimed that both companies’

employees were blaming each other of any poor performance occurred in the organisation right

after the acquisition as there was no mutual trust between both cultures. As each party were

trying to prove that it is more successful than the other by raising the blames and this is

significantly related to the literature; in post-acquisition the two firms start to adopt “Them-Us

syndrome” as they generalise their differences and adopt the win-loss conflict strategy (Pikula,

n.d., p. 11).

34

Accordingly; resistance was highly evidenced in both companies in two things; first the

resistance of employees started from the minor changes they are forced to do, as for example

“changing their offices to new one” this means that employees were satisfied by their status quo

and do not want to unfreeze their present state. Second, employees were threatened and many of

them left the organisation. Kraft, as a result, has faced a lot of turnover after and during the

acquisition as Mrs. Abououf stressed that percentage of the turnover was around 50% of both

companies which was a huge threat for both companies’ employees and that is consistent with

the literature that highlighted that there are two reasons of turnover from post-acquisition are

either employees feel threaten of losing their position and the lack of culture or the organisation

decided to restructure the organisation (Krug, 2009, p. 4) (Datta, 1991). Both reasons applied on

Kraft/Cadbury as Mrs. Abououf claimed that the company also did layoffs to restructure the

organisation and recruited more than fifty new employees last year based on expertise in the

intention of organisation growth. Why would Mondelēz downsized when it is in need for

recruitment? The researcher can infer that Mondelēz intentionally downsized to recruit new

minds and to emerge new blood into the organisation and will not resist from the merge since

they are coming to a new culture.

4.1.1. How the Actions taken for cross-culture management / how the marriage took

place:

As stated above that there was huge resistance in both firms; therefore, managers were very

responsible and hide their resistance of the change in order to reinforce the change. Thus there

were actions taken to make a successful Kraft and Cadbury’s acquisition or marriage which are;

35

a) Hiring an external Organisational development (OD) practitioner to work with an

internal leader of change (the Managing Director of Cadbury),

b) Applying team building trainings and workshops,

c) Establishing regular town halls meetings with managers and employees,

d) Managers regularly announce the “quick wins”,

e) Generation of Hybrids of Appraisals, Rewards, structure of both cultures.

4.1.1. A. The role of leadership and OD Practitioner

Kraft and Cadbury used an external OD practitioner who is expert in inducing, motivating the

change to employees and making creative ways for change that will reduce any resistance. The

OD Practitioner of Kraft and Cadbury acted as an external eye or lens in order to reinforce the

change with the help of the internal leader who is the Managing Director of Cadbury

(Cummings & Wroley, 2008). Therefore; it shows how the acquirer (Kraft) firm did not replace

or deculturate Cadbury’s culture (by imposing Kraft’s culture) and that is evidenced on hiring a

leader for the change from Cadbury on Merit bases where merit means that it is based upon the

good performance (Gabris & Mitchell, 1985); and also the choice of the leader was a satisfactory

for Kraft employees. Thus this acquisition proved that hypothesis 1 is true which is “H1 is:

There is a significant relationship between organisational leadership and the effectiveness of the

acquisition”.

36

4.1.1. B. Teambuilding workshops

As discussed above that both cultures did not trust each other; that was evidenced in the

“Engagement Surveys” conducted to the employees, the Engagement survey is a cultural

workshop that tests the characteristics of the culture that the employees prefer to be applied in

the organisation. However; after the first cultural workshop, the results were not good and that

was because the lack of trust. Therefore; team building was an essential training for Kraft and

Cadbury’s acquisition as to familiarise both cultures with each other by having team building and

communication trainings. Yet it was an alert that drive the leader to communicate with all

managers of the organisation to conduct a communication and teambuilding workshops in order

to build trust.

Therefore the role of the leader was essential, because he was a Cadbury’s employee, he was

able to absorb all the frustrations and dissatisfaction of Cadbury’s employees as they feel more

experienced and productive than Kraft by attending the workshops to be updated with

employees’ changes and by conducting the Engagement survey after the teambuilding training to

know the consistency of the employees preferred culture; thus the role of the leader strengthen

Hypothesis 1 stated above.

According to Mrs. Abououf; Mondelēz applies a program called “Craft your way”. “Craft your

way” program is like coaching programs or on-the-job training. For example; if employees are

stressed, therefore there are coacher who mentor them to do work without stress. And if

employees want to learn something in work, he/she could be coached by the manager who is

expertise in what the employee wants.

37

4.1.1. C. The establishment of regular town halls meetings with managers and employees

After the Acquisition; the leader, the OD Practitioner, and managers agreed on establishing

regular meetings or conference as they call (Town halls) to all employees to update them about

the change because Cadbury’s employees tend to believe that the acquisition was not a good

decision as they did not see any benefits from the acquisition. The word “Town Hall conference”

is American term which means informal meeting for the public (English, 2000) thus it could be

inferred that Kraft imposed this type of informal meetings as it is a US nationality, accordingly

we could say that there is a balance of both culture interference as UK or Cadbury interfered by

its Leader of the change and Kraft or US interfered by the type of the informal meeting.

Therefore, managers decided to announce regularly some of the “quick wins” which is the

announcements of short-term success or wins of the organisation gained from the acquisition to

all employees in order to encourage them and let them feel that they participate in the change

thus they are trying to create a friendly culture (Goede, 2011) (Cuthbertson & Systems, n.d.).

