In the year of 2016, AT&T , the world largest telecommunication company, first announced its $108.7 billion plan to merge with Time Warner, one of the largest mass media and entertainment conglomerate in the world. Three years of dealing with courtroom inquiry, overwhelming media coverage, devious competitors and skeptical stockholders, AT&T & Time Warner climbed its way to complete this blockbuster acquisition.
Meanwhile, government officials & law practitioners continued to voice concerns that the merger has challenged the concept of fair market & Anti-trust law to warn the public about the possible consequences of a new rising monopoly. On Feb 27th, 2019, the D.C. Court of Appeals rejected the U.S. Department of Justice’ appeal to unmerge AT&T & Time Warner.
All the dust seemed to be settled by then.
In most cases, the vertical merger of AT&T and Time Warner is like putting pearls and jade together – an excellent combination in which each party improves tremendously by associating with each other. With AT&T’s vast network & advanced information technology, let alone of its superabundant capital; Time Warner will gain an optimal platform for its world-class original contents. On the other hand, Time Warner & its subsidiaries including HBO will build a global subscription-powerhouse for AT&T which decisively determines the profitability of media-services companies in the era of entertainment & data-driven advertising. (Duberstein, 2018) At this point, Apple TV, Netflix, CBS, YouTube, and Hulu are major players in the field. HBO needs a wealthy alley to remain competitive, given the fact that HBO has a history of producing high-quality & expensive series. For AT&T, the acquisition of Warner Media means it will become the first U.S. telecommunication company who also owns a mass media and entertainment conglomerate. In the era of entertainment and convenience, customers love the idea of integrating and bundling. If AT&T were to put forwards an economic bundle with phone plans, internet, and HBO subscription, it will surely drive up profits and market share. To sum up, the merger between AT&T & Warner Media is a real WIN-WIN to both parties if handle correctly.
New Conflicts Arise
Nonetheless, the challenge now faced by AT&T and Time Warner is how to balance the power, interest, and other dynamics of different parties inside of their mega-corporation. First of all, it is the job of the management teams led by John Stanley & Randall Stephenson to decide how to mitigate the unavoidable clash of two distinct corporate cultures. According to a report of Bain & Co, culture clash is “the No.1 reason for a deal’s failure to achieve the promised value.” (Stafford & Miles, 2013) In other words, the success of the acquisition depends largely on how well the leadership group manages to ensure the fluid of creativity & efficiency.
Secondly, as two groups of employees gather under the same roof, the union of AT&T has to compose a new plan to accommodate new members. At this point, AT&T & its union is going through a lawsuit regards to the labor agreement between AT&T & Time Warner, in which AT&T agrees to allow Time Warner’s employees to join AT&T’s union. While AT&T insists the lawsuit should be dismissed since its factually inaccurate, the union leaders accuse AT&T of reneging the pact. (Eidelson, 2019) For the time being, the court has not made a decision yet.
Thirdly, whenever there is a merge happening, it rings a bell to current employees regarding to their job security. Understandably, AT&T will have to clear some desks to make rooms for employees from Warner Media, someone has to go. This not only affects junior employees but also to management in both companies. Some teams will have to dismissed due to business adjustments. Some senior employees and Vice Presidents will leave their posts. If so, people who report to those individuals are put into a disadvantaged position.
Therefore, we have designed our map to show the two major conflicts, which are arranged in order of priority in our research:
- The conflict between two distinct Corporate Cultures
- The Conflict between AT&T & its Union
A. Conflict Map & Narrative
Actors, structure, & Dynamics
To approach those conflicts, we identified 15 actors, which includes 11 primary actors, 2 secondary actors, 1 third-party interveners, 1 security enforcement, and numerous dynamics.
Since both of the conflicts we are trying to analyze occurred internally, primary actors mainly involve parties from AT&T & Time Warner. On the left & right side of the topic, we have John Stanley & Randall Stephenson, the CEO of Time Warner & the CEO of AT&T. In the case of this acquisition, those two key figures have a cooperative relationship with a mutual goal to generate more capital for the companies and themselves. If unfortunately, the merger ends up costing the company to lose capital, the relationship between Stanley & Stephenson is likely to change.
