Merger and Acquisition Cultural Risk and Integration

On a global scale, mergers and acquisitions have become to expand the scale and increase their strength, an important means to improve efficiency.However, the majority failed to achieve the desired post-merger value.Global M & A integration business partner, Mr. Jack Prouty concluded today pointed out that the phenomenon of mergers and acquisitions 70/70: 70% of the world today after the company failed to achieve the desired acquisition of the commercial value, 70% of the post-merger integration failure due process.After the merger integration difficult, but most elusive integration of corporate culture.Many enterprises in the pre-merger generally focus on strategic and financial factors, ignoring the two companies after M & A culture compatibility.According to New York, founded in 1916, the world's leading business forum organization Conference Board, a recent Fortune 500 companies in 147 Deputy CEO and responsible for the acquisition of the survey, 90% of respondents believe that: the success of the enterprise after the merger,cultural factors and financial factors at least as important.Cultural Integration post M & A has become the new corporate human resources responsibilities, is also a professional human resources knowledge and capacity of the new personnel requirements.M & A business can resolve cultural conflict, the decision to effectively integrate acquisitions corporate culture is an important factor in future development. M & cultural risk M & A, whether the company or individual, is a big change, indicating that the company and its management and business development and general staff a big career change.In this process, personal values, behavior, and foreign cultures prone to conflict.DaimlerBenz merged with Chrysler in the past, large-scale cross-border M & A failure rate and reasons for the research, the study results, more than 70% of the M & A transactions within three years, conceded defeat, and on which50 failures detailed analysis shows that cultural conflict is one of the main cause of failure.Lybrand in 1993, accounting and consulting firms involved in mergers and acquisitions of enterprises surveyed senior managers, the answer is as follows: Note: The figures in brackets are the representative of the reason the percentage of visitors. Shows the failure of M & Culture is a very important factor.Many studies have shown that the greatest obstacle to M & A integration from a variety of informal exchanges, joint and behavior, that is, the integration of different corporate culture conflict.Mirvis and Marks the cultural conflict into four phases: Perceived differences.People first took note of the leadership style of different enterprises, managers and staff behavior and attitudes of the difference between code of conduct even the most ordinary aspects can also cause people's attention. Magnification difference.Over time, the perceived difference gradually become prominent and sharp, people began to conclude that more reflects the deep-seated differences between the two sides of the difference between values and business

philosophy. Typification.That the other party workers like employees, almost all aspects of behavior are alike, so with some of the terms for them a typical "image" of themselves and each party's summary of the others are different.Once the typification, it means that one party give up on exploring and understanding each other, or even give up the desire to accept other cultures and efforts, especially in case of conflict. Repression.This is the final stage of cultural conflict.At this point, one culture by the other cultural repression, suppression of side show cultural superiority.Condescending attitude and perspective not only means, and in the company to develop strategies, policies and behavior on the performance of a tough request.As a result, alienate the other employees, lead to strong resistance, and the loss of the other party to understand and be able to take some better way of doing business, practice opportunities. M & As between domestic companies from the past development of today's M & A mergers and acquisitions among multinational companies, the enterprise culture of M & A risk faced by this generation: Cross-cultural conflict.A person's culture is in the many years of life, work, education, formed under the influence, in all different cultural backgrounds, officers, employees due to different values, ways of thinking, habits, customs and other differences, some of the basic businessproblems often have different attitudes and reactions, such cultural differences on business, in a period of time will not be eliminated, and may remain stable over a long period of time.Transnational mergers and acquisitions of enterprises due to the national language, writing, cultural differences and values the impact of the enterprise at different "cultural marginal fields," the people will inevitably conflict behavior and concepts.If the advantages of self-sustaining enterprise managers in the cultural values of their own superiority, the behavior of "self-reference standard" as a criterion to deal with cultural values different from their own staff, is bound to be resisted, and further expansion of cultural conflict, and thus to the enterpriseOperating planted crisis. Culture conflict.Different social and cultural backgrounds, different production practice, and its corporate culture also showed different characteristics.Like other organisms, like business, is a living entity, there is a certain cultural rejection.When the merger parties or far from the core of cultural inconsistencies, such as cautious, conservative and innovative, enterprising culture in M & As inevitably as the parties values, behavior, management style, the difference in the cultural adaptation of friction.When employees can not be blending with the culture, the immediate reaction is anxiety, fear and anxiety, in turn "culture shock."These, in turn, exacerbate cultural conflict. Managers, staff attitude.Two or more companies merge, there will inevitably involve the adjustment of high-level leadership, organizational structure changes, the re-examination of regulations and operating procedures, staff and re-posts and the fate of surplus workers, managers, and these will causeStaff thought, sentiment, attitudes were mixed on mergers and acquisitions.Research shows that no matter how fair the surface, complete the merger, one company and believe that they are "losers", the other companies think that they are "winners."Since in M & A that "losers" in the interests of managers, once damaged, the organization that he would use his influence with the staff, increase the resistance of M & A after the operation.If the employee response to cold treatment of mergers and acquisitions, and feeling of being unfairly treated, they will demonstrate against and disdain, these will increase the acquisition costs, obstacles and difficulties to