4.1.1. D. A Hybrid Appraisals, Rewards, structure

Any organisation has its own structure, appraisals, and rewards. Therefore, the board of directors

of both companies decided to merge the best of each appraisals and rewards, in other words, to

get the hybrid of the best of both firms. However; the structure of both firms are similar or the

same as they both Matrix structure. Accordingly, the structure was matrix after acquisition and

that facilitate the management as one employee could be managed by two managers from Kraft

and Cadbury. This hybrid encourages board of directors to rename the company as

Mondelēz International and not Kraft and Cadbury to stress on the synergy and they are under

the umbrella of Mondelēz International. This new name will be officially changed in 2014.

38

4.2. Type of Acquisition:

According to Haung and Zhu’s model of cross-culture management discussed in chapter 2, both

culture form culture innovation as both amalgamate both difference and take the best. Therefore

they tend to make a hybrid culture or a third culture the fit with both firms. Accordingly the

acquisition go more than localising some of the acquired firm and go more of transplanting as it

created a new culture (Zhu & Huang, 2007).

Localisation Transplanting

Culture Innovation Evasion Tactic

4.3. Acquisition Strategy

Additionally Catwright and Cooper have discussed the four strategies of merger and

acquisition. As a result, Kraft and Cadbury adopted the Integration Strategy which also shed

lights on the culture innovation of Haung and Zhu’s model. As stated in chapter 1 the differences

of marriage either traditional or modern marriage, the Integration is the modern marriage

(Cartwright & Cooper, 1993, p. 66).

However, Kraft and Cadbury may be passed through the other strategies of Catwright

and Cooper at the initiation of the acquisition where both culture felt that the other culture will

adopt the deculturation strategy; therefore, there was separation strategy which is the

resistance and the by the help of the leader this strategy changed to assimilation (which is the

traditional marriage). Thus this Integration strategy could be called the “Collaborative

Merger” (Cartwright & Cooper, 1993, pp. 64-65). A prove of Kraft and Cadbury’s integration is

39

the formulation of and naming the company Mondelēz International rather than calling Kraft and

Cadbury

Therefore the hybridity of both culture appeared in using the best of each culture. As Kraft (US)

has a friendly culture thus it involved in establishing the informal town halls conferences, while

Cadbury (UK) focus on competition, productivity thus it involved by its motivated leader of

change.

4.4. Merger emotion syndrome model:

According to chapter 2 and the interview; the researcher applied the “Merger-emotion model”

proposed by Hunsaker and Coombs (1988, 60) as cited in (Pikula, n.d., p. 7). As the interviewer

found difficulty at the beginning in distributing the questionnaire to the employees and that is

because interviewee claimed that the employees are not in a stage to speak about the acquisition.

Therefore; the researcher could interpret that Mondelēz is in the liking stage but no yet enjoying

the acquisition thus ensures that the acquisition still is not strong enough to let employees talk

about it.

Figure 4:1

40

4.5. An inside observation on Mondelēz International’s culture using Schein’s

three levels of the Organisational Culture

As discussed in chapter 2 the 3, the levels of Edgard Schein that discover the inside

culture of any organisation. Therefore the researcher applies the three levels of culture on

Kraft/Cadbury’s organisational culture. When the researcher entered the company; first the

artefacts were shown in the public employees’ offices layout although the directors’ offices

were private yet they were designed in a way that does not isolate them from the rest of the

employees that is structured openly without doors. In addition to a “baby foot game” in the

centre of the office building, and also employees’ wear casual clothing even the managers;

therefore; these artefacts show how the organisational culture is informal. The second level

which is the values as it is written in Mondelēz International website that they value; “we are

open and inclusive”, “we inspire trust”, “we act as owners”, and “we tell it like it is” these values

ensure that Mondelēz International are very open, and participative (About Us: Our Values,

n.d.). The third level, the assumptions which is hardly known because this level could questions

what is not clearly stated as why both cultures behave in a friendly way and the simple answer

because they are Clan Culture because they behave in an open and flexible way.

4.6. Questionnaire Statistics analysis:

As discussed in the previous chapter that the OCAI questionnaire is distributed to the

employees and managers. The questionnaire was distributed among 60 employees and managers

but only received 31 valid answered questionnaires. The researcher assesses the validity through

the Cronbach's Alpha which is 0.670 and that shows the validity.

41

Case Processing Summary

N %

Cases Valid 31 100.0

Excluded 0 .0

Total 31 100.0

Reliability Statistics

Cronbach's Alpha N of Items

.670 48

Table 4:1

The researcher has used the SPSS Statistics version 16 to get the results of the Likert

scale questionnaires and by linking it to the interview questions, hypothesis and research

questions. By using the SPSS, the researcher collects the sum of all respondents to each culture

type (Clan, Adhocracy, Market, and Hierarchy) for now and preferred in order to know the

discrepancy between both. In addition to know which culture archetype of Kraft/Cadbury’s

dominant culture after the acquisition, the researcher divides the sum of the Now and Preferred

for each archetype to the total and then multiplied it by 100 % in order to plot the result on the

graph; as shown in the table below.

42

NOW

Sum Result

Clan 892.00 (892/3004)100 = 29.69

Adhocracy 705.00 (705/3004)100 = 23.46

Market 800.00 (800/3004)100 = 26.63

Hierarchy 607.00 (607/3004)100 = 20.20

Total 3004.00 100

Table 4:2

Preferred

Sum Result

Clan 881.00 (881/3016)100 = 29.21

Adhocracy 743.00 (743/3016)100 = 24.63

Market 832.00 (832/3016)100 = 27.58

Hierarchy 560.00 (560/3016)100 = 18.56

Total 3016.00 100

Table 4:3

Thereafter the results shown in the table above will be plotted on the graph shown in the

next figure. The researcher used a website that facilitates users to assess their organisational

culture by plotting the results to view the graph (Simon & Cozens, 2010). Therefore; the below

figure show the results of Mondelēz or Kraft/Cadbury’s organisational culture based on the 31

questionnaires respondents.