The CEO of a company reports regularly to the Board of Directors, who play a decisive role in making major business decisions like acquisition. Most importantly, if the company loses money due to the clash of corporate culture, they are the first ones who bear any major financial deficit. Additionally, when there’s a lawsuit between the union & the company, it is the Board of Directors’ responsibility to decide on a proper and timely response. Therefore, the Board of AT&T & the Board of Time Warner are no doubt the primary actors in this occasion. Other stockholders, as secondary actors, also can make an impact on the matter, nonetheless, their involvement is relatively indirect when compares to the Board of Directors.
Under the expectation & instructions of the CEO & Board of Director, the management team of AT&T & the management team of Time Warner need to make plans accordingly and delegate tasks to each employee to meet the targets. During the occasion of a culture clash, the management teams and the employees will, most likely, be among the first to deal with the conflict directly. If the management teams fail to address the clash adequately, employees will respond with lower morale and vice versa. Moreover, lower/higher morale will reduce/increase productivity of a team, which in turn, worsen/improve the quality of the product/content. When the customers become unsatisfied/satisfied with the service and content they receive, they will react by canceling/start/renew their subscriptions. As the number of subscriptions goes up/down, one of the most important economic factors – the profits of the company will decreases/increases, which will reflect on the financial statement of the company. After the banks, the public and the stockholders read the financial statement; they will determine how well the company is performing; the stock market, in turn, will adjusts the company’s stock price, the stockholders will again decide if they wish to sell/purchase more stocks. Consequentially, their reaction to the financial statement will make an effect on the public image of the company; which also discourage/encourage customers to make a purchase decision. At the end of the circle, the CEOs and Board of Directors will notice the rise/fall of their capital and make adjustments according.
Media, in both cases, plays a mixed role of third-party intervener. In the case of culture clash, the existence of media makes the conflict a topic for discussion instead of shutting down the debate, which provides extra emotional & psychological comforts to employees & managers. On the other hand, the media also supervises & forces the company to react on the conflict due to its public exposure. In the case of union vs. AT&T, the media draws the public’s attention to the matter, in a way, it protects the public, the union members & the AT&T company by preventing a one-side-story from dominating the issue. Therefore, we decided to classify media as a third-party intervener whose existence mitigates the conflicts.
The Court plays the role of the security enforcement in the union’s case with AT&T because it is the only party who has the final say after the conflict has been escalated and brought to trial. Besides, the court is supported by the nation’s machinery of violence to enforce its decision. In reality, the decision of the court will be influenced by public opinion. Therefore, we linked public opinion with the court to demonstrate their relationship.
D． Issue and Goals
Issues Goals
Two companies’ management team are used to their own working styles, AT&T is traditional, Time Warner is more creative. The goal of my research is to examine how they could utilize their own specific style in advance to cooperate rather than conflict.
Employee from both companies not well adapt to the new rules after merge, low morale and strike might occur. The goal of my research is to explore the employee’s actual working environment through this merge.
Customers are concerned about whether should continuing subscribe to their channels since this merge might not bring them better content with better pricing. The goal of my research is to understand what customers interests are and figure the possibility outcome with those two big firms.
AT&T union accuses AT&T that this merge disobeys the labor agreement. This goal of my research is to uncover the inside of AT&T and its union’s relations and in depth explore both groups’ expectations.
E． Methodology and Research Question
Narrative
1. Central question
What are the stories employees tell about after AT&T and Time Warner merged?
A. What similarities and differences exist in the employees’ working experience and personal lives?
B. What needs are/are not being met by Time Warner’s employee under AT&T’s management?
2. Central question
What are the stories customers tell about the products after AT&T and Time Warner merged?
