5 Star Electronics and Amtech Electronics both manufacture integrated circuits and other electronic parts as subcontractors for large manufacturers. Both 5 Star and Amtech are located in Ohio and often bid on contracts as competitors. As subcontractors, both firms benefited from the electronics boom of the 1990s, and both looked forward to growth and expansion. 5 Star has annual sales of about $100 million and employs 950 people. Amtech has annual sales of $80 million and employs about 800 people. 5 Star typically reports greater net profits than Amtech. The president of 5 Star, John Tyler, believed that 5 Star was the far superior company. Tyler credited his firm’s greater effectiveness to his managers’ ability to run a “tight ship.” 5 Star had detailed organization charts and job descriptions. Tyler believed that everyone should have clear responsibilities and narrowly defined jobs, which generates efficient performance and high company profits. Employees were generally satisfied with their jobs at 5 Star, although some managers wished for more empowerment opportunities. Amtech’s president, Jim Rawls, did not believe in organization charts. He believed organization charts just put artificial barriers between specialists who should be working together. He encouraged people to communicate face to face rather than with written memos. The head of mechanical engineering said, “Jim spends too much time making sure everyone understands what we’re doing and listening to suggestions.” Rawls was concerned with employee satisfaction and wanted everyone to feel part of the organization. Employees were often rotated among departments so they would be familiar with activities throughout the company. Although Amtech wasn’t as profitable as 5 Star, they were able to bring new products on line more quickly, work bugs out of new designs more accurately, and achieve higher quality because of superb employee commitment and collaboration. It is the end of May, and John Tyler, president of 5 Star, has just announced the acquisition of Amtech Electronics. Both management teams are proud of their cultures and have unflattering opinions of the other’s. Each company’s customers are rather loyal, and their technologies are compatible, so Tyler believes a combined company will be even more effective, particularly in a time of rapid change in both technology and products. The Amtech managers resisted the idea of an acquisition, but the 5 Star president is determined to unify the two companies quickly, increase the new firm’s marketing position, and revitalize product lines—all by year end.
1. Using the competing values model in Exhibit 14.4, what type of culture (adaptability, achievement, involvement, consistency) would you say is dominant at 5 Star? At Amtech? What is your evidence?
2. Is there a culture gap? Which type of culture do you think is most appropriate for the newly merged company? Why?
3. If you were John Tyler, what techniques would you use to integrate and shape the culture to overcome the culture gap?