43

Figure 4:2

The graph above shows that Mondelēz has a dominant culture style of Clan by 29.69% and less

extent market culture style by 26.63% and low in Hierarchy culture style as it is 20.20%.

Therefore; it shows how the dominant culture becomes Clan as it is a hybrid from the

acquisition. Moreover the above graph answers the research question which is: “To what extent

does the organisational culture impact the acquisition?” the answer of this question is that the

difference between the percentage of Clan and Market is so small which is 3.06% and that means

(Simon & Cozens, 2010) http://www.simon-cozens.org/content/ocai-o-matic

44

that Kraft’s culture is the dominance is clan and then come the market of Cadbury’s culture thus

this shows how both culture synergistically integrated.

Moreover; another way to ensure that Mondelēz is a clan culture is by getting the Mean for each

Culture type (Clan, Market, Adhocracy and Hierarchy) as shown in tables 4:4 and 4:5 in the

Appendixes the Now and Preferred. In these tables; the standard deviation of the clan is the

lowest which means that there is consistency in the answers of the respondents in Clan culture;

however, Hierarchy culture has the largest standard deviation which means that there is

inconsistency in the employees answers where some stated that they agree and other disagree.

Therefore the highest consistency of the Clan culture were most of the employees strongly

agree/agree that their culture is friendly and team work.

Table 4:4 and Table 4:5 in the Appendix

Furthermore; the discrepancy of the Now and the Preferred is too low as at the table above the

mean of the Clan Now is 28.77 and Clan Preferred is 28.41 thus it shows how employees are

satisfied by their current culture.

When asking the respondents “Were you a Kraft employee / Cadbury employee / newly hired

after the acquisition” The answer was 76% were newly hired; thus this means that the newly

employees do not know the previous cultures of both firms thus they answered according to the

current culture of Mondelēz. As Mrs. Abououf claimed that they hired new applicants who have

the organisation fit with the new culture. Contradictory of some literature; Verburg identified

that after joint ventures companies tends to be overstaffed so they disregard new hires (Verburg,

1996, p. 522).

45

However; only who answered or added that they are from Kraft and Cadbury are seniors who

initiated and experienced the change and do not want to state that they are from specific

company as to stress on the integration and marriage that make them one company or one culture

and to remove the discrepancy between both.

Figure 4:3

46

As shown in figure 4:4; after selecting cases for those who wrote that they are from Kraft and

Cadbury were 4 seniors’ managers and directors.

Figure 4:4

47

Count

CLAN NOW * Number of years you have worked in this organisation

Cross- tabulation

Number of years you have worked in this

organisation

Total 1 1.5 2 2.5 3 4 5 6 8

CLAN NOW

Agree 2 0 0 0 0 0 0 0 0 2

Strongly

Agree 8 2 7 3 1 1 3 2 2 29

Total 10 2 7 3 1 1 3 2 2 31

Table 4:6

The table above shows that mainly the majority who answered strongly agree are 8 employees

in Clan questions of the six OCAI Dimensions are employees who worked 1 to 2 years. In

addition to the table above shows that the majority who answered the 31 questionnaires worked

also from 1 to2 thus this shows how the organisation was enriched by the newly employees who

are new bloods to the organisation and are able to be shaped to the new culture. To conclude; the

CVF statistics above may reflect that Kraft imposed its Clan Culture on Cadbury; however, by

using the factor analysis could either ensure that Kraft imposed its culture or Cadbury’s culture

was imposed and that answer the research question; “To what extent does the

acquisitions/integration impact the culture of Kraft and Cadbury?”.

Using the factor analysis statistics:

Factor analysis assesses the correlation between variables and the OCAI questions and answers

(Costello & Osborne, 2005). Therefore; the researcher has used this type of statistics that helps in

knowing which culture and dimensions of the OCAI is important to Mondelēz.

- The below Communalities table shows the 24 questions of the OCAI; however the researcher

took a snap shoot for the table that shows only 11 questions (the full table shown in the

48

Appendix). Each question’s initial valued by 1; means that if the extraction of a question is

nearest to 1 so that means this question is very related to Mondelēz and the acquisition; if

another question is far from 1; therefore, it is uncorrelated to Mondelēz. Thus in question 11

“The management style in the organisation is characterised by hard-driving competitiveness,

high demands, and achievement.” has high extraction which is 0.840 which means that the

management style of Mondelēz is correlated to Market or competitive culture that lead to

effective acquisition.

However the least is question 3 “The organisation is very results oriented. A major concern is

with getting the job done. People are very competitive and achievement oriented.” 0.59 That

means the dominant characteristics of Mondelēz uncorrelated to Adhocracy

Notice that this is a part of the factor analysis table (the whole table in the Appendix)

Table 4:7

49

Thereafter; the researcher encodes the Suppress Value to be less than 0.4 which

means that any question has value less than 0.4 will be excluded because it has low or no relation

to Mondelēz. As shown in table 4:8 in the Appendix the “Pattern matrix” which is similar to the

factor loading which means that the 24 questions are suppressed into 8 factors where each factor

includes certain questions (Items) that is correlated to the factor.