A. What is the impact of merge and product change on consumers’ expectations and reviews?
B. What is the impact of merge on AT&T and Time Warner’s products design and content integration?
Chapter Two: Data
A. Main Data Source
https://www.torbenrick.eu/blog/culture/the-impact-of-organizational-culture-clashes/
B. Data Analysis
For this data Analysis assignment, we have chosen the Maslow’s Hierarchy of Needs to analyze a total of 261 Glassdoor reviews for WarnerMedia.
After carefully reading and analyzing all the first-person reviews, we have sorted the five most commonly mentioned complains from WarnerMedia employees. One thing to note here is that we put more weight on reviews posted after January 2018 (year of the merger). Then, we converted those five pieces of complaint into five underlying needs and put them into a pyramid-shaped diagram. In Maslow’s Hierarchy of Needs, the bottom layer represents the most fundamental & demanded the need of WarnerMedia employees, while the top layer shows their most transcendent and visionary need in the context of working at Time Warner.
In the case of WarnerMedia employees, the most fundamental needs for the majority of them are promotion & career advancement. Meanwhile, their most visionary need goes to a more progressive & innovative working environment. We were surprised that job security did not make it to the top.
The reason we have chosen Maslow’s Hierarchy of Needs is not based entirely on the method of exhaustion. Instead, we are very interested in learning the concerns & wishes of Warner Media employees after the merger. In our previous research, we have many hypotheses about their reactions to Culture clash & personnel changes. Maslow’s Hierarchy of Need, in this case, gives us a way to compare the result with our previous work, improving our understanding of the case scenario. Meanwhile, we are curious about what factors mattered the most to those who experienced the merger. Therefore, we must use a classification tool that organizes different types of needs. Plus, since we applied frequency in designing our tool, we can proudly say it is qualitative research with some quantitative merits.
While some may argue that frequency is not the best indicator of relative importance, nevertheless, we believe the same types of complaints do not get raised regularly by different individuals for no reason. In other words, frequency gives us a fair prediction of the employees’ perspectives. In practical, by learning their needs, we can discover the underlying problems. By discovering and studying the issues, we are one step closer to a practical solution.
Another advantage of using Maslow’s Hierarchy of Needs tool is visual. A colored pyramid-shaped diagram gives an evident demonstration of our contents. Due to its compact nature, we used short but well-crafted phrases, which means its more friendly to our viewers. For future presentations, I think our pyramid will be a piece of eye candy after paragraphs of words.
C. Literature Review
Social Theme
Based on the merit of social construction theory, we are all creatures of society. Inevitably, social factors including demographic location, family background, education, life-work balance, community life… All of those factors shape us into who we are. Human beings are social animals; therefore, we cannot escape from influences of the outside world. Whether you like it or not, other people’s actions will ultimately make an impact on your life. Therefore, we have decided to select Social as one of our major themes to explore. For AT&T and Time Warner employees, the corporate is a micro society. We will not be able to understand their experience without being aware of their circumstances. What shifts their decision? What is the group dynamic inside of those newly merged companies?
Social-cultural theory
Sociocultural theory both focuses on the critical contribution of society to individual development and emphasizes the interaction between developing people and the culture in which they live in. Sociocultural theory not only focuses on how adults and peers affect personal learning but also on how cultural beliefs and attitudes affect teaching and learning. People will have conflicts about tangibles and intangibles such as limited resources, titles, and class problems to maintain their privileges, power, status, and social position. Culture is socially inherited, shared, and learned the ways of living possessed by individuals in virtue of their membership in social groups. For the AT&T and Time Warner merger case, some older and senior AT&T management team might try to protect and limit access to their forms of capital, power, and resources in order to maintain the traditional hierarchical management style. The flexible employees of Time Warner might have very different interests. They prefer egalitarian and will do everything for future success based on democratizing and liberalizing conditions and stay creative. The new management team might be hard to integrate due to cross-culture differences and social environment conditions such as different communicating, evaluating, leading, deciding, trusting, disagreeing, scheduling, and persuading styles. For instance, whether individualism or collectivism; Indulgence or restraint of enjoyment; inner or outer direction of control; low or high rule complexity; tight or loose following of rules; confidence or modesty; egalitarian or hierarchical; linear-time or flexible time, etc.The social and cultural theory can enable us to study the culture and social factors of AT&T and Time Warner. If we could find their core conflict, we can analyze the cause and essence of the conflict through the social and cultural theory. We can compare the differences in culture and social conditions existing between the two corporations. Also, we can explore what kind of contradiction and conflicts will arise due to such different cultures and social conditions. Moreover, how their styles will be affected, will they be changed or remain the same.
