Cultural Integration Challenges
Group L , MBA (PT)
Cultural Integration Challenges
Group L , MBA (PT)
2
Cultural Integration Challenges
“Frequently, when a foreigner violates a key
cultural value, he or she is not even aware of
the violation, and no one brings the matter to
his or her attention.”
• once a visitor makes a major mistake it is
frequently impossible to rectify it
• it may well take several months to realize
that polite rejections really signify isolation
and banishment
Group L , MBA (PT)
Cultural Integration Challenges
“Even genuinely small cultural mistakes can
have enormous consequences.”
Group L , MBA (PT)
Cultural Integration Challenges
“Knowing a country’s language, although clearly
helpful, is no guarantee of understanding its
cultural mindset, and some of the most difficult
problems have been created by individuals who
have a high level of fluency but a low level of
cultural understanding.”
Group L , MBA (PT)
Cultural Integration Challenges
“Moreover, members of a culture tend to
assume that highly fluent visitors know the
customs and rules of behavior, and these
visitors are judged severely when violations
occur.”
Group L , MBA (PT)
Do Cultural Differences Matter in M&A?
Lots of Anecdotal Evidence Showing Negative Effects
Another drug industry mega merger goes bust:
Clash of cultures kills Monsanto-AHP marriage.
T. Burton & E. Tanouye, Wall Street Journal, October 14, 1998
Every CEO who has been through a cross-border
merger says he knew culture was going to matter
but did not realise how much.
C. Firstbrook, Head of Strategy Europe, Accenture, Financial
Times, July 31, 2008
It’s difficult enough for two domestic firms with
markedly different cultures to combine. But in a
cross-border context, opportunities to misunderstand
and disagree multiply like weeds.
R. Bruner, Harvard Business Review, May 2004
Group L , MBA (PT)
Culture Counts
and
it counts quite a bit
Group L , MBA (PT)
MULTICULTURAL
MANAGEMENT
Group L
(MBA PT 2007-10)
07 MAR 2010
Group L , MBA (PT)
The Group
Abhishek Kumar
Amit Gulati
Arindam Das Gupta
Babu Gurucharan
DS Dahiya
Girish Chand
Kapil Gupta
Kailash Chauhan
Kuldeep Singh
Manish Aggarwal
Mukul Kamble
Naresh Kumar
Nimisha Trikha
P S Pentle
Ravi Makhija
Samrat Patnaik
SK Chauhan
V S Sivasubramanian
Vishal Ranjan
Group L , MBA (PT)
(S-76)
(N-3)
(N-74)
(S-15)
(S-82)
(S-78)
(S-89)
(N-79)
(S-79)
(S-80)
(N-78)
(N-76)
(S-38)
(S-75)
(N-49)
(S-74)
(S-64)
(S-68)
(N-69)
Culture
Culture means the whole set of social norms and responses that
conditions a population’s behavior. Culture makes one social
environment different from another and gives each a shape of its own.
Culture is acquired and inculcated, it is a set of rules and behavior
patterns that an individual learns but does not inherit at birth. The
process of learning a culture pattern is called enculturature.
Group L , MBA (PT)
Management Perspective Terpstra & David (1985)
Culture is a learned, shared, compelling,
interrelated set of symbols whose meaning
provides a set of orientations for members of
a society. These orientations taken together,
provide solutions to problems that all
societies must solve if they are to remain
viable.
Group L , MBA (PT)
Why Study Culture ?
One’s management skills improve with an understanding of the culture
influences that affect colleagues and employees.
Helps to be a successful negotiator
Successful strategic alliances
Lead and manage effectively – understand cultural expectations that
influence people’s behavior
To avoid cultural shock
Group L , MBA (PT)
How cultures view each other
Stereotyping – assumes that all people within one
culture or group behave, believe, feel and act the
same.
Ethnocentrism – occurs when people from one
culture believe that theirs are the only correct norms,
values and believes.
Self-reliance criterion – assumption that people in
another culture will behave like people in your culture.