Table 4:8 in the Appendix

Therefore; the first factor represented in table 4:9 has 5 questions which have the highest %

of Variance which is 21.933 (in table 4:9 in the Appendix);

- The organisation is very results oriented. A major concern is with getting the job done. People

are very competitive and achievement oriented.

- The glue that holds the organisation together is the emphasis on achievement and goal

accomplishment. Aggressiveness and winning are common themes.

- The organisation emphasises acquiring new resources and creating new challenges. Trying new

things and prospecting for opportunities are valued.

- The organisation emphasises competitive actions and achievement. Hitting stretch targets and

winning in the marketplace are dominant.

- The organisation defines success on the basis of winning in the marketplace and outpacing the

competition. Competitive market leadership is key.

Accordingly the first factor include 4 Market items and 1 Adhocracy item thus the

researcher named the first factor Market

The second factor which the second highest factor after the first factor that has % of variance

10.677. The questions in this factor are;

50

- The glue that holds the organisation together is loyalty and mutual trust. Commitment

to this organisation runs high

- The organisation emphasises human development. High trust, openness, and

participation persist.

- The organisation defines success on the basis of the development of human resources,

teamwork, employee commitment, and concern for people.

Thus the second factor is related to Clan culture.

According to the literature; Leda Panayotopoulou, Bourantas & Papalexandris had used the CVF

and claimed that Clan and Adhocracy cultures are highly important for acquisitions as to be

flexible and willing to take risks (Panayotopoulou, Bourantas, & Papalexandris, 2003)

Table 4:9 in the Appendix

- The table below summing up the findings of the factor analysis of the pattern and total

variance table:

First Factor(Market) Highest dimensions

Dimension Culture Type

Dominant Characteristics

Market Culture

Organisation Glue

Criteria of success

Strategic Emphasis

Strategic Emphasis Adhocracy Culture

Second Factor(Clan) Highest dimensions

Dimension Culture Type

Organisation Glue

Clan Culture Strategic Emphasis

Criteria of success

Table 4:10

51

Therefore; the factor analysis proved that Kraft did not impose its own culture; however, there

was a balance between both cultures as it assures that there was an effective integration that

leads to effective acquisition; according to Rai Kraft was very ethical (third dimension Rai

proposed on CVF) in acquisition (Rai, 2011).

By applying the factor analysis on the Six Dimensions

Communalities

Initial Extraction

Dominant characteristics 1.000 .520

Organisation glue 1.000 .493

Organisation leadership 1.000 .641

Management of Employees 1.000 .419

Strategic Emphasis 1.000 .656

Criteria of Success 1.000 .732

Extraction Method: Principal Component Analysis.

Table 4:11

Therefore the highest correlated dimension in establishing effective acquisition of Kraft and

Cadbury is the Criteria of success that was proves above that the criteria of success was

correlated also with Market then Clan cultures.

Table 4:12 in the Appendix

52

Pattern Matrixa

Component

1 2

Dominant characteristics .511 .440

Organisation glue .654

Organisation leadership .799

Management Employees .608

Strategic Emphasis .704

Criteria Success -.560 .733

Extraction Method: Principal Component Analysis.

Rotation Method: Promax with Kaiser Normalisation.

a. Rotation converged in 3 iterations.

Table 4:13

- Thus the first factor which is the highest correlated dimensions that contributed to the

acquisition is (Dominant characteristics, Organisation leadership, Management Employees,

and Criteria Success)by 37.073 % of variance in Table 4:12 in the Appendix.

Research Hypothesis of the six dimensions of the Current or (Now) state in the Appendix:

H1: There is a significant relationship between organisational leadership and the effectiveness of

the acquisition; H1 is

accepted.

Table 4:14

53

H2: The compatibility of employee management of the OCAI will lead to a significant impact on

effective acquisition. H2 is accepted.

H3: There is a relationship between organisational glue and the effectiveness of the acquisition.

H3 is accepted.

54

The correlations above are interlinked with the literature that competition is very essential in all

firms in order to gain competitive advantages; therefore once a firm had competitive glue, thus

will impact on its employees and leaders (Barney, 1986).

H4: The congruence of the criteria of success is a dimension in OCAI in facilitating effective

acquisition. H4 is accepted.

This means that Mondelez’s employees believe and behave innovatively to successes thus the

criteria for success in by Innovation.

55

H5: There is a significant relationship between culture strategic emphasis and effective

acquisition. H5 is accepted.

Innovation is the strong emphasis in Mondelez

H6: The compatibility in the culture’s dominant characteristic is a barrier for effective

acquisition. H6 is accepted.

56

Therefore; H4, H5, and H6 shows strong correlation with Adhocracy. And that is normal

because the literature has identified that organisations have the 4 culture types in degrees.

H0: The incompatibility in the culture’s dominant characteristic is a barrier for effective

acquisition. (Not accepted with clan cultures)

As it is above 0.10 the significant level.

The researcher believes that because of the small sample size, it leads to different types of

culture as the Adhocracy culture. Thus the conclusion of the above correlation that there are

significant relations to Adhocracy and Market Culture

57

4.7. Relating Hofstede five dimensions to Kraft/Cadbury and the Egyptian Context “do UK

and USA differ in work in a host country?”

