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CHAPTER 14: SHAPING CULTURE AND VALUES 429
Culture gaps can be immense, particularly in the case of mergers. Consider
what happened after Chicago’s Tribune Co. (Chicago Tribune) acquired Times
Mirror Co. (Los Angeles Times). People at the Times consider the Chicago Tribune
a provincial newspaper and see their new owners as bean-counters in business suits
who care little about journalistic excellence. Many people at the Tribune, on the
other hand, think the Los Angeles Times is arrogant and spoiled. The two sides have
battled in particular over whether to focus on local news, which the Tribune does,
at the expense of national and international coverage, which the Times considers
essential. Trying to merge the two widely different philosophies and cultures has
exacerbated the troubles both companies were having prior to the acquisition.
“It’s a tragic, bad marriage,” said Times former editor Dean Baquet. 20
Despite the popularity of mergers and acquisitions as a corporate strategy,
many fail. Almost one-half of all acquired companies are sold within fi ve years,
and some experts claim that 90 percent of mergers never live up to expectations.
21

One reason for this is the difficulty of integrating cultures. Organizational leaders
should remember that the human systems—in particular, the norms and values of
corporate culture—are what make or break any change initiative. The problem
of integrating cultures increases in scope and complexity with global companies
and cross-cultural mergers or acquisitions.
The High-Performance Culture
Culture plays an important role in creating an organizational climate that enables
learning and innovative response to challenges, competitive threats, or new op-
portunities. A strong culture that encourages adaptation and change enhances
organizational performance by energizing and motivating employees, unifying
people around shared goals and a higher mission, and shaping and guiding em-
ployee behavior so that everyone’s actions are aligned with strategic priorities.
Thus, creating and infl uencing an adaptive culture is one of the most important
jobs for organizational leaders. The right culture can drive high performance. 22
A number of studies have found a positive relationship between culture
23
and performance. In Corporate Culture and Performance, Kotter and Heskett
provided evidence that companies that intentionally managed cultural values
outperformed similar companies that did not. Some companies have developed
24
systematic ways to measure and manage the impact of culture on organizational
performance. At Caterpillar Inc., leaders used a tool called the Cultural Assessment
Process (CAP), to give top executives hard data documenting millions of dollars in
25
savings they could attribute directly to cultural factors. Even the U.S. govern-
ment is recognizing the link between culture and effectiveness. The U.S. Offi ce
of Personnel Management created its Organizational Assessment Survey as a
way for federal agencies to measure culture factors and shift values toward high
performance. 26
Strong adaptive cultures that facilitate high performance often incorporate
the following values:
1. The whole is more important than the parts and boundaries between parts
are minimized. People are aware of the whole system, how everything
fits together, and the relationships among various organizational parts.
All members consider how their actions affect other parts and the total
organization. This emphasis on the whole reduces boundaries both within
the organization and with other companies. Although subcultures may
form, everyone’s primary attitudes and behaviors reflect the organization’s
dominant culture. The free flow of people, ideas, and information allows
coordinated action and continuous learning.