Group L , MBA (PT)
Cultural Values
USA
Japan
Arab cuntries
Freedom
Belonging
Family security
Independence
Group harmony
Family harmony
Self-reliance
Collectiveness
Parental guidance
Equality
Age / seniority
Age
Individualism
Group consensus
Authority
Competition
Cooperation
Compromise
Efficiency
Quality
Devotion
Openness
Go-between
Hospitality
Group L , MBA (PT)
Inspiration
“If you want to move people, it
has to be toward a vision that’s
positive for them, that taps
important values, that gets
them something they desire,
and it has to be presented in a
compelling way that they feel
inspired to follow.”
— Martin Luther King Jr.
Group L , MBA (PT)
Inspiration
“In this multicultural world, thanks to the success of
globalisation, if you want to inspire people to follow, you have
to understand and respect their cultural diversity .”
Group L , MBA (PT)
Understanding Culture
“Actually, the most important
part of culture ... is that which
is hidden and internal but
which governs the behavior
encounter.”
*Source: Edward T. Hall, 1976
Group L , MBA (PT)
Culture as a:
problem/threat
opportunity/resource
culture gets “in the way”
culture as a source of
competitive
advantage
Group L , MBA (PT)
How to get that competitive advantage?
“importance of releasing cultural synergies at the interfaces where
knowledge, values and experience are exchanged”
Søderberg & Holden “Rethinking Cross Cultural Management in a Globalizing
Business World” (2002)
Example:
Indian Global Sales Manager for a Danish company from his office in
Shanghai.
Group L , MBA (PT)
Model of core problems & core solutions
(Holden 2002)
Core problems
Core solutions
Ethnocentrism in the face of
Adaptation as first reaction
to cultural shock
Cultural diversity
experienced as
Adjustment as a more
permanent & positive
reaction
Cultural shock which varies
with exerience and may be
lesser or greater in impact
Development of
intercultural skills: creating
”the cross-cultural manager”
Group L , MBA (PT)
Critical Cultural Variables
Authority,
responsibility &
accountability
Power
Urgency
Extent to which
power is distributed
Time
The view of and
way time is used
Structure
Culture
Extent to which uncertainty
creates discomfort
Communication
The way and style
information is shared
Individual/group
Whether individual or
group takes precedence
Commitment
Agreements & contracts
Risk-taking
Konflikt
Group L , MBA (PT)
Source: Interlink
Linking an individual’s personality and
values to the workplace
•Personality – job fit
•Person –organization fit
Group L , MBA (PT)
Achieving Person-Job Fit
Personality-Job Fit Theory
(Holland)
Identifies six personality types
and proposes that the fit
between personality type and
occupational environment
determines satisfaction and
turnover
Personality Types
• Realistic
• Investigative
• Social
• Conventional
• Enterprising
• Artistic
Group L , MBA (PT)
How cultures view each other
Stereotyping – assumes that all people within one culture or
group behave, believe, feel and act the same.
Ethnocentrism – occurs when people from one culture believe
that theirs are the only correct norms, values and believes.
Self-reliance criterion – assumption that people in another culture
will behave like people in your culture
Group L , MBA (PT)
Constructing Cultural Metaphors –
Great Contributors
• Florence Kluckholn and Fred Strodtbeck
• Edward T. Hall
• Geert Hofstede
Group L , MBA (PT)
Florence Kluckholn and Fred Strodtbeck
• FLORENCE KLUCKHOHN (HARVARD UNIVERSITY) AND FRED
STRODTBECK (UNIVERSITY OF CHICAGO)
• DEVELOPED VALUES ORIENTATION THEORY IN 1961
• A WIDELY USED TOOL FOR CROSS-CULTURAL RESEARCH AND
INTERACTION.
Group L , MBA (PT)
Edward Twitchell Hall
• Few researchers have contributed more to intercultural understanding
than American anthropologist Edward Twitchell Hall.
• Best known for his studies of personal space and his definitions of
high- and low-context cultures.
• Hall was instrumental in establishing intercultural research as a field of
its own after World War II.
• In his book The Silent Language, the author explores the cross-cultural
context of communication.