According to Hofstede the US

(Kraft Company) and UK (Cadbury

Company)’s cultures have some

similarities and slight culture difference

that might guarantee that acquisition

went smoothly. As shown in this

Figure; the two cultures are similar in

some dimensions thus it shows the

congruence in both cultures. However

in some dimensions, as the high

individuality of cultures are not applied

in Kraft/Cadbury’s organisational culture because they are collectivist that is similar to clan

culture. Therefore; the researcher can observe that because all of the 31 respondents coming

from the Egyptian culture (Host Country); thus their high collectivism supported in establishing

the Clan culture. To conclude the researcher agrees with the literature that USA and UK are

similar in the assumptions and values (Kashlak, Phatak, & Bhagat, 2009, p. 113).

To conclude;

After conducting the analysis; the researcher found that Kraft and Cadbury are clan and market

cultures based on the factor analysis and the CVF instrument Statistics. However; the correlation

Retrieved from: http://geert-hofstede.com/united-kingdom.html

Figure 4:5

58

shows differences and that is because of the small sample size that affect the outcome. The

researcher opinion that both firms have the intention to win/win solutions, as both impose the

best in each culture thus having synergistic culture to facilitate effective acquisition; but also

statistics and the interview showed that they still not in the stage to speak about the acquisition as

their emotions did not reached to enjoyment stage.

59

Chapter Five: Conclusion

5

60

Chapter Five: Conclusion:

5.1. Summary of the Findings:

The final chapter summarises and concludes the findings and outcomes. The results of the

culture of Kraft and Cadbury after the acquisition were both Clan and Market cultures. As the

CVF statistics showed that it is more of Clan than Market culture while the factor analysis

showed that it is more of Market than Clan culture. As highlighted in Chapter 4; before the

acquisition Kraft (US) was a Clan culture, while Cadbury (UK) was Market culture. Therefore

the researcher infers that after the acquisition both cultures integrate to reach to the results of

clan and market. Accordingly; this integration was opposite to the literature that no company

imposes its culture on the other (Shook & Roth, 2011). Since Mondelēz is clan and market

culture which is hybrid of both firms; thus, it answers the research question “To what extent

does the organisational culture impacts the acquisition?”; all employees working in Mondelēz

are Egyptian, which facilitates and ensures the presence of Clan culture; because Egyptians are

collectivism in Hostede’s dimensions as stated previous chapter that supported the presence of

Clan culture spontaneously.

Moreover the analysis of the correlations of the research hypothesis showed that there

are different correlations with different culture types such as Adhocracy culture. This could be

inferred by the researcher that as Helfrich, Li, Mohr, Meterko, & Sales identified that all

organisations have the four culture types but in degrees (Helfrich, Li, Mohr, Meterko, & Sales,

2007); thus the adhocracy culture is definitely correlated but in low degree. Another

interpretation that the correlations were not consistent as it shows no correlations with clan

because the sample size was too small that do not represent the whole population of Mondelēz.

5

61

Therefore; H1: There is a significant relationship between organisational leadership and

the effectiveness of the acquisition. This hypothesis is accepted, as there is strong correlation and

as identified in Chapter 4 where the effective role of the leader who was coming from Cadbury’s

market culture and helped in bridging the change, was identified. Thus it shows significant

correlations by 0.030 at 0.050 significant levels to Market Culture.

According to H2: The compatibility of employee management of the OCAI will lead to a

significant impact on effective acquisition and H3: There is a relationship between

organisational glue and the effectiveness of the acquisition. Both hypotheses are accepted ad

correlated with Market culture also as identified in Chapter 4; being a market culture is essential

in the agile market.

H4: The congruence of the criteria of success is a dimension in OCAI in facilitating

effective acquisition, H5: “There is a significant relationship between culture strategic emphasis

and effective acquisition”, H6: The compatibility in the culture’s dominant characteristic is a

barrier for effective acquisition. The last three hypotheses indicates the accepted correlation of

adhocracy culture and are null in correlation with Clan culture; however, in the researcher point

of view that Mondelēz has to be alerted by the third culture; as more different cultures interfere it

may leads to loss of culture identity in the organisation culture of Mondelēz thus creating chaos

(Weber, Shenkar, & Raveh, 1996).

The research objectives were achieved. One of the research objectives; “To explore the

reasons and components Acquisition takes place and its effects.” First; “the research explored

the reasons that Kraft for the acquisition”; to enlarge the portfolio and increase financially, in

addition to knowing the components of the acquisition that facilitates in achieving the

organisation fit between the two firms thus achieving effective acquisition. Clarifying the

62

objective of the relationship between organisation culture and acquisition was significant when

both firms have synergistic cultures as clan with market culture thus achieving smooth

acquisition. The actions taken facilitate the actions by the support of the leader, teambuilding

workshops; in addition to the researcher recommends additional actions for inducing the

acquisition as the presence of external eye as OD Practitioner to address the shortcoming that

insiders (employees and managers) may not be able to detect it.

Therefore; at this stage we could answer the research question “Did the cross-border

acquisition enhance the acculturation and fit between firms? The answer was clarified in

chapter 2 and 4 which is because of the acquisition let both firms married and acculturate both

culture by hybridity. Moreover; the research question “Are organisations effective with

congruent culture or incongruent cultures?” this question was evidenced in chapter 4 as it

shows from the statistic the incongruence of both firms’ culture that facilitate effective in

creating innovation in acquisition. Accordingly acquisition changed the mental models of Kraft

and Cadbury as they become integrated in both culture rather than only one thus this answers the

research question of “To what extent does the acquisitions/integration impact the culture of

Kraft and Cadbury?”

