Mergers although are great way for company to expand to new frontiers, it is a very risky
move to pursue for any business. Evans (2010) States in an article “It’s hard to name many
business transactions that are as risky and complex as Mergers and Acquisitions. Over
85% of M&A deals fail, according to a recent study on M&A outcomes by KPMG”. In this
we see Southwest and AirTran trying to merge in order to reach new key airports in the
US. The merge will give Southwest better presence in New York (La Guardia) Washington
D.C. (Ronald Reagan National Airport) and constant flights to the worlds busiest airport
Atlanta’s Hartsfield-Jackson Atlanta International.
Southwest has been characterized to have a different job culture than other competitors.
They have cultivated a corporate culture that focuses on employees and customers having
a good time while flying. Their training program is designed to socialize the new recruits
into its fun-loving culture. Hence, here is the challenge for this new merger. Here is when
the new company can fit in that 85% failure Mergers and Acquisition has according to
KPMG. How Southwest can absorb all AirTran employees and put them in their fun-loving
culture and hope everything works as planned?
Discussion Questions
1. Discuss the layers of culture that are evident in this case.
According to Li & Karakowsky (2001) “there are seven layers of culture, National level,
regional level, gender level, generation level, social class level and the corporate level. In
this case we can see the some of these “layers” are definitely present. The most obvious
would be the corporate level, since the case is based in two different corporations merging
in order to create a new company that will have more presence in the industry; it also talks
about the culture inside Southwest and all its employees.
The social class level, that is associated with educational opportunities and differences in
occupation, is present when talking about the different occupation employees have and
will have once the merger occurs. Mainly the article discuss about these two layers all over
the article and mostly the cultural corporate level.
2. What are the similarities and dissimilarities between the cultures, values and beliefs of
Southwest and AirTran airlines?
AirTran and Southwest both started as a low-cost airlines with almost the same business
strategy and beliefs. In order to get that low tier unexploited part of the industry they both
had to be a friendly open-arms company. These similarities will definitely help the merger,