Group L , MBA (PT)
Primary Message Systems
•
•
•
•
•
•
•
•
•
•
Interaction
Association
Subsistence
Bisexuality
Territoriality
Temporality
Learning
Play
Defense
Exploitation
*Source: Edward T. Hall, The Silent Language
Group L , MBA (PT)
Geert Hofstede
• Prominent organizational Psychologist.
• Research is based on a large questionaire survey of IBM
employees and managers working in 53 different countries.
• IBM study demonstrated that national culture explained
50% of the differences in attitudes in IBM’s 53 countries.
Group L , MBA (PT)
Values Across Cultures: Hofstede’s Framework
• Power Distance (Wealth & Status – Low / High)
• Individualism vs. Collectivism
• Masculinity vs. Femininity
• Uncertainty Avoidance (High / Low)
• Long-term and Short-term Orientation
Group L , MBA (PT)
Hofstede Research Findings:
• Asian countries (more collectivist than individualistic).
• United States - highest on individualism.
• German & Hong Kong - high on masculinity.
• Russia & Netherlands - low on masculinity.
• China & Hong Kong - long-term orientation.
• France & the USA - short-term orientation
Group L , MBA (PT)
Cultural Metaphors
Understanding Global Cultures describes a
method for understanding easily and quickly the
cultural mind-set of a nation and comparing it to
other nations
Group L , MBA (PT)
Cultural Metaphors
• IDENTIFYING
SOME
PHENOMENON,
ACTIVITY, OR INSTITUTION OF A NATION’S
CULTURE THAT ALL OR MOST OF ITS
MEMBERS CONSIDER TO BE VERY
IMPORTANT AND WITH WHICH THEY
IDENTIFY CLOSELY
• CHARACTERISTICS OF THE METAPHOR
THEN
BECOME
THE
BASIS
FOR
DESCRIBING AND UNDERSTANDING THE
ESSENTIAL FEATURES OF THE SOCIETY
Group L , MBA (PT)
Cultural Metaphors
• EACH METAPHOR IS A GUIDE OR MAP THAT
HELPS THE FOREIGNER UNDERSTAND
QUICKLY WHAT MEMBERS OF A SOCIETY
CONSIDER VERY IMPORTANT
• BUT IT IS ONLY A STARTING POINT AGAINST
WHICH WE CAN COMPARE OUR OWN
EXPERIENCES AND THROUGH WHICH WE
CAN START TO UNDERSTAND THE SEEMING
CONTRADICTIONS PERVASIVE IN MOST, IF
NOT ALL, SOCIETIES
Group L , MBA (PT)
Cultural Metaphors include . . .
•
religion
•
early socialization and family structure
•
small group behavior
•
public behavior
•
leisure pursuits and interests
• language
– oral and written communication
• nonoral communication
– body language
• kinesics (motion)
• proxemics (space)
Group L , MBA (PT)
Cultural Metaphors include . . .
•
total Lifestyle
– work / leisure / home and time allocations to each of them
•
aural space
– the degree to which members of a society react negatively
to high noise levels
•
•
roles and status of different members of a society
holidays and ceremonies
•
greeting behavior
•
humor
Group L , MBA (PT)
Cultural Metaphors include . . .
•
sports
– as a reflection of cultural values
•
political structure of a society
•
•
the educational system of a society
traditions and the degree to which the established
order is emphasized
•
history of a society
– but only as it reflects cultural mind-sets, or the manner in
which its members think, feel, and act
– not a detailed history
Group L , MBA (PT)
Cultural Metaphors include . . .
• food and eating behavior
• social class structure
• rate of technological and cultural change
• organization of and perspective on work
– such as a society’s commitment to the work ethic,
superior-subordinate relationships, and so on
• any other categories that are appropriate
Group L , MBA (PT)
Social Dynamics of Culture Change
Adopter category
Innovators
First 2.5%
Early adopters Next 13.5%
Early majority
Next 34%
Late majority
Next 34%
Laggards
Group L , MBA (PT)
Remaining 16%
Promoting Culture Change
Building on the old
Identifying the rational
Avoiding the unknown
Recognizing the influence of others
Providing support
Group L , MBA (PT)
Cultural Competency
“To be culturally competent doesn’t mean you
are an authority in the values and beliefs of every
culture. What it means is that you hold a deep
respect for cultural differences and are eager to
learn, and willing to accept, that there are many
ways of viewing the world.”
