Examples Of Multi Cultural Acquisition

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CULTURE FACTORS COMBINING CULTURES SUCCESSFULLY Booz, Allen and Hamilton (1985) revealed a study of European CEO’s, that the ability to successfully integrate an acquired organization is one of the most important determinants of acquisition performance. In international acquisitions, integration problems due to different organizational cultures are often aggravated by differences in national cultures. Therefore, international acquirers often experience a “dual cultural clash” as argued by Larsson and Risberg (1998: 45). An example of a dual cultural clash can be found in the acquisition of the Spanish Sociedad Española de Automóviles de Turismo S.A. (SEAT) by the German Volkswagen Group in 1987. Because of Volkswagen’s management underestimated…show more content…
Consequently, it provides an opportunity for cooperation and socialization among key managers from both organizations, and may increase their commitment to the post-acquisition integration strategy. Similarly, a type of control is mentioned by Larsson and Lubatkin (2001). These authors found that successful international acquisitions can be achieved through social controls which are the amount of coordination and socialization efforts undertaken by a foreign acquirer. Clearly, when an organization is in control and using types of control that create commitment, trust and cooperation among the combined workforce is likely to result in successful cultural combination in international acquisitions. Creating a Culture of…show more content…
Cultural differences reflect the manner in which decisions are made between the firms. Similarly, two companies which are in the same industry don’t mean they got the same culture. Organizational culture is a combination of an organization's values, beliefs, traditions, and priorities that helps determine and legitimize what sort of behaviour is rewarded in an organization. As differences in national cultures can be argued to be the only difference between a domestic and an international transaction, Björkman et. al. in Stahl & Mendenhall (2005) states that it has become an issue of special attention when looking at cross-border M&As only. National cultures are mental programmes that affect the way humans think and act. As a result, the differences between them will create problems when humans interact. Moreover, national culture affects management concepts and techniques which mean that companies in different countries will have different performance measurement systems, different reward systems, and different staffing policy. In fact, the more different the national cultures are, the more problems it will cause (Björkman et. al. in Stahl & Mendenhall,
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