Clash of Cultures: Analyzing the Newell Rubbermaid Merger Case Study

This case study analyzes the merger of Newell and Rubbermaid, highlighting the clash of organizational cultures and its impact on employees. The assignment explores the differing organizational structures, employee perceptions, attitudes, and team dynamics before and after the merger. It examines the necessary motivational strategies for both Newell and Rubbermaid employees, considering their varied reactions to the merger. The analysis delves into the decision to eliminate jobs and the rationale behind it, evaluating alternative approaches to cultural integration. The solution proposes strategies for moving the new company forward, emphasizing the importance of cultural fit, communication, and a phased approach to integration, with a focus on employee well-being and team cohesion. The assignment concludes by suggesting additional steps to minimize culture clashes and maximize the chances of a successful merger, including surveys, communication plans, and a focus on cultural alignment.

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Clash of the Cultures: The Case of Newell Rubbermaid
Brenda Carmie Sagmit
Continuing Education, Bow Valley College
HRES 9101: Organizational Development
Professor Margaret Holden Scott
October 10, 2020

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Clash of the Cultures: The Case of Newell Rubbermaid
Describe the organizational style (structure) of each organization. What areas might be a
good match and what areas were clearly not a good match?
Newell Company was a low-cost, high volume supplier while Rubbermaid was a consumer-
oriented innovator. They have a good match in terms of the products that they sell. They both
sell household products through essentially the same channels (Corbett et al., 2007, para. 28).
However, they don’t match in terms of bases of competition. Corbett et al. (2007) noted that
Newell emphasized on low cost production while Rubbermaid competed on innovation and
brand. They don’t match in terms of their production processes and costs, as well as their value
propositions.
What perceptions would employees from each organization bring to the merger? How
could those issues have been avoided or minimized with prior planning?
For Newell employees, their perceptions about the merger is more on the positive side. They
perceived that their company is growing and as such, merger is necessary for the growth and
development of the company. It may also mean a career opportunity for them.
However, Rubbermaid employees will have negative perceptions. First, they perceived that
Rubbermaid will not survive if the company with not merge with Newell Company. Second,
they perceived that their job security is now at risk because they are not sure if Newell will
absorb them or lay them off. The third one is the perception that there will be a drastic change in
operating model and culture which “creates vast organizational anxiety about the future”
(Kaetlzer et al., 2019, para. 1).

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With prior planning, these issues could have been avoided or minimized because effective
communication helps shape employee perceptions, address organizational issues, and could
preserve the real essence of the merger.
What attitudes and emotions would employees from each organization bring to the
merger?
Newell employees will be happy about the merger. They could see it as an opportunity for
growth. However, with the clash of cultures, fear may be possible also.
Rubbermaid employees, on the otherhand, will experience stress, fear of job loss, negative
competition, low morale, fight or flight attitude, anger, sadness, feeling betrayed or others might
have mixed feelings of happiness and sadness. And if the merger is not properly communicated,
they might even resist with change as such can make the merger as failure.
What team structures do you expect each organization had before the merger? Why?
Before the merger, Newell’s team consist of highly motivated and focused individual especially
for divisional managers because they knew that they will be paid well once they reach their
target. According to the research of Fry (2000), “the divisional management operated in a
goldfish bowl under high pressure, but they are paid well for meeting their targets (p. 3).
However, Rubbermaid’s team have “voracious appetite for growth” because of their unrealistic
and extraordinary financial targets (Fry, 2000, p.4).

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What team structures do you expect each organization had after the merger? Why?
After the merger, Newell’s team stay the same. They will still be focused and highly motivated
with their targets. They will also be motivated of the opportunity for growth because of the
merger.
Because of the merger and knowing they are the smaller company in terms of the merger which
means bigger chance of being laid off, Rubbermaid employees might not have a team already but
a mere group of people only wherein “their performance is just a summation of each group
member’s individual effort” (Barcik, 2015, 01:09). Whereas a team, “the individual efforts
result in a level of performance greater than the sum of those individual inputs” (Barcik, 2015,
02:24). The group is no longer as motivated and engaged as before. They may even resist
change by being unproductive and unengaged.
What would be needed to motivate employees from each organization? Would they be the
same or different? Why?
Different motivation should be given to Newell and Rubbermaid employees because they don’t
have the same attitudes and behaviors regarding the merger. For Newell employees, just same
motivation as before which is higher pay whenever they reach the targets. And probably,
motivate also to be better to get to another level in the organization.
And for Rubbermaid employees, since they feel insecure, stressed and having low morale, Ikin
(n.d.) noted ways that “leaders can do to lead effectively and to keep employees motivated and
engaged” (para. 7):