— Okokon O. Udo, PhD
Integrative Health and Wellness
Northwestern Health Sciences University
Group L , MBA (PT)
Cultural Competency — A Practical View
“To be culturally competent doesn’t mean that you will
never encounter cultural bumps. What it means is that you
will be more aware of how and why cultural bumps happen
while skillfully navigating them for best outcomes.”
—Ira SenGupta, CCHCP, December 05
Group L , MBA (PT)
Cultural Bump...
As a result of a personal interaction you are:
– confused
– frustrated
– angry
– misunderstood
– helpless
– hopeless
Group L , MBA (PT)
Group L , MBA (PT)
Cultural Competence Actualized
The state of being capable of functioning effectively in
the context of cultural differences
Group L , MBA (PT)
Elements of Cultural Competence
• Awareness of one’s own culture
• Awareness and acceptance of difference
• Understanding the dynamics of difference
• Development of cultural knowledge
• Celebration of diversity
Group L , MBA (PT)
Five Steps to Cultural Competency
•
Awareness of self and the other
•
Acknowledgement
•
Honest validation
•
Negotiation
•
Action: choices and options
Group L , MBA (PT)
Cross-cultural management
• STUDIES
THE
BEHAVIOUR
OF
PEOPLE
ORGANISATIONS AROUND THE WORLD
IN
• TRAINS PEOPLE TO WORK IN ORGANISATIONS WITH
EMPLOYEE AND CLIENT POPULATIONS.
• DESCRIBES ORGANIZATIONAL BEHAVIOUR WITHIN
COUNTRIES AND CULTURES
• COMPARES ORGANISATIONAL BEHAVIOUR ACROSS
CULTURES AND COUNTRIES
• SEEKS TO UNDERSTAND AND IMPROVE THE
INTERACTION
OF
CO-WORKERS,
CLIENTS,
SUPPLIERS, AND ALLIANCE PARTNERS FROM
DIFFERENT COUNTRIES AND CULTURES
Adler: “International Dimensions of Organizational Behavior” (1991)
Group L , MBA (PT)
Management challenge in a globalised world
Group L , MBA (PT)
Training For International Assignments
•Need for cross –cultural training
•Approaches to training/ design of training program
•Assessing the need for rigorous Training
•Family issues
•Training resources
Group L , MBA (PT)
Need for cross cultural training
• Training on key cultural norms
– Values
– Behaviours
– Beliefs
• Utility of training
– Understanding behaviour
– adaptation
• Advantages
– Cross cultural skill development
– Improvement in productivity/ performance
Group L , MBA (PT)
Approaches to training/ design of training program
• Attribution training
– Understand reasons for a specific behaviour
– To learn values, norms, perceptual mapsused by host to evaluate
behaviour. Attribution training
• Cultural awareness training
– attributes common to home/ host culture
– Affect of culture on host behaviour
• Cognitive behaviour modification training
– Compare, reward and punishment norms of home/ host
– Formulate personal strategy to obtain rewards- avoid negative
experiences
• Experiential training
– Expsure to real life in host country
– Through visits, complex role plays and cross cultural simulations
Group L , MBA (PT)
Training tools/ techniques
•
•
•
•
•
•
•
•
•
•
Area briefings
Lectures
Books/ reading material
audio visuals
Class room language training
Case studies
Culture assimilators- questionnaire; eval; feedback
Sensitivity training
Role plays
Simulations- complex role plays; real life situations- stay in simulated
host villages
Group L , MBA (PT)
Accesing the need for rigor
Experimental
•Simulations
•Role play
•Field trips
•Interactive language training
Analytical
•Sensitivity training
•Culture assimilators
•Class room language training
•Audio visuals
Factual
•Books/ reading material
•lectures
•Area briefings
Group L , MBA (PT)
How Rigorous The Training Should Be
• Job Novelty
– Level of decision making power
– Job Autonomy
– Strategy design/implication
• Degree of interaction with host nationals
– Limited Interaction – less rigorous
– High Degree of Interaction – More rigorous
– Frequency of Interaction
– Importance to success of operation
• Culture Novelty
– Higher Novelty-more rigorous
– Highly novel cultures – difficult to adjust and absorb
training programs
Group L , MBA (PT)
“Cross cultural training
needs to be a family
affair”
Group L , MBA (PT)
Family Issues
• Adaptability of spouse and children equally important.