5.2. Limitations the research:

This research has limitations that affect its findings. First limitation, the questionnaire sample

was too small (31 respondents) because it was hard access to the employees as they were in rush

time. Second limitation; because the questionnaire based on non-probability sampling;

therefore, most employees who answered the questionnaire were newly hired thus they did not

witnessed the change. However; the researcher was targeting more seniors or employees who

experienced the change in order to discover the discrepancy between the now and preferred.

63

Third limitation; the researcher intentions to get the unobtrusive data (Mondelēz’s organisation

chart) to discover their structure and whether the top management of Mondelēz was by

Cadbury’s (productive) or Kraft’s (the acquirer) managers. However it was confidential for the

organisation to share it; therefore, the researcher preferred to ask about their structure and how it

affects the acquisition to reduce this limitation affect on the research.

5.3. Research Recommendations:

A recommendation for Mondelēz; First, the researcher recommends actions taken to sustain for

Mondelēz to regularly conduct culture trainings in criteria of success, strategic emphasis and

dominant characteristics (that scored significant correlation with Adhocracy) to assure that

Market and Clan culture are sustained. Second, since Mrs. Abououf claimed that the employees

in the stage to talk about acquisition; thus there must be trainings for employees to address their

cognitive dissonance as their reaction not like what they feel to enhance complete successful and

enjoyment emotions level of the acquisition.

5.4. Practical Implication: The CVF has to be revised:

As identified in Chapter 2 that the CVF missed Ethics as third dimension that Rai have added;

this dimension is important in acquisitions because organisations tend to go to unethical

procedures applied on employees without their consent as downsising (Rai, 2011, pp. 787-789).

In addition to that; some mergers and acquisitions cases; the acquirer firm tend to impose its own

culture on the acquired one without their consent; thus it is also unethical. Therefore; the

researcher believes that Ethics is essential that must be added and revised to the CVF.

64

5.5. Recommendations for Further readings:

This topic is significant in the literature and that because of nowadays frequent acquisitions held

in different industries that faced culture clash. Therefore; the researcher recommends further

readings for the types of resistance of employees and managers where the literatures call it “the

human side” and how it would recover in addition to studying on the employee’s motivations

(Pablo & Javidan, 2009). The second further reading; because the time limitation would not let

the researcher capable to discuss the essential role of leadership and the Organisation

development concept; therefore, this research suggests further readings about the role of OD

Practitioner who initiate the change creatively.

65

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Appendix

Tables in Chapter Four:

Table 4:4; Table 4 in Chapter4

NOW Descriptive Statistics

N Sum Mean Std. Deviation

Clan 31 892.00 28.7742 1.60644

Adhocracy 31 705.00 22.7419 3.83812

Market 31 800.00 25.8065 3.81593

Hierarchy 31 607.00 19.5806 4.95159

Total 31 3004.00 96.9032 6.74465

Valid N (listwise) 31

Table 4:5; Table 5 in Chapter4

PREFERRED Descriptive Statistics

N Sum Mean Std. Deviation

Clan 31 881.00 28.4194 1.47816

Adhocracy 31 743.00 23.9677 3.95377

Market 31 832.00 26.8387 2.20751

Hierarchy 31 560.00 18.0645 4.63994

Total 31 3016.00 97.2903 7.62974

Valid N (listwise) 31

Table 4:8; Table 8 in chapter 4

Pattern Matrixa For the 24 Items grouped into 8 factors that tests the current Mondelēz culture

Component

1 2 3 4 5 6 7 8

1-The organisation is a very personal place. It is like an

extended family. People seem to share a lot of themselves .693

2-The organisation is a very dynamic entrepreneurial

place. People are willing to stick their necks out and take

risks

.791

7

71

3-The organisation is very results oriented. A major

concern is with getting the job done. People are very

competitive and achievement oriented.

.421 .421

4-The organisation is a very controlled and structured

place. Formal procedures generally govern what people do. .859

5-The leadership in the organisation is generally

considered to exemplify mentoring, facilitating, or

nurturing.

.597 .451

6-The leadership in the organisation is generally

considered to exemplify entrepreneurship, innovating, or

risk taking.

.791

7-The leadership in the organisation is generally

considered to exemplify a no-nonsense, aggressive,

results-oriented focus.

.765

8-The leadership in the organisation is generally

considered to exemplify coordinating, organising, or

smooth-running efficiency.

.822

9-The management style in the organisation is

characterised by teamwork, consensus, and participation. .880

10-The management style in the organisation is

characterised by individual risk-taking, innovation,

freedom, and uniqueness.

.810

11-The management style in the organisation is

characterised by hard-driving competitiveness, high

demands, and achievement.

.456

12-The management style in the organisation is

characterised by security of employment, conformity,

predictability, and stability in relationships.

.843

13-The glue that holds the organisation together is loyalty

and mutual trust. Commitment to this organisation runs

high.

.858

14-The glue that holds the organisation together is

commitment to innovation and development. There is an

emphasis on being on the cutting edge.

.779

15-The glue that holds the organisation together is the

emphasis on achievement and goal accomplishment.

Aggressiveness and winning are common themes.

.826

72

16-The glue that holds the organisation together is formal

rules and policies. Maintaining a smooth-running

organisation is important.

-.671

17-The organisation emphasises human development.

High trust, openness, and participation persist. .526

18-The organisation emphasises acquiring new resources

and creating new challenges. Trying new things and

prospecting for opportunities are valued.

.542

19-The organisation emphasises competitive actions and

achievement. Hitting stretch targets and winning in the

marketplace are dominant.