bring about mergers and acquisitions. M & A Cultural Integration Cultural Analysis Collect targeting information on corporate culture.Target culture in the collection of information, it is necessary to collect reflected in the tangible "objects" and behavioral information: the business signs, working environment, rules and regulations, the official terminology used in documents, plans procedures, conference papers, and meet peoplecourtesy, the staff daily behavior; also on this basis, to dig through the external dominant culture hidden behind the organizational philosophy, values, organizational culture, the unwritten code of conduct, etc. These hidden culture.If the cross-border mergers and acquisitions, the collection of cultural information collection target company must pay attention to the country's dominant culture. Qualitative and quantitative analysis to determine the conflict, the size of the risk.When the relevant cultural information obtained after the target company to a potential of each source of information for further investigation to collect, exploit their valuable content, and then by the executives, lawyers, financial analysts, cultural group angles, all-round evaluation and analysis.In the analysis should focus on two business thought leaders and senior executives in the values, management style and staff code of conduct compared with the potential to explore conflict and overt conflict risk. Cultural Orientation After the completion of the above analysis, assess whether the other side of corporate culture corporate culture compatible with the co-existence, then the cultural orientation, specific strategies are: the establishment of the dominant culture-oriented corporate culture, replacing the other side of the original culture. consciously to integrate two different cultures to form a new culture. keep each other company's culture. Cultural Integration Development of effective cultural integration plan.When the target has done a detailed analysis of corporate culture, you should start to study how the two different cultures together to successfully overcome the acquisition of both culture and non-cultural conflict.Need to develop effective cultural integration plan, set up the team responsible for the integration to a new manager about the company's culture and rules; to join senior management.Employees of two companies may still be a month before the competition, is to work together, is a very difficult task, requires a lot of understanding, communication, contact.Therefore, company executives, integration team and the new manager should work out integration plans and communication plans, including a timetable and specific action plans and set up work projects, so that employees of both companies to work together, together to achieve new goals.The integration team for the company to provide adequate resources and support. Respect each other's business practices.Through cultural analysis to identify the cultural differences the two sides of inferior enterprises to maintain a good culture should be affirmed.Advantage of business if self-sustaining dominant culture, contempt, not respect each other's business practices and employee values, resulting in a direct impact on the staff of psychological, emotional dissatisfaction, staff on-response was slack, to reduce the new organization loyalty, loss of work motivationand reduced efficiency.Therefore,

in the integration process to respect each other's business practices, in particular, other good practices and codes of conduct. Treat the other managers.M & M for the party is to be a big change, most people will have a sense of crisis, disturbed sense of before and after mergers and acquisitions, companies have a greater shock and turmoil, in order to achieve cultural unity, senior managers(especially the original business) support is essential.At this point, if not a very good arrangements for high-level enterprise, mid-level managers, those at the center of the company against the company may have a stable behavior, such as the excellent staff and managers of collective resignation.The resistance will increase staff and work efficiency.Successful experience of a successful M & A business, that is, within one year of the original company managers should be appropriate and mutually enhance the exchange of management. Development of transition policy.Many very successful in the acquisition of companies such as Hewlett-Packard, Johnson & Johnson, often using standardized assessment techniques, comprehensive evaluation of the target company, and after closing for a long period of time (usually 3 years) and the target company to deal with itmanagement and business practice differences, the establishment of the target company by the company and the key advantages of coordinating group consisting of, the use of teams to coordinate their enterprises, and cultural conflict between the progressive implementation of its business philosophy, management, the ultimate unification of M. Focus on integration of the speed and integration.Implementation of integration plans, to use effective training, management personnel for the implementation of short-term projects to accelerate the integration of speed, usually 100 days to complete the integration.Auditors audit the use of integrated processes to ensure that does not deviate from the direction of the integration process and accelerate progress.Cultural Integration in M & A need to constantly develop new management tools, new work processes and communication language.Work through long-term management of exchange, so that a real integration of two cultures.Regular training through the training center to promote successful cultural integration experience.