• Dual career couples – visa restrictions
• Cultural shock to school going children – need for rigorous predeparture training.
• Adjustment to new life styles/roles/norms
Group L , MBA (PT)
Training Resources and Methodology
• Resources
– Consulting firms
– Assignment of staff member from home office
• Methodology
– Survival level- Pre Departure training
– Rigorous training after 4 – 6 months of overseas stay
Group L , MBA (PT)
Multi-cultural teams
“The central operating mode for a global
enterprises is the creation, organisation and
management of multi-cultural teams –
groups that represent diversity in functional
capability, experience levels and cultural
backgrounds.
Rheinsmith, “The Manager’s Guide to Globalization” (1993)
Group L , MBA (PT)
Diagnosing difficulties in team
A manager or facilitator should use the following order in examining
potential team difficulties:
• personal styles
• stage of team development
• effective team functioning
• stages of professional development
• national culture
• corporate culture
• functional culture
Group L , MBA (PT)
Lenovo-IBM – A Marriage Across 12 Time Zones
Lenovo
IBM PC Division
• $3b revenues
• 27% of Chinese Market
• $10b revenues (IBM total: $96b)
• 8% of global market
• No. 8 global PC maker
• Founded 1984, HK listed 1994
• No. 3 global PC firm
• IBM founded 1911
$1.75b deal: 600m equity (19% stake), $650m cash, take over $500m liabilities
Lenovo takes over IBM PC Division (announced 8 Dec 2004, completed 1 May
2005)
• Right to use IBM brand name for 5 yrs
• IBM provides sales and support services
• IBM will be preferred vendor for financing and maintenance services
• 10,000 IBM employees join Lenovo
Group L , MBA (PT)
Source: Stahl, Ngo & Yean (2008). Lenovo-IBM: A marriage across 12 time zones. INSEAD Case.
Lenovo-IBM – A Marriage Across 12 Time Zones
• Lenovo Group Limited is a Chinese-based multinational computer
technology corporation
• Incorporated as Legend in Hong Kong in 1988
• Lenovo acquired the former IBM PC Company Division, which
marketed the ThinkPad line of notebook PCs, in 2005 for
approximately $1.75 billion.
Group L , MBA (PT)
65
Renault Nissan – Partnering with the Unfamiliar
Group L , MBA (PT)
Source: Korine, Asakawa & Gomez (2005). Renault and Nissan: Partnering with the unfamiliar. In Stahl &
Mendenhall (Eds.),
Mergers and acquisitions: Managing culture and human resources. Stanford Business Press.
Renault Nissan – Partnering with the Unfamiliar
• The Renault-Nissan alliance, established in March 1999, is the first
industrial and commercial partnership of its kind involving a French and
a Japanese company
• A real success
• 2 global companies linked by cross-shareholdings
• Third largest global automaker
• Global market share of 9% (by volume)
• Significant presence in major world markets (United States, Europe,
Japan, China, India, Russia)
Group L , MBA (PT)
67
The Role of Culture in Alliances,
Mergers & Acquisitions: Renault-Nissan
Some people consider cultural differences
as a source of friction and conflicts. It is
true. But cultural differences are basically
a source of enrichment and progress.
(Carlos Ghosn, 2000)
Cultural differences can be viewed as
either a handicap or a powerful seed for
something new. What we see today [in
Renault-Nissan] is that differences in
culture are… seen more and more as a
means
of
cross-fertilization
and
innovation. … So, it is a careful selection
of best practices. (Carlos Ghosn, 2001)
Sources: Carlos Ghosn, INSEAD Tokyo Forum, November 2000; Emerson 2001 ‘An interview with Carlos Ghosn,
President
of Nissan Motors and Industry Leader of the Year. Journal of World Business, 36, 3-10 .
