However, while China is speeding up its steps towards the world, it is also facing cultural conflicts and frictions between the East and the West. Therefore, it is more and more important and urgent to study the methods and skills of cross-cultural integration of overseas mergers and acquisitions.
Cultural differences and conflicts in cross-cultural mergers and acquisitions
The challenges faced by China enterprises in cross-border mergers and acquisitions from the cultural differences between the East and the West can be analyzed from the following two aspects:
1.M&A National Cultural Differences between Political Parties
The cultural differences between the two sides of M&A are enormous, because they are not only faced with organizational cultural differences and conflicts from the enterprise level, but also with national cultural differences and conflicts. The national cultural model proposed by Hofst-ede is mainly composed of power degree, individualism/collectivism, uncertainty avoidance, masculinity/feminism and long/short-term orientation. Cultural differences at the enterprise level are often different manifestations of national cultural differences in these dimensions. Mainly reflected in the differences in ideas, behaviors, management methods, management procedures, organizational communication and decision-making.
In addition, western culture emphasizes rational thinking habits and fairness, which is manifested in the legalization of social system and the establishment and improvement of enterprise system in enterprise operation. The system construction of enterprises in western countries (especially the United States) is usually very perfect, and there are complete written materials from the job analysis of each post to the overall scheme of performance appraisal. On the contrary, China people's traditional management thought is based on the rule of man, and few managers pay attention to the construction of systems and processes, while the incumbents do their own things according to their own preferences, with poor continuity. In addition, there are great differences between China and foreign countries in personnel system. For example, China people pay more attention to having both ability and political integrity and interpersonal relationships, while the West puts management ability first.
2. Differences in cultural identity between M&A political parties.
Facing the double differences between national culture and corporate culture in cross-border mergers and acquisitions, the degree of recognition and acceptance of each other's cultures has become the key factor of cultural integration. In the process of overseas expansion of China enterprises, employees, media, investors and even trade unions in the countries where the merged enterprises are located are still skeptical about China enterprises. Overseas, China enterprises often give people the impression that their products are low in price and low in efficiency. Under this impression, ordinary employees of the merged enterprises are worried about their employment, managers are worried about their positions, and investors are worried about their returns. In fact, China enterprises engaged in cross-border M&A are often the best in domestic industries. They have made remarkable achievements in their past operations and formed a relatively stable corporate culture. Their top managers usually position themselves as the elite of national culture, which determines that they are very persistent in national culture, so they are unwilling to make any decisions that harm national culture in cultural integration, and at the same time tend to apply the management model adopted by successful domestic operations in the past to the acquired enterprises. However, the acquired foreign enterprises usually have a long history and a mature enterprise environment. They have a high degree of cultural identity with themselves and a strong sense of cultural superiority, but generally have a low degree of corporate cultural identity with China. In this case, if China enterprises impose their own culture on the merged enterprises, conflicts will inevitably arise, and the result is often in a state of disagreement, which hinders the integration of the two sides in business and organization and leads to difficulties in mergers and acquisitions. For example, at the end of 2004, TCL's cross-border M&A faced such a "departure storm". The employees of the acquired Alcatel were dissatisfied with TCL's work arrangement, salary method and sales model, so they left on a large scale, which put TCL in a very passive position.
The method of cross-cultural integration
Faced with these cross-cultural differences and frictions, China enterprises should adopt cross-cultural integration strategy, integrate domestic enterprises and target enterprises, establish global organizations and processes, and achieve global efficiency and competitiveness.
The so-called "cross-cultural integration" is to find the "common ground" between two enterprises with completely different cultural backgrounds and realize unified personnel arrangement, salary design, behavioral norms, enterprise concept and cultural construction.
The author believes that China's methods and skills of cross-cultural integration in overseas mergers and acquisitions should be as follows:
Understand the potential cultural differences and conflicts before mergers and acquisitions. Cross-cultural integration should begin before mergers and acquisitions. Before M&A, it is necessary to collect the cultural information of the selected target enterprise. It is necessary to collect information embodied in tangible "things" and behaviors, that is, the use of formal terms in various signs, working environment, rules and regulations, documents, planned work procedures, meeting documents, people's etiquette, daily behaviors of employees, etc. ; On this basis, through the external explicit culture, we can explore the implicit culture such as organizational concept, values, organizational atmosphere and unwritten code of conduct. For cross-border mergers and acquisitions, the collection of cultural information must pay attention to the collection of dominant culture in the country where the target enterprise is located.
