The impact of corporate culture on international M&As

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The impact of corporate culture on international M&As

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Title: The impact of corporate culture on international M&As
Operationalizing corporate culture
Author: Brøste Olsen, Carina; Roy-Bonde, Alexander Peter
Abstract: A large number of international mergers and acquisitions have failed for no apparent reason. Most of these mergers seemed sensible in terms of strategy and finance. However, after completing the mergers it was found that profit was negated or even destroyed due to a lack of focus on the cultural fit between the companies involved. This paper proposes a framework for analyzing the cultural dimensions of a merger process. We have elected to focus on two dimensions as determinants for corporate culture: organizational structure and values. Furthermore national culture is seen as an underlying influence on these determinants. Together these dimensions describe how a company will react in a given situation providing a measure of predictability to the merger process. By being able to predict the reaction of a company we can identify factors that are important to manage in order to fully realize the potential of a merger or acquisition. Inherent in a merger or acquisition is a strategic consideration of how such a deal will benefit the companies involved. In our paper we have examined the strategic motivations and aspirations which the companies have for the merger, and concluded that these factors in combination with the corporate culture create an individual scenario unique to each merger. In order to apply our findings practically we have conducted case studies on the acquisition of Zanussi by Electrolux and the merger between Daimler-Benz and the Chrysler Corporation. Through the use of primary and secondary sources we have investigated culture and how the companies involved have dealt with obstacles in relation to cultural dissimilarities. Based on these findings we have provided some general guidelines to what is important when merging across borders. Our primary case is the acquisition of Metalock Denmark A/S by the MAN Group and was conducted in order to validate the applicability of our framework in a contemporary setting. Our analysis enabled us to determine how the acquisition process has proceeded so far and to predict how further integration of the two companies should be managed in order to minimize resistance to change.
URI: http://hdl.handle.net/10417/382
Date: 2009-05-18
Pages: 118 s.
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