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Bank Mergers and Organizations as Political Systems

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1. Bank Mergers

There has recently been a wave of mergers between banks such as JP Morgan and Washington Mutual, Wells Fargo and Wachovia, etc. What difficulties do you think the acquiring banks will face in the next few years trying to make these mergers work?

2. Organizations as Political Systems

There's a body of literature devoted to a concept called "Substitutes for Leadership". Basically, the idea is that organizations can develop a set of structural characteristics and cultivate characteristics in their members such that actual "leadership" on the part of particular individuals is either unnecessary or, in some cases, actually undermined. There are three sets, briefly:

Characteristics of Subordinates: Ability and experience, Need for independence, professional orientation, and Indifference towards rewards.

Characteristics of Tasks: Routineness, Availability of feedback, and Intrinsic satisfaction.

Characteristics of Organization: Formalization, Group cohesion, Inflexibility, and Rigid reward structure.

So - what do you think of this idea? Are leaders always really necessary, or can we make things work okay even if we don't have them? What sorts of situations might be helped by cultivating such a "substitute leadership" environment? Are there situations where this might be a bad thing? What about you personally - do you want a leader, or would you prefer essentially to be your own leader? It's one way to make organizations less political - but is it worth it? What do you think?

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Question 1

One of the challenges which I think the acquiring banks will face in the next few years in trying to make these mergers work is a seamless integration of the acquired and acquiring companies' organizational culture. Though both companies belong in the same industry, it does not mean that individually they have ...

Solution Summary

In about 200 words, this solution answers the questions of the challenges of acquiring banks and trying to make these mergers work as well as discusses the idea of substitutes for leadership and various situations in which substitutes for leadership can be a good thing or bad thing.