.836

20-The organisation emphasises permanence and stability.

Efficiency, control and smooth operations are important. .606

21-The organisation defines success on the basis of the

development of human resources, teamwork, employee

commitment, and concern for people.

1.037

22-The organisation defines success on the basis of having

the most unique or newest products. It is a product leader

and innovator.

-.451 .779

23-The organisation defines success on the basis of

winning in the marketplace and outpacing the competition.

Competitive market leadership is key.

.610 -.440

24-The organisation defines success on the basis of

efficiency. Dependable delivery, smooth scheduling and

low-cost production are critical.

-.725

Extraction Method: Principal Component Analysis.

Rotation Method: Promax with Kaiser Normalisation.

a. Rotation converged in 17 iterations.

73

Table 4:9; Table 9 in chapter 4

Total Variance Explained of factor analysis of the 24 Items

Component

Initial Eigenvalues

Extraction Sums of Squared

Loadings

Rotation Sums

of Squared

Loadingsa

Total

% of

Variance Cumulative % Total

% of

Variance

Cumulative

% Total

1 5.264 21.933 21.933 5.264 21.933 21.933 4.012

2 2.562 10.677 32.610 2.562 10.677 32.610 3.243

3 2.478 10.325 42.935 2.478 10.325 42.935 3.108

4 2.096 8.734 51.668 2.096 8.734 51.668 2.113

5 1.627 6.779 58.447 1.627 6.779 58.447 2.494

6 1.502 6.257 64.704 1.502 6.257 64.704 2.721

7 1.242 5.177 69.881 1.242 5.177 69.881 2.346

8 1.121 4.672 74.553 1.121 4.672 74.553 1.849

9 .950 3.959 78.512

10 .817 3.403 81.914

11 .774 3.226 85.140

12 .713 2.971 88.111

13 .603 2.512 90.623

14 .444 1.852 92.475

15 .426 1.776 94.251

16 .365 1.520 95.770

17 .255 1.063 96.833

18 .211 .878 97.712

19 .163 .677 98.389

20 .125 .520 98.909

21 .094 .391 99.300

22 .078 .325 99.625

23 .057 .236 99.861

24 .033 .139 100.000

74

Table 4:12; Table 12 in Chapter 4

Total Variance Explained

Compo

nent

Initial Eigenvalues Extraction Sums of Squared Loadings

Rotation

Sums of

Squared

Loadingsa

Total % of Variance Cumulative % Total % of Variance Cumulative % Total

1 2.224 37.073 37.073 2.224 37.073 37.073 1.819

2 1.237 20.613 57.686 1.237 20.613 57.686 1.786

3 .775 12.911 70.597

4 .746 12.426 83.022

5 .591 9.852 92.875

6 .428 7.125 100.000

Extraction Method: Principal Component

Analysis.

a. When components are correlated, sums of squared loadings cannot be added to obtain a total variance.

Hypothesis Correlations in Chapter 4:

Correlations of Hypothesis 1; Accepted

organisational

leadership Market Now

Organisational leadership Pearson

Correlation 1 .389*

Sig. (2-tailed) .030

N 31 31

Market

Pearson

Correlation .389* 1

Sig. (2-tailed) .030

N 31 31

*. Correlation is significant at the 0.05 level (2-tailed).

Extraction Method: Principal Component Analysis.

a. When components are correlated, sums of squared loadings cannot be added to obtain a total variance.

75

Table 4:14; Table 14 in Chapter 4

Correlations of Hypothesis 3; Accepted

organisational

glue Market

Organisational Glue Pearson

Correlation 1 .322

Sig. (2-tailed) .078**

N 31 31

Market Pearson

Correlation .322 1

Sig. (2-tailed) .078**

N 31 31

**. Correlation is significant at the 0. 10 level (2-tailed). Table 4:16; Table 16 in Chapter 4

Correlations Hypothesis 2; Accepted

Managemen

t of

Employees Market

Management of

Employees

Pearson Correlation 1 .472**

Sig. (2-tailed) .007

N 31 31

Market Pearson Correlation .472** 1

Sig. (2-tailed) .007

N 31 31

**. Correlation is significant at the 0.01 level (2-tailed). Table 4:15; Table 15 in Chapter 4

76

Correlations of Hypothesis 4; Accepted

Criteria of

Success Now

Adhocracy

now

Criteria of Success Now Pearson

Correlation 1 .517**

Sig. (2-tailed) .003

N 31 31

Adhocracy Pearson

Correlation .517** 1

Sig. (2-tailed) .003

N 31 31

**. Correlation is significant at the 0.01 level (2-tailed).

Table 4:17; Table 17 in Chapter 4

Correlations of Hypothesis 5; Accepted

Adhocracy

Strategic

Emphasis

Adhocracy Pearson

Correlation 1 .505**

Sig. (2-tailed) .004

N 31 31

Strategic Emphasis Pearson

Correlation .505** 1

Sig. (2-tailed) .004

N 31 31

**. Correlation is significant at the 0.01 level (2-tailed).

Table 4:18; Table 18 in Chapter 4

77

Correlations of Hypothesis 6; Accepted

Dominant

characteristics Adhocracy

Dominant Characteristic Pearson

Correlation 1 .546**

Sig. (2-tailed) .001

N 31 31

Adhocracy Pearson

Correlation .546** 1

Sig. (2-tailed) .001

N 31 31

**. Correlation is significant at the 0.01 level (2-tailed).

Table 4:19; Table 19 in Chapter4

Correlations of Hypothesis 6; Not Accepted with Clan Culture

Dominant

Characteristic Clan

Dominant

Characteristic

Pearson Correlation 1 .000

Sig. (2-tailed) .998

N 31 31

Clan Pearson Correlation .000 1

Sig. (2-tailed) .998

N 31 31

Table 4:20; Table 20 in Chapter4

78

Gender: M/F Age: 20-30 30-40 40-50 50< Nationality: ...............................