Group L , MBA (PT)
DaimlerChrysler – a sad ending
Group L , MBA (PT) Source: Kühlmann & Dowling (2005). DaimlerChrysler: A case study of a cross-border merger. In Stahl &
Mendenhall (Eds.), Mergers and acquisitions: Managing culture and human resources. Stanford Business
Press.
DaimlerChrysler – a sad ending
• DaimlerChrysler was founded in 1998 when MercedesBenz manufacturer Daimler-Benz (1926–1998) of
Germany merged with the US-based Chrysler
Corporation.
• Buyout failed and as late as 2002, DaimlerChrysler
appeared to run two independent product lines.
• DaimlerChrysler sold Chrysler to Cerberus Capital
Management of New York, a private equity firm
specialising in restructuring troubled companies in 2007.
• From October 5, 2007, the company has been titled
Daimler AG.
• The US company adopted the name Chrysler LLC.
Group L , MBA (PT)
DaimlerChrysler – a sad ending
• Analysts felt that strategically, the merger made good business
sense.
• But contrasting cultures and management styles hindered the
realization of the synergies.
• Daimler-Benz attempted to run Chrysler USA operations in the
same way as it would run its German operations.
• Daimler-Benz was characterised by methodical decision-making.
• US based Chrysler encouraged creativity.
• While Chrysler represented American adaptability and valued
efficiency and equal empowerment Daimler-Benz valued a more
traditional respect for hierarchy and centralized decision-making.
Group L , MBA (PT)
And the majority of “FAILURE” IS
ATTRIBUTED TO….
1. The Human Factor &
2.The Cultural “Misfit”

Group L , MBA (PT)
73
Group L , MBA (PT)
Arcelor-Mittal Merger
• In January 2006, Mittal Steel
launched a $22.7 billion offer
to Arcelor’s shareholders.
• Deal was split between Mittal
Shares (75 percent) and cash
(25 percent).
• Arcelor
shareholders
would
have received 4 Mittal Steel
shares and 35 euros for every
5 Arcelor shares they held.
• LN Mittal believed that the consolidation will end with three of
four major companies dominating the industry around
2010.
Group L , MBA (PT)
The Controversy??
• Arcelor Management believed that Arcelor itself would have been
doing the acquisitions and not the other way around.
• The management was extremely hostile to Mittal Steel’s bid from the
beginning despite the fact that most industry analysts and investment
banks pointing out that the deal was in Arcelor‘s best interests.
• Arcelor repeatedly played the patriotic card in order for shareholders
to reject the bid.
• Guy Dolle the CEO of Arcelor dismissed Mittal Steel as a “company
of Indians” and unworthy of taking over a European company.
• The French government (despite not being a shareholder) was
against the deal because of worries over its 28000 Arcelor
employees.
• Despite repeated assurances from Mittal that the deal would not lead
to layoffs the government of France was never convinced.
• The government of Luxembourg (a stakeholder) was against the deal
as well for a variety of reasons.
• The European Union approved of the Mittal-Arcelor deal.
Group L , MBA (PT)
The stance of the Indian
Government
• Most Indians were of the opinion that the deal was not
getting pushed through because of Lakshmi Mittal’s Indian
nationality.
• The Indian government raised the issue at several forums
especially through commerce minister Kamal Nath.
• It was also alleged that India had threatened not to ratify a
taxation accord with Luxembourg due to the latter’s
opposition to the deal.
• The irony is that LN Mittal himself felt that there was no
case of “racism” here as Mittal Steel was a European
company and NOT an Indian one.
Group L , MBA (PT)
And the outcome was…
• The deal was finally clinched when the shareholders of Arcelor
agreed to Mittal Steel’s offer ending the transaction that had
dragged on for months.
• Mittal had to however considerably sweeten the initial offer.
• Under severe pressure to counteract the Arcelor- Severstal
merger, Mittal had to raise its valuation of Arcelor to $32.9 billion.
• The Mittal family holds 43 percent of the combined group.
• The combined company holds 10 percent of the global market for
steel. The consolidation phase is well and truly underway .