Identity and intergroup models
The Common Ingroup identify model was proposed by Psychologists Samuel L. Gaertner and John F. Dovidio which seeks to understand and reduce intergroup bias. In its simplest form, the Common Ingroup Identify Model suggests that if members with different group identities learn to conceive their out-group individuals as part of their own group, the group boundaries between them will diminish, and be replaced by an incorporated membership identity. Gaertner and Dovidio refer to this process as recategorization.
I find the Common Ingroup Identify Model extremely relevant to our case scenario because it explains how group identity forms and dissolves. Meanwhile, it introduces a new approach to incorporating the outgroups into a larger group. In our case, Time Warner employees (outgroup) have to incorporate into AT&T (ingroup) due to the merger. In order to determine how well TW employees are fitting into AT&T is to look into group identities. Whether if we are starting to see some changes in how AT&T and Time Warner employees define group identities? do their attitudes towards each other become more positive, negative, or remain indifferent? The merit of the Common Ingroup Identify Model can help us understand employees’ perspectives in terms of the merger. On the other hand, it can help us to read our data more precisely. For instance, we will pay attention to words that indicate group membership. Are they using “we” or “they” when referring to the other party? What is the tone of their comments? If we put their words chronically, are we able to see a pattern that indicates a growing sense of group awareness? All of those signs will help us learn more about the employees’ response to the merger, and whether we can see a positive dynamic between employees from AT&T and Time Warner.
Power Theme
In Robert A. Dahl’s definition, “Power is the ability to get someone to do something he or she would not otherwise do.” Besides power as control, it is the ability to prevent things or make them happen, and the discretion to or not to act. The perspectives, power-over, and power-with, further improve on the basic understanding of the theme. While the power-over worldview assumes that it is control, coercion, fixed, and its relations tend to be unidirectional and intrinsically competitive, power-with viewpoint holds that it is harmony, expandable. Its relationships are bi-directional and potentially cooperative. The lenses of power-from and power-under, where the former refers to the capacity to force things to happen unilaterally, and the latter is an approach that centers on support from others also explores the theme. Power bases, including reward, coercive, legitimate, and expert power, present a significant premise for establishing relationships underpinning the power dependence theory. In our case of AT&T and Time warner merge, all the employees in both firms are under power control by both of the CEOs and forced to be working in an unfamiliar working environment. Nevertheless, the management teams also have their power to generate and supervise throughout the process of merging.
Power dependency theory
The power dependence theory, also known as social exchange theory, by Richard Emerson centered on power dynamics. It revolves around the concept of dependence with regards to power, its use, and related operations geared towards balancing it. It emphasizes mutual relationships as a means through which people come together, forming long-lasting exchange groups or relations. However, dependence inequalities are assumed to cause power imbalances. Power imbalances ultimately create social change and conflict among people. Thus, the central idea of the theory, mutual dependence, presents a lens through which the research study data can be interpreted to draw valid generalizations.
Overall, the theory draws from the power theme to present a premise pertinent to interpreting a given phenomenon through interactions of research study variables. The focus of data analysis and interpretation based on this particular theory is mainly on the relationships among study variables. As a result, the theory will inform the data interpretation process by compelling the researcher to assess the degree of power imbalances exhibited by the relationships among the study variables. Whereas power-balanced relations among variables established from the data recorded will produce healthy interdependence between the study variables, power-imbalanced associations will yield weak dependence, with much weight put on the less dependent variable. Therefore, the theory will offer a significant framework through which credible study conclusions will be drawn from the collated data.