Conduct qualitative and quantitative analysis to determine the size of conflicts and risks. After obtaining the relevant cultural information of the target company, it is necessary to further investigate and collect every potential information source and dig out its valuable content, and then the executives, lawyers, financial analysts and cultural groups will conduct multi-angle and all-round evaluation and analysis. In the analysis, it is necessary to compare the values, management styles and employee codes of conduct of the ideological leaders and middle and high-level officials of the two enterprises in combination with the cultures of the countries where the two enterprises are located, so as to explore explicit conflicts and potential conflicts and risks.
Make an effective cultural integration plan. After analyzing the culture of the target enterprise and the host country in detail, we should start to study how to combine two different corporate cultures, so as to successfully overcome the cultural and non-cultural conflicts between the two sides of mergers and acquisitions. It is necessary to formulate an effective cultural integration plan, set up a team responsible for integration, introduce the company's culture and rules to the new manager, and let the top management participate together. The employees of the two companies may have been competitors a month ago, but now it is very difficult to work together, which requires a lot of understanding, communication and communication. Therefore, the company's top management and integration team should work out the integration plan and communication plan with the new manager, including the timetable and specific operation plan, and establish work items so that employees of the two companies can start working together to achieve new goals. The company should provide sufficient resources and support for the integrated team.
Be careful with another manager. Because M&A is a huge change for the acquired party, most people will have a sense of crisis and anxiety. Before and after M&A, enterprises will have great impact and turbulence. In order to achieve cultural unity, the support of top managers (especially the top managers of the original enterprises) is essential. For example, Lenovo's appointment of former IBM vice president Ward as CEO of the new company is a useful attempt. At this time, if the top and middle managers of the enterprise cannot be arranged well, then these people in the center of the company may have behaviors that are not conducive to the stability of the company, such as the collective resignation of outstanding employees and managers. All these will aggravate employees' resistance and reduce work efficiency. A successful experience of enterprise merger and acquisition is that the managers of the original company should be promoted and exchanged between the managers of both parties within one year.
Actively absorb the advanced culture of foreign enterprises. Up to now, most of the overseas mergers and acquisitions of China enterprises are mature enterprises in the West. From the above analysis of cultural conflicts, we can see that at present, they have a low degree of corporate culture identity in China, but a high degree of corporate culture identity in themselves, and want to maintain their own culture. Therefore, China enterprises must pay attention to absorb the advanced factors in foreign corporate culture when making overseas mergers and acquisitions.
Formulate transitional policies. M&A Many successful companies, such as Hewlett-Packard and Johnson & Johnson, often use standardized evaluation techniques to comprehensively evaluate the target company, and deal with the differences between them and the target company in management and business practice for a long time after the transaction (usually three years), establish a coordination team composed of key figures of the leading company and the target company, and use the team to coordinate the functional and cultural conflicts between the two companies, gradually implement their own business ideas and management methods, and finally realize the unification of mergers and acquisitions.
Pay attention to the speed and integration, and strengthen cross-cultural training. To implement the integration plan, effective training and short-term management exchange programs are needed to accelerate the integration, which is generally completed within 100 days. Use auditors to audit the integration process to ensure that the integration process does not deviate from the direction and speed up the progress. Training is considered as the basic means to achieve cross-cultural integration. Leonard. Nandler has long suggested that cross-cultural training should be the focus of human resources development. Many foreign multinational companies generally believe that managers in China have strong analytical skills, and they can quickly accept and master new technologies, but they don't necessarily understand why the company operates in a certain way. Therefore, Gallup research company listed problem solving, leadership, interpersonal communication, creative thinking and negotiation skills as the most needed skills for managers in China. At the same time, M&A enterprises have a better understanding of each other's national culture and corporate culture, which is also very important for both sides to establish mutual understanding and trust and promote the cultural integration process of new enterprises. The main contents of cross-cultural training include cultural awareness, cultural sensitivity training, language learning, cross-cultural communication and conflict handling, and regional environment simulation.
The integration of M&A corporate culture needs to constantly develop new management tools, new workflow and communication language. Only through the long-term job-hopping of managers can the two cultures truly merge. Promote the successful experience of cultural integration through regular training in the training center.