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1. Communication. Changes and decisions should be communicated as openly and
honestly as possible because if employees are well informed, the negative rumors that can
crush morale and productivity will be avoided. Moreover, communication help shape
employee perceptions, address organizational issues and the real essence of the merger
will be preserved.
2. Team cohesion. Support employees’ cohesion through team building and ensuring
strong working relationship. The stronger the camaraderie within the group, the better
they can cope up with stress.
3. Psychosocial wellbeing. To cope with stress and other emotional issues, have a positive
culture of health and wellbeing, encourage employees to speak up if they feel stressed or
need support, and have systems in place to provide support such as peer support
networks, Employee Assistance Programs (EAP), and health and wellness programs.
4. Goals and milestones. Give employees specific, measurable, attainable, relevant, and
time-based (SMART) goals and key milestones. Be sure to celebrate on a timely basis if
goals or milestones were achieved. Praise employees also for their individual
contributions for the over-all success of the organization.
5. Rewards and recognition. People will feel a greater sense of value, self-worth and
confidence if appropriate and meaningful rewards are given. It does not have to be a
grandiose, a simple word of appreciation, encouragement or gratitude sometimes means a
lot for an employee already.
6. Resilience. Employees should be supported to develop the capacity to be adaptable,
flexible and responsive to work demands. To be resilient, teams should focus on
collaboration, mutual trust, respect and shared norms.

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7. Fun and enjoyment. Positive environment that leads to greater productivity will be
created if employees are permitted to have fun and enjoyment aside from focusing on
work. It will also lessen the stress that they feel regarding the merger.
8. Cultural integration. Strategies should be in place to successfully merge the cultures of
each group which will result to adoption of a set of shared values and practices. Hence,
culture clash can be avoided.
Was the elimination of jobs and “starting over” the right move? Why or why not?
Yes, elimination of jobs and “starting over” is the right move especially when cultural
integration is impossible to achieve already. But it should be the last resort, never the first. And
since two unsuccessful CEO attempted to change things around without laying off employees,
then eliminating jobs and “starting over” could be the last resort to change the culture of newly
merged company. It is important to change the culture because workplace culture “links
company culture with things like employee engagement, happiness, productivity, retention rate
and positive recruitment efforts and more” (Schuneman, 2019, para. 5). In other words, the
previous workplace culture is no longer keeping the employee engaged or happy or productive,
and to change this culture, we need to have a new set of culture, and the last option to solve this
issue is to change the employees. With new employees, new sets of culture will arise… a culture
that is aligned to the company vision, mission and goals.

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Based on the two different cultures, what would you have done to move the new company
forward? Why? What would the benefits and drawbacks been to your solution?
Since Newell Rubbermaid was named in Fortune as the number 7 “Most Admired Company” in
the home equipment and furnishings category last 2010, it means the changes implemented were
harsh but helped the company to move forward, and so I would have done the same thing too.
However, I will add extra procedures in the merger process in order to avoid or at least minimize
the culture clash and hopefully eliminate the step of laying off and “starting again” move. And
these are:
1. Both companies should have “determine whether it’s a good cultural fit” (Insperity, n.d.,
para. 5) through surveys, leadership interviews or focus group. It is best if they both try
to find out first before closing the deal, if one’s culture is a close match to the other and if
not, is one or the other willing to change for the better. Cultural alignment is a step that
should not be ignored in the merger process because if two cultures are incompatible, this
can cause merger to fail as culture has an impact on employee engagement, happiness,
and productivity.
2. Both companies should have “build a communication plan” (Insperity, n.d., para. 10)
because a clear and thoughtful communication helps ease concerns, distrust and
resistance from employees as they go from the unknown to known.
As noted by Insperity (n.d.), “mergers and acquisitions can fail for a variety of reasons, but two
you can’t afford to ignore are poor culture fit and human capital issues” (para. 2).

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References:
Barcik, R. (2015, June 8). Teams vs Groups (Video).
https://www.youtube.com/watch?v=mnzhWAaFAjw
Corbett, A., Harding D., Lemire, C. (2007, January/February). Deals Done Right. Ivey Business
Journal. https://iveybusinessjournal.com/publication/deals-done-right/
Fry, J. N. (2010, January 11). Newell Company: The Rubbermaid Opportunity. Richard Ivey
School of Business
Ikin, H. (n.d.). How to Keep Employees Motivated During Mergers, Acquisitions and
Restructures. Optimise Consulting. http://tmsconsulting.com.au/blog/employee-motivation-
during-mergers-and-restructures/
Insperity. (n.d.). Preparing for A Merger or Acquisition: Here’s What You Can’t Ignore.
https://www.insperity.com/blog/preparing-for-a-merger-or-acquisition-heres-what-you-
cant-afford-to-ignore/
Kaetzler, B., Kameron, K., O’Loughlin, E., Van Oostende, M. (2019, December 5). Managing
and Supporting Employees Through Cultural Change in Mergers. McKinsey & Company.
https://www.mckinsey.com/business-functions/organization/our-insights/managing-and-
supporting-employees-through-cultural-change-in-mergers#
Schuneman, F. (2019, March 14). The Importance of Workplace Culture. Invista Performance
Solutions. https://www.invistaperforms.org/the-importance-of-workplace-culture/