To get real insights into a corporate merger, its best to go directly to the source. In this new case, Quy N. Huy, Associate Professor of Strategy and Management at INSEAD, and Ramina Samii, Research Associate, tell the story of the January 2000 merger of UK-based companies Stream and Line to create StreamLine, UK, providing an in-depth look into how management of emotions can facilitate the speed and success of a corporate merger.
The story is told from the perspective of new Sales Organization President, Anne Wright, who was an unexpected choice for the position. Wright faces the daunting challenge of bringing together two organizations with polar opposite cultures. Streams culture was reputedly cold, heartless, focused, committed, dynamic, and results/sales-oriented, while Line was known as a strong, friendly, community-focused company, profit-driven with process and career progression well developed, and rather gentlemanly in its approach. Even more telling were field sales force turnover statistics: 31% at Stream and 4.8% at Line compared to an industry average of 18%.
The authors follow Wright for a full year following the merger (which created one of the worlds largest high technology companies), recounting both the missteps and successes. Beyond culture differences Wright must deal with layoffs and office closures. (It was expected that the merger would eliminate some 7,200 jobs globally, 11% of the companies combined payroll of 64,800 employees.) Site selection for a new combined UK headquarters only added to the stress and mistrust amongst the two organizations.