The Breakdown

The merger where Amazon acquired Whole Foods should have been a match made in heaven. However, the two companies had different cultures. Amazon had a "tight" company culture which was very strict, required adherence to rules and upholding traditional culture. People in this culture prefer strict leaders with a top-down managing style. Whole Foods was the opposite with a "loose" company culture, valuing creativity and 'breaking the rules'. People in this culture prefer collaborative leaders who give their employees the power to make their own autonomous (independent) decisions.

The two cultures clashed when the companies merged. Amazon employees felt like their control was being threatened. Their new colleagues from Whole Foods kept making decisions on their own instead of simply doing as they were told. On their other hand, Whole Foods employees felt their autonomy (independence) was threatened. They were so used to coming up with their own ideas and could not understand why Amazon did not listen to their proposals.

Summary: Why did Amazon and Whole Foods have problems when they merged? What resources were the fighting for?

Roots of Conflict

Social identity theory suggests that we categorise ourselves according to the social groups we belong to (eg. gender, football team, nationality, religion). We tend to have similar values to those in our in-group and each group may have it's own culture. This tendency leads us to treat members of our in-group with more respect (in-group favouritism) and our out-group with more prejudice (negative out-group bias).

Realistic conflict theory suggested that when two groups are competing for resources, this further increases prejudice. The study is also supported by findings in the Robber's Cave Experiment. In the experiment, normal boys from similar backgrounds were split into two groups for a summer camp and each group formed a culture and identity of their own. When the two groups competed for prizes in various games, there was a great deal of intergroup conflict.

Application: How can each of the theories and studies of prejudice can explain the cause of conflict in mergers?

Reducing conflict

In the Robber's Cave Experiment, two groups of boys at a summer camp fought each other when the groups were put in competitions for prizes. However, the Robber's Cave Experiment also showed that the boys became friends after working together to solve problems that needed all of them to cooperate (superordinate goals).