Number of years you have worked in this organisation.............................................................................

Years of experience in the FMCG2 industry: ............................ Field of Study: ......................................

Position level: .......................................................... From which Department: .........................................

Did you live abroad before? ................................. If yes, how long? .........................................................

Were you a Kraft employee / Cadbury employee / newly hired after the acquisition

1. Dominant Characteristics Now Preferred

A The organisation is a very personal place. It is like an extended family.

People seem to share a lot of themselves.

B The organisation is a very dynamic entrepreneurial place. People are

willing to stick their necks out and take risks.

C The organisation is very results oriented. A major concern is with

getting the job done. People are very competitive and achievement

oriented.

D The organisation is a very controlled and structured place. Formal

procedures generally govern what people do.

2. Organisational Leadership Now Preferred

A The leadership in the organisation is generally considered to exemplify

mentoring, facilitating, or nurturing.

B The leadership in the organisation is generally considered to exemplify

entrepreneurship, innovating, or risk taking.

C The leadership in the organisation is generally considered to exemplify

a no-nonsense, aggressive, results-oriented focus.

2 FMCG: Fast-moving consumer goods industry

Dear Respondent, I’m a student in the British University in Egypt and I

am conducting a research related to my Dissertation for my Bachelor degree. I

would appreciate your help by answering the following questions. The aim of the

questionnaire to explore the culture congruence in Kraft Cadbury Acquisition

This information will be treated anonymously and will be used for academic

purposes only. Your answers will help the researcher a lot.

OCAI Questionnaire

- Please indicate your agreement to the statement of Now and Preferred state,

A. Strongly Agree B. Agree C. Neutral D. Disagree E. Strongly Disagree

79

D The leadership in the organisation is generally considered to exemplify

coordinating, organising, or smooth-running efficiency.

3. Management of Employees Now Preferred

A The management style in the organisation is characterised by teamwork,

consensus, and participation.

B The management style in the organisation is characterised by individual

risk-taking, innovation, freedom, and uniqueness.

C The management style in the organisation is characterised by hard-

driving competitiveness, high demands, and achievement.

D The management style in the organisation is characterised by security of

employment, conformity, predictability, and stability in relationships.

4. Organisation Glue Now Preferred

A The glue that holds the organisation together is loyalty and mutual trust.

Commitment to this organisation runs high.

B The glue that holds the organisation together is commitment to

innovation and development. There is an emphasis on being on the

cutting edge.

C The glue that holds the organisation together is the emphasis on

achievement and goal accomplishment. Aggressiveness and winning

are common themes.

D The glue that holds the organisation together is formal rules and

policies. Maintaining a smooth-running organisation is important.

5. Strategic Emphasis Now Preferred

A The organisation emphasises human development. High trust,

openness, and participation persist.

B The organisation emphasises acquiring new resources and creating new

challenges. Trying new things and prospecting for opportunities are

valued.

C The organisation emphasises competitive actions and achievement.

Hitting stretch targets and winning in the marketplace are dominant.

D The organisation emphasises permanence and stability. Efficiency,

control and smooth operations are important.

6. Criteria of Success Now Preferred

A The organisation defines success on the basis of the development of

human resources, teamwork, employee commitment, and concern for

people.

B The organisation defines success on the basis of having the most unique

or newest products. It is a product leader and innovator.

C The organisation defines success on the basis of winning in the

marketplace and outpacing the competition. Competitive market

leadership is key.

D The organisation defines success on the basis of efficiency. Dependable

delivery, smooth scheduling and low-cost production are critical.

Thank you for your time

80

Interview Questions

Interviewer: Yassmin Elemary

Interviewee: Mrs. Sally Abououf

Interviewee’s Position: HR Business Lead in Kraft/Cadbury or Mondelēz International

Topics discussed in the interview:

Culture:

1. Are you a Kraft employee or Cadbury?

2. How would you describe the culture of Kraft in terms of; Market (competition), clan

(friendly workplace), Adhocracy (innovative), and Hierarchy (rules and regulations)?

3. How would you describe the culture of Cadbury in terms of; Market (competition), clan

(friendly workplace), Adhocracy (innovative), and Hierarchy (rules and regulations)?

4. What is Kraft/Cadbury’s culture after acquisition?

For example the culture was first working individually and after the acquisition culture change

toward teamwork?

Training:

5. Is there were difference in training programs; performance management and recruiting

between both companies and you merge between them?

6. Is the name of the acquisition changed from Kraft/Cadbury to another one?

Structure:

7. What is the organisational structure of both cultures? Hierarchy or flat? If different

structure how they merge?

8. What is the structure now?

Culture change and resistance:

9. What are the difficulties faced during the merge?

10. Would you describe any of the difficulties as cultural? And how it is solved?

11. When top management/employees heard that there will be acquisition; did they

appreciate it or resist it?

12. If there is resistance; who are mainly resist employees or Top managers?

13. How did you orient the employees for such merge?

14. I heard that after the acquisition; there were turnover from employees; is that right? What

is the percentage?

15. What do you thing the reasons for the turnover?