Managing Diverse Cultures in Mergers
A corporate merger involves not only the merging of products, markets andother corporations between firms, but also a merging of cultures. It has beenfound that within 5 years, many mergers found serious deterioration in theperformance of the acquired companies, and almost one third of all acquiredcompanies are sold off and 90% of mergers fail to produce anticipated results.One of the major causes of these failures is cultural clash which may lead to abreakdown in communications, strong resistance to change, lack ofcommitment, and a destructive "us versus them" attitude. Cultural clash refersto the uncertainty, anxiety, fear, and tension which accompany the forcedunion of two dissimilar cultures.
There are four important dimensions upon which many cultures vary. Theyinclude social relationships, values and attitudes, education, and religion.Different culture has different interpretation of each item. That is to saycultural differences are responsible for cultural clash.Social Relationships
People in different societies organize their social relationships and activitiesin a manner that is consistent with their societys values, religions andeconomies. One example of how important this is occurred when a U.S. firmfound that a manager it hired to operate a plant in Taiwan had continuallydeterred his decision making to a subordinate. Apparently, the subordinate hadoutranked the manager during his military career and the U.S. managers hadfailed to take this social relationship into account. Multinational corporationscan minimize such mistakes by closely observing and organizing knowledgeabout the norms and forms of social organizations relevant to their internationaloperations. Also, managers need to assess the extent to which outside valuesand organizational forms can be successfully introduced into the host culture.Values and Attitudes
The values and attitudes of the people in a foreign culture are importantconsiderations for the multinational corporation. Attitudes toward time, forexample, can have important implications for a firm. According to a Honeywellexecutive with international experience, "Time as a cultural value is something we dont understand until we are in another culture.
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