Research Study on "effect of Acquisition on Organizational Culture"

INTRODUCTION

Company description:

MG & Co CPA was a privately held Accounting firm in San Diego, CA specializing in sophisticated auditing & tax practices with an annual revenue of $1 to 2.5 million and a workforce of approximately 15 to 25 employees. In 2017, it was acquired by one of the nation’s 60 largest accounting firms Finsquare. Finsquare has a nationwide presence and a combined operating experience exceeding 75 years. It provides high-end litigation support, bankruptcy, financial planning, tax, accounting and consulting services to closely held businesses and SEC companies, their owners, and middle-to-high net worth individuals.

Issue description:

Certain elements of the Finsquare - MG & Co management and work culture differed sharply that required workforces to be united at various levels of activity and responsibility. Differing work culture and work expertise caused friction between both sides; this situation was exacerbated by the maintenance of the fiction that the amalgamation was a merger of equals. It was nothing of the sort as the bigger firm had a significant hold on the management. Finsquare has a fast-paced and dynamic business style that contrasted with the routine and systematic business that MG & Co’s employees used to follow. MG & Co employees were dissatisfied with how the management & coworkers disregarded their concerns and didn’t take any proactive measures to foresee or to circumvent cultural difficulties that undoubtedly presented themselves.

Approach:

To diagnose the problem, we interviewed two point of contact (POCs) from MG & Co, and took feedback using survey forms from other employees. We then used the data from the interviews

and survey to analyze the culture issues in the merged organization. Using the levers of organizational culture, we identified core problems in the organization and devised feasible solutions.

Hypothesis:

Development and training for adaptation of employees in new work/organizational culture should be one of the priority in the M&A process which was ignored. The employees reported that neither the managers nor the employees from MG & Co were made aware of the job expectations they were supposed to deliver at Finsquare which created ambiguity. Distinctive styles of motivation and incentive pattern led to the feeling of dissatisfaction and insecurity of job among the employees of acquired firm.

METHODOLOGY

As it pertained to assessment of culture, we favored the method of surveys and questionnaires. The case study is on a CPA company that went through an acquisition a year ago. Our major point of contact