Cultural Theme
The main issue between AT&T and Time Warmer, in our case, is the corporate culture clash. AT&T, as a traditional IT system company, has a very stable culture. Time Warner has a creative culture. Employees from both companies are having corporate culture conflict. They might also worry about if they will be treated fairly after the company’s merger completed. This is why we choose a cultural theme and think this is an important theme for our case. Organizational culture theory and the justice theory are theories we choose under the cultural theme.
Organizational culture theory
The organizational culture theory emphasizes the fact that culture involves a set of values and principles that a group of individuals or the organization have in common. The integral elements of the organizational culture affect structural stability, breadth, depth, integration, visible artifacts, behavioral norms, and the underlying assumptions taken for granted. The organizational culture theory in an institution revolves around the organizational efficiency as attributed by the values of the organizational leadership.
The organizational culture remains what identifies the collection of people and their response to changes as it influences every part of the organization despite an individual’s perception. Culture effectiveness is predicted in a group through an exhibition of typical behavior among people as their beliefs are made coherent, forming the long-lasting relations within a group (Das & Mohapatra, 2018). However, despite the cohesive relationship of ideas among group members, the culture renders the organization rigid and resistible to change as the group believes in a given set of values (Alvesson & Sveinsson, 2015). In the contemporary world, economic changes, for instance, are inevitable, and an organization must be flexible and ease of adopting change for it to remain relevant and financially viable.
The underlying beliefs, values, assumptions, and the way of interaction among the group of people creating an exceptional psychological and social organization presents an accurate lens for the research study and the data interpretation. These variables, therefore, help us assessing the extent to which organizational culture theory impacts the organizational efficiency, and stability. Flexibility among the organization’s cultural variables will lead to a more efficient and stable organization as compared to an intransigent cultural variable that will lead to an ineffective and unstable organization. All of these criteria will help us interpret our data in evaluating the overall efficiency of WarnerMedia.
Justice theories- Stanley
A Theory of Justice is a 1971 work of political philosophy and ethics by John Rawls. It is about fair and the problem of distributive justice. There are two principles of justice in this theory:
- “Each person is to have an equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all.”(Rawl, 2003)
- “Social and economic inequalities are to be arranged so that they are both:
a. To the greatest benefit of the least advantaged, consistent with the just savings principle.
b. Attached to offices and positions open to all under conditions of fair equality of opportunity.”(Rawl,2003)
Our case is about two companies merge together to become one company. AT&T and Time Warner are both big, famous companies with strong and different cultures. Both of them have a different management system and company tradition. Employees of both companies are worried if they become one company, it will be fair for them to keep their original position. They are also worried about since the management team change if it will be fair for both company employees. Which culture will the new company follow, and if the new company will be fair for both the ATT and Time Warner old employees? Will they be able to keep their original position? What will happen to them in the future?
D. Data Interpretation
Organizational Culture Theory
In our previous assignment, we ran a frequency analysis on a total of 261 Glassdoor reviews for WarnerMedia before and after the AT&T &WarnerMedia merger in 2018. The Merger came along with various concerns from the former and current employees of the company, concerning the “Organization fixed eyes on sales and profit” and the “ruining of the family culture” as well as the “Incompetent leadership and Culture erosion” as a result of frequent job lay-offs, management’s reckless shuffling, mistreatment, favoritism, and undermining the quality efforts of their employees as reflected from the review.
Analyzing the data from an Organizational Culture lens, the concerns, complaints, change in morale and attitude among the WarnerMedia employees could be associated with the impact of the Merger and the goal shift among the company management prioritizing on sales increase. The shift led to the automatic change of the company’s behavioral norms, values and beliefs as the administration became more oriented on achieving higher profits saving themselves of debt. The Merger, of course, led to the organizational expansion and more focus on company profits which is not a wrong move economically. Naturally, Human beings are not customized for change as we tend to become comfortable at the zones that we are used to. Therefore, since culture can be amended and newly adopted, the employees in the company and the new ones will adjust over time to the new management’s values, beliefs, and goals despite the individual cultural beliefs.
