The marriage of America Online Inc. and Time Warner Inc. will be one of "high-fives and hugs" all around, Time Warner Chairman Gerald M. Levin promised last week as he and AOL Chairman Steve Case announced their monster deal.
And so far, Case and Levin have oozed cultural sensitivity toward each other's empires, adopting each other's styles of dress at public appearances and playfully browsing through AOL clothing at the company store in Dulles.
But the actual combining of two distinct corporate cultures is often a messy, difficult process that if not done well, can leave employees on both sides frustrated and demoralized, undermining a merger's potential, experts have found.
The messages from Case and Levin have reassured some AOL employees, who don't sound worried that the button-down culture at Time Warner will change the open-collar style of AOL.
Heather Perram, director of special programming for AOL, has worked with employees of Time Warner's People magazine for the past two years and already sees them as co-workers.
"Our colleagues at People . . . their jobs are really familiar to us," she said, adding, "I don't think it seems like a clash of cultures."
Whether or not AOL and Time Warner can prevent a culture clash remains to be seen. The differences between the companies range from who gets stock options to who gets free Cokes at staff conferences.
But as the experiences of some employees at MCI WorldCom Inc. and Mobil Corp. suggest, this will be no easy task.
Many former MCI Communications Corp. employees say they barely had time to recover from their acquisition by WorldCom in 1998 before getting word they might soon have to absorb the employees of Sprint, which would be the newest addition to the former WorldCom if regulators approve.
One worn-out MCI WorldCom sales representative said when the Sprint merger was announced last year, "my heart just sunk."
Although their companies' integration is just beginning, some Mobil employees also worry that life under Exxon Mobil is going to be decidedly different.
When Mobil promoted Charlie Champagne to his current job at the end of 1997, the company moved him and his life partner, John Barnes, from Philadelphia to the District.
The company helped them sell their house in Philadelphia, paid for the two of them to move, and found them their current home.
"Mobil relocated us . . . as if we were a married couple," said Champagne, a planner in the U.S. marketing and refining department. A year ago Mobil announced it would extend benefits such as health insurance to same-sex domestic partners. "The culture at Mobil was somewhat highly evolved for the industry," he explained.
Exxon's $81 billion acquisition of Mobil has meant new policies from the Exxon Mobil headquarters in Texas. The company has announced it will no longer extend benefits to new employees' same-sex domestic partners, except in countries where same-sex marriages are legally recognized. Champagne and other former Mobil employees can hold on to their current benefits, however.
But more important to Champagne is the appearance of a broad change in climate. For 10 years he and Barnes have attended corporate functions together and been friends with Champagne's bosses, both feeling completely at ease.
"We're not sure what that's going to be like" in the future, Champagne said.
Ask any employee to describe his company's culture and he can usually toss off some vague descriptives--progressive, entrepreneurial, hierarchical, rigid.
Such terms, however fuzzy, often stand for deeply held attitudes about an employer and a way of life inside a company, said Toby Tetenbaum, a human resources consultant in New York who has helped companies through mergers.
"If you define culture as people's beliefs and values . . . you're talking about changing . . . the deepest elements of what these people are about," Tetenbaum said.
To Stephen Von Rump, former MCI data services marketing chief, his company's acquisition by WorldCom created wrenching changes in culture and business operations.
"The organization was just wrung out," said Von Rump, who left MCI WorldCom shortly after the merger, when his stock options vested.
"There was a lot of trepidation," Von Rump said. With major organizational decisions looming--for instance, who would run the business markets, national accounts or mid-market sales?--big questions cropped up about [then MCI president] Tim Price's future at the new firm, and which corporate culture would prevail. Price announced last month he will leave the company in February.
MCI's culture "really evolved out of Tim's own personality, his own charisma," Von Romp said. The mentality was very customer focused, and authority to act was pushed far down the ranks. "People weren't afraid to take actions," he said.
Some MCI employees found WorldCom's style to be far more regimented than they were accustomed to, with authority closely held at the top, according to many former MCI employees.
One former MCI senior vice president, who requested anonymity, recalled working with his WorldCom counterpart as a logistical nightmare. "I had . . . quite a bit of latitude [at MCI]," he said. "My counter at WorldCom had to get written authorization to fly to Dallas to see me."
"We coexist in my segment," said the unhappy MCI WorldCom sales representative, who put her resume on the job search Web site Monsterboard.com as soon as MCI WorldCom's acquisition of Sprint was announced.
The tight control on pricing margins for salespeople frustrates many of the MCI people, she said.
Whereas MCI used to allow sales managers leeway in pricing, giving salespeople more control in cutting deals with prime customers, WorldCom does not allow the same flexibility, she said.
WorldCom representatives declined to discuss cultural differences within the company.
Clearly, WorldCom's lean and aggressive culture was highly regarded on Wall Street, resulting in a stock market valuation that enabled it to buy MCI. The fringe benefits that former MCI executives have lost following the merger, including limousine rides from airports, were considered extravagances at WorldCom.
"WorldCom could afford to have that [leaner] style because they didn't go after the complex customers," said Frank Dzubeck, president of Communications Network Architects in Washington. While WorldCom focused on business users, MCI "paid a very big price" to keep residential customers happy. "Now you have WorldCom getting the benefits," Dzubeck said.
Part of WorldCom's culture is its sharp focus on its bottom line and stock price, a view that frustrates many MCI alums who see their cubicle neighbors get rich, said the sales representative.
"A lot of the WorldCom upper management has thousands upon thousands of options," she said, as do many of the sales reps, "and that didn't happen at MCI." The feeling, she said, is that the WorldCom people are simply "waiting to vest out," and don't care about much more than the money.
"It's not a happy place," she said of her office, shortly before answering a phone call from a colleague looking for leads on a new job. Since being interviewed for this story, the employee has left the company.
An MCI service technician in Northern Virginia said the WorldCom attitude on customer service upsets him and other former MCI people, especially those on the service side.
"The mentality [of the] MCI folks and the legacy WorldCom folks is quite different," he said. To him, the WorldCom people are "young, arrogant, and they only care about one thing and that's the money."
He conceded that at one time, "MCI was young and probably just as arrogant."
Part of whether employee egos get bruised in a merger depends on the signals executives send, which is why scenes such as Case and Levin comfortably joking around in the AOL company store have an impact.
"I admire the entrepreneurial culture he has fostered at Time Warner, which will complement our own," Case wrote of Levin in a memo to employees, setting a tone of acceptance he wants them to follow.
CAPTION: Steve Case told AOL employees he admires Time Warner's culture.
CAPTION: Heather Perram, right, is AOL's director of special programming and Jimmy Lynn is director of account services.