Group L , MBA (PT)
Group L , MBA (PT)
Tata-Corus Merger
• Tata Steel’s US$ 8 billion takeover of Corus in the UK, is the
largest-ever overseas buyout by an Indian company.
• It also breaks the US $1 billion barrier for Indian companies.
• Tata Steel — with capacity of five million tonnes — is now
acquiring a firm almost four times its size in capacity.
•Long time Corus employees in UK were aghast when they
heard of the possibility that an "Indian" company will acquire
them, and they will have an Indian boss - whose name they
cannot pronounce.
"The biggest challenge ahead of the Tatas would be how to
integrate these two companies, these two cultures, how to
work with a new type of management and how to work in a
matured market as opposed to working in a developing
market."
Group L , MBA (PT)
STRATEGIES FOR MANAGING
HUMAN RESOURCE IN M&A
• Communication
• Common culture
• Training and
development
• Mutual respect
• Individual counseling
Group L , MBA (PT)
The Role of Cultural Distance in M&A:
What Do We Know?
Empirical Evidence is Mixed
 Cultural distance was found to be negatively related
(e.g., Weber, Shenkar & Raveh, 1996), unrelated
(e.g., Markides & Oyon, 1998), or positively
related (e.g., Morosini, Shane & Singh, 1998) to
measures of post- acquisition performance.
 Success rate of cross-border M&A was found to be
higher than for
domestic M&A (e.g., Chakrabarti et
al., 2009).
Source: Stahl & Javidan (2009). Comparative and cross-cultural perspectives on cross-border mergers and acquisitions. In Bhagat &
Steers (Eds.), Handbook of culture, organization, and work. Cambridge University Press.
Group L , MBA (PT)
Cultural Distance and M&A Performance:
Causal Models
a) Unmediated model
Cultural
Distance
M&A
Performance
b) Mediated model
Cultural
Distance
Mediating Variable
(e.g., Resistance)
c) Moderated model
Moderating Variable
(e.g., Integration Level)
Cultural
Distance
Group L , MBA (PT)
M&A
Performance
M&A
Performance
Cultural Distance and M&A Performance:
Causal Models
d) Complex model
National
Functional
Industry Company A
Culture
Corporate
Professional
Moderating Variable
(e.g., Integration Level)
Cultural Differences
- Practices
- Values
- Assumptions
M&A Performance
Mediating Variable
(e.g., Resistance)
- Operational synergies
- Accounting performance
- Abnormal returns
National
Functional
Industry
Company B
Culture
Corporate
Professional
Source: Stahl (2008). Cultural dynamics and impact of cultural distance within mergers and acquisitions. In Smith,
Peterson
& Thomas (Eds.), The Handbook of cross-cultural management research (pp. 431-448). Thousand Oaks: Sage.
Group L , MBA (PT)
Hypothesized Effect of Cultural Distance
on M&A Performance
Dimension of
Cultural Differences
(Moderators)
Degree of
Relatedness
Note: aThe relationship between cultural differences and
task integration has not been examined with sufficient
frequency in previous research to be considered in this
meta-analysis.
Integration Process
Sociocultural
Integration
- Shared identity
- Positive attitudes
- Trust
Cultural Distance
M&A Performance
Synergy
Realization
Accounting
performance
- Practices
- Values
- Basic assumptions
Task Integrationa
- Capability transfer
- Resource sharing
- Learning
Shareholder Value
Abnormal
returns
Time
Source: Stahl & Voigt (2008). Do cultural differences matter in mergers and acquisitions? A tentative model and
examination. Organization Science, 19, 160-176.
Groupmeta-analytic
L , MBA (PT)
Final Thoughts...
You and I
We meet as strangers, each carrying a mystery
within us. I cannot say who you are.
I may never know you completely.
But I trust that you are a person in your own
right, possessed of a beauty and value that are
the Earth's richest treasures.
So I make this promise to you;
I will impose no identities upon you, but will
invite you to become yourself
without shame or fear.
I will hold open a space for you in the world
and allow your right to fill it with an authentic
vocation and purpose. For as long as your search
takes, you have my loyalty.
Author Unknown
Group L , MBA (PT)
THANK YOU
Group L , MBA (PT)