Can JPMorgan-Bear marriage work?

By U.S. News & World Report

JPMorgan Chase's Fed-led Bear Stearns bailout was intended to save the financial markets, but it remains to be seen whether JPMorgan can save the firm.

As the two banks prepare to merge, the collision of corporate cultures promises a considerable challenge for Bear employees.

It is certain that those at Bear Stearns (BSC, news, msgs) who survive the merger –- and many are expected to lose their jobs -- will have a different corporate culture to understand, says Jacalyn Sherriton, president of Corporate Management Developers, a specialist in post-merger consulting.

The companies certainly have different histories. While Bear had managed to remain independent throughout its first 85 years, JPMorgan Chase (JPM, news, msgs) is the product of multiple mergers: Chemical Banking, Manufacturers Hanover, Chase Manhattan, JP Morgan, First Chicago, and Bank One all have become one under the JPMorgan Chase name.

Bear Stearns's culture stood out on Wall Street, says Rick Peterson, a recruiter for the brokerage industry.

The firm catered to very-high-net-worth clients, and individual brokers were able to move quickly on clients' requests, Peterson says. On the other hand, like other U.S. banks, JPMorgan tends to be "extremely cautious, ultra-conservative" and bureaucratic.

"JPMorgan expects its employees to do as told, when told," Peterson says. "Bear Stearns brokers are not used to being told anything. They're used to doing the telling themselves."

The accomplishments or qualities that organizations reward in their employees tend to be very telling of their cultures, Sherriton says. Some companies reward employees who toe the line, while others reward entrepreneurship.

Nomi Prins, author of "Other People's Money: The Corporate Mugging of America," worked at Bear Stearns for seven years and, in a recent story for Mother Jones magazine, describes it as "a colorful place" that was generally considered by employees and outsiders to be a firm that didn't fit the mold.

"It was the oddball amongst investment banks from the standpoint of 'corporate culture' -- a 'maverick,' the Wild West of banking," Prins writes. "We actually left our desks to eat lunch. Some of the sales force drank theirs."

In an interview, Prins said Bear's culture prized directness. "You kind of did things, as opposed to talked about doing things," she says.

Her time at Bear was followed by a stint at investment bank Goldman Sachs (GS, news, msgs), a place that, for better or worse, relied more on meetings. Prins withholds judgment of either culture but admits she never became totally comfortable at Goldman and suspects Bear employees may have a difficult time transitioning to another firm.

While some Bear brokers are looking to jump ship, Peterson says, others will stay at JPMorgan to test the firm's new culture.

JPMorgan reportedly will continue using the Bear Stearns name and keep Bear brokers separate from its own high-net-worth group. Top Bear brokers were offered a retention deal aimed at keeping them with JPMorgan.

Mergers can require such flexibility from employees that it's not unlike starting a new job, says Jim Stern, Sherriton's colleague at Corporate Management Developers and the consultancy's vice president. How staffers are held accountable can be a major difference between companies. Some employers keep workers on a short leash by docking pay and cutting bonuses, while others tend to be more laissez-faire.

"Unless you're able to conform to that new culture of accountability, you're not going to be successful," Stern says.

The post-merger environment can be tricky to navigate for any company. Consider the much-watched YouTube video of a Bank of America (BAC, news, msgs) corporate gathering in 2006, following the bank's merger with MBNA.

An employee expertly croons U2's "One," albeit with somewhat altered lyrics. The verses, an awkwardly forced celebration of bank unity, include such phrasing as: "One spirit. We get to share it. Leading us all to higher standards."

When JPMorgan CEO Jamie Dimon addressed Bear Stearns employees recently, he did not serenade them, but he did ask for their support.

This article was reported and written by Liz Wolgemuth for U.S. News & World Report.