Cultural Differences in International Merger and Acquisitions

culture in mergers aquisitions

How Culture shapes Mergers and Acquisitions

Want to discover how organisational culture, cross-cultural issues and cultural differences shape the success or failure of mergers and acquisitions?

In today’s global economy more people are paying attention to the impact of culture on the international business environment.

Companies are crossing national borders more often now than ever before as part of growth strategies. As a result they venture into foreign countries...and cultures. 

One aspect of this global business is the phenomenon of "mergers and acquisitions" (also commonly abbreviated to M&A).

M&A are part of corporate strategies, corporate finances and management dealing through the sale, purchase or combining of different companies to help a business grow rapidly in its sector, location or a new country.

Many fail and many also succeed. But what accounts for the differences in these results?

Unfortunately there isn’t a clear recipe for success due to a huge amount of factors that come into play.

Some analysts emphasise the need for pre-merger preparations (KPMG, 2011). This includes analysing the potential benefits of the companies involved, common grounds, recognising the differences between the companies, thorough planning of the merger, etc.

Others stress the role of coherent and strong leadership (Able, 2007). They think that leaders are the ones, who contribute to success through setting the right priorities, motivating the employees and delegating responsibilities to the employees

This article aims to illustrate that culture is among the many factors impacting business performance on a global level. In this instance we do it through looking at the success and failure of international mergers and acquisitions; in another article we looked at the retail sector and how cultural differences impacted their business. In other articles and blog posts we look at other areas of business such as negotiation styles, presentations and even relationships. Culture impacts everything in business whether you know ir or not.

The article will show that an indifferent attitude to culture can be detrimental and cthat ulture is one of the important factors defining the success of the international partnership or its downfall.

We have provided seven M&A case studies below. Start with the Daimler-Benz article and at the end of it follow onto the article about Mitsubishi and then onto TATA and so on. The article's conclusion sits at the end of the last article.

Each of our case studies will give you a brief background to the companies involved as well as an overview of the cultural issues at play.

If you have any feedback on this article we would love to hear it! Please remember to share it if you like it.

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