What are some of the post-merger problems that often come up?

Post-merger problems I would discuss as three kinds. The first is, it's a reflection of a pre-merger problem. It's typical. When we talk of mergers in the private sector, we call this "managerial hubris." People go in with very high expectations and the reality is of course not so. In other words, there are expectations of cost cuts or synergies which just don't pan out, which are just not possible. So you set it up to fail.

The second reason for merger failures is culture clash. You have a number of different organizations coming together and forming a new organization and each one of them has its own internal work environment, internal way of doing things, relating with one another, expectations about career progress, the way they relate with the outside world. And then you put them all together, sometimes the way Part A behaves is totally different from and in fact sometimes very opposed to how Part C may be doing things.

Then the tension that arises is: Whose approach is the right approach for the merged entity? Who's going to feel that their approach is being overwhelmed by others? That creates a tremendous amount of angst within these organizations.

And the third is that when you merge organizations together, you have a new structure and a new allocation of decision rights that takes place. Some people win and some people lose. In addition, there is a great deal of uncertainty who the winner and the loser will be. The net result is that there is a resistance that builds up to change, there is a sense of ambiguity about what your roles will be, there is politicking that takes place. There is a sense of winners and losers that develops and that creates a negative work environment.

Now we'll go to your question. So you are saying, in the Department of Homeland Security, how much of this do I see as a problem?

Yes.

I think they are all going to be problems. Merger integration takes a long time just to work through. So very often the real value of a merger begins to come through only after a certain period of time has elapsed, and if you will make any claim that by mooshing these together we will have quick, short-term results, then you are bound to end up disappointed.

So if a claim to make is that by putting everything together in Homeland Security, some magic solution will be found to a short-term problem -- such as that our war on terrorism will immediately show short-term success, I think that is a case of hubris. Because in the short term you are going to have a lot of dislocation, a lot of tension, a lot of jockeying for position, a lot of restructuring internal focus. So what one ought to say is that in the long run, perhaps, this will be a good organization. But if the logic given for a merger is short-term gain, then that's probably not the right way to do it.

If we're going to expect this merger to make us much safer in a year, that would be unreasonable?

That would be unreasonable. See, there are two sides to this coin -- one is safety and the other is the efficiency with which that safety is delivered. If you expect that you will be both safer and more efficient in delivering that safety within a year because of the merger -- no, that will not happen. In fact, because of all the difficulties related to mergers, you will have difficulties in short-term efficiency. It might make it more inefficient, and if you want to retain the same level of security or in fact increase it, you might have to pay a significant cost. But maybe in the long run it might make sense to put these things together, and there may be some overlapping functions that can be removed, there may be some economies of scale, but those benefits will begin to show in the long term.

The other thing you mentioned is the culture clash. Now I imagine the culture clash will be worse with these many organizations than with just two?

Especially if those organizations have been there for decades and decades. You should look at the names of the departments. One of their strengths has been that they have very strong distinguishing cultures. And you'll put them together and then what do you want? Do you want the whole department to have a particular shared culture? How much of a commonality will there be and how much of a difference? This will resolve not right away but over a period of time.

So what's your answer -- should the cultures assimilate?

The best thing is what we call "differentiation integration." There should be some commonalities and some differences. The last merger that took place in the government side was the Department of Defense. And basically there are differences between the Navy, Air Force, Marines, and there are commonalities also. But what happens is you evolve toward that after a period of time. You cannot order by fiat that this will be the common culture. Through people's interactions in working together and working through conflict a shared culture evolves.

So my answer to this is that the success or failure of the Department of Homeland Security will begin to be seen years from now, three years from now, five years from now. It's a gigantic Herculean task, to get it into a well-functioning efficient organization that delivers on the three dimensions that I mentioned -- economic, political and social welfare -- effectively.

Any claims or any measurements that are made short-term I think are bound to be negative.

Do you think because it's so difficult -- is it near impossible?

No, I don't think it is near impossible. I am not a government scholar, so it's an outsider's point of view, but I am somewhat convinced that there are some efficiencies and synergies possible. It might be useful to put things together. All I'm saying is, the merger is not an answer to short-term problems. The merger will not help the U.S. fight a better war against terrorism, as several politicians have said. It is maybe the most efficient way of organizing these separate departments, each of which is now at an efficient level of scale. Putting them together might make them more efficient, but that's over the long run. It's not going to have an impact in the short run.

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