As the Organizational Culture Theory suggested, organizational efficiency largely depends on the value of organizational leadership. After the Merger, new management in place had fundamental financial goals that were supposed to be achieved – leading to a management shift. A factor that conflicts with the employee’s values, beliefs, and norms adopted before the Merger. – making it difficult for the management to integrate the new company principles to their employees leading to the WarnerMedia employee reviews and concerns as reflected by Glassdoor.
The Social-cultural Theory
In this assignment, our team decides to use social-cultural theory to interpret the data we collected for the AT&T and Time Warner merger case. The data we collected are from a total of 261 Glassdoor reviews for WarnerMedia. By carefully reading and sorting out all the reviews posted after January 2018, which is the year of the merger, we gathered a collection of data including reviewer’s opinions on the working environment, career advancement, and attitude towards the merger and the CEO. For example, we collected reviews such as “executive management in a major change mode” “With AT&T merger the culture is changing and not necessarily for the better.” We also applied frequency to analyze the data so that we can view the data in a better and more organized way. From a social-cultural lens, the concerns, uncertainty, and disapproval from current WarnerMedia employees can be explained as their reaction to the demographic shift. After such a huge merger, there are changing customs, values, behaviors, and priorities. It does not necessarily mean that the changes are negative though. The company is growing and is becoming more diverse. It might make some people feel uncomfortable and they might need time to adjust to the social-cultural changes. Since culture is socially inherited, shared, and learned by individuals when they are exposed in different social-cultural environment, it is unavoidable that people hold different social-cultural perspectives will react to the demographic shift in different ways. Former AT&T employees and former Time Warner employees used to have their own perspective working environment and culture. What’s more, there is also a distinction between legacy employees and new hires in terms of attitudes towards the merger. The new management team faces the challenge of integrating new teams due to cross-cultural differences and social environmental conditions. These are all possible factors and explanations to WarnerMedia employees’ reviews on Glassdoor.
E. Bridge to Intervention Strategies
(Group member’s writing sample,do not copy)
As much as AT&T and Time Warner would benefit from the merger, the sufferings and needs of the people from the bottom are largely ignored. Therefore, I think we should step in, as conflict experts, to pay more attention on people who are left out of the conversation. At this point of my conflict research, I have built a clear focus on junior-mid level employees who are, from my perspective, hit the hardest by the merger between AT&T and Time Warner. For those who are laid off, the main focus of my intervention strategies would be on how to help them navigate through, predicably, one of the more difficult time of their professional lives. For those who remain in the office, the best way to approach their needs is to help management to understand the needs of their employees. Additionally, additional trainings need to be put in place, so that management can learn how to navigate through a culture clash between two companies with diverges and distinct corporate culture.
References
Alvesson, M., & Sveningsson, S. (2015). Changing organizational culture: Cultural change work
in progress. Routledge.
Das, R., & Mohapatra, A. D. (2018). INTERLINK BETWEEN ORGANIZATIONAL CULTURE AND EMPLOYEE PRODUCTIVITY: AN EMPIRICAL STUDY.
Rawls, J. (2003). A theory of justice. Cambridge, MA: Belknap Press of Harvard University Press.
Duberstein, B. (2018). Revisiting AT&T’s Rationale for Buying Time Warner | The Motley Fool. Retrieved 27 September 2019, from https://www.fool.com/investing/2018/06/20/revisiting-atts-rationale-for-buying-time-warner.aspx
Eidelson, J. (2019). Union Says AT&T Reneged on Pact from Before Time Warner Deal. Retrieved 27 September 2019, from https://www.bloomberg.com/news/articles/2019-07-18/union-says-at-t-reneged-on-deal-made-before-time-warner-merger
Shaban, H. (2018). It’s not looking great for the Justice Department’s appeal of the AT&T-Time Warner merger. Retrieved 27 September 2019, from https://www.washingtonpost.com/technology/2018/12/06/its-not-looking-great-justice-departments-appeal-att-time-warner-merger/
Stafford, D., & Miles, L. (2013). Integrating cultures after a merger. Retrieved 27 September 2019, from https://www.bain.com/insights/integrating-cultures-after-a-merger