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Protecting Brand Identity After a Merger 

April 14, 2023 by lowens   

By Stephanie Sabino

Stephanie Sabino, CDC Fellow Fall 2022

A successful organization depends heavily on its brand identity. It pertains to a brand’s outward appearance while also reflecting the purpose behind branding and the methods used by a business to take actions that will help create a particular  impression in the minds of customers. Nike’s “swoosh” or Apple’s “bitten-off apple” logos serve as examples of this. Strengthening a company’s brand identity helps to increase its reputation and market presence. The identities of the organizations involved are substantially affected when two or more businesses merge, leading to fears of identity loss on one or both sides and uncertainties about the identity of the new business, which may make it harder for people to trust and identify with the merged corporation. As a result, one of the most crucial duties on the plates of top officials is maintaining brand identity following a merger. It’s important to distinguish between identity and organizational culture. While “culture” relates to how a business is run and the cultural distinctions inside the organization, “identity” is more concerned with the nature of the business itself. When competitive firms merge, maintaining brand identity can be more challenging. This outcome is predicted given that individuals who previously competed with one another are now required to work cooperatively in a matter of seconds. If the merging firms served various market segments or clients, they would also need different organizational and managerial techniques. Not every managing board has the resources necessary to complete this role. How crucial is it to maintain the brand’s identity after a merger? It is of highest significance. 

Organizations that put off focusing on identity integration too long run the danger of experiencing internal crises and staff attrition. This might occur because, in spite of the companies’ similarities, each team inside each one may have been adopting a different set of tactics, leading to a disconnect between the teams and the organization as a whole. Not to mention that a lack of integration could harm their customer base and drive business to other competitors. Brand identity integration can be achieved through different approaches. In their paper “Making 1+1=1: The Central Role of Identity in Merger Math,” authors John Kimberly and Hamid Bouchikhi offer four potential approaches to achieve this goal: assimilation, confederation, federation, and metamorphosis. Assimilation is when one organization entirely adopts the functions and identity of the other. Both organizations can maintain their individual identities, titles, management systems, and autonomy in decision-making through confederation. Federation enables the joined organizations to maintain their individual identities while forging a shared identity that will enable them to prosper. Finally, a metamorphosis entails both businesses shedding their previous identities and forming a brand-new organization that didn’t exist before the merger. 

Which brand identity integration strategy is the most effective for a company? Depending on the particular traits of the organizations that are merging, this question would warrant a variety of answers. Although a more restrictive strategy, like assimilation, is certainly more economical, it can also bring difficulties because it calls for greater focus on identity-related concerns. Organizational executives may ultimately decide against merging brand identities altogether since they would find it more cost-effective to maintain both or one of the firms’ distinct identities rather than integrate them.


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