Has the concern for cultural integration proved to be the key to the success of M&A? Watershed? If this point is ignored, the urgency of M&A may be a costly impulse. [The following is my research on enterprise merger and cultural integration for you. I hope it will help.
Abstract: What kind of cultural integration mode to choose is directly related to the success or failure of enterprise merger and acquisition. Firstly, this paper reviews the research results of cultural integration model in enterprise merger and acquisition; Then, it points out the shortcomings of previous research results from three aspects, and puts forward three different modes of cultural integration, namely: separation? Gradual mode, assimilation? Promotion mode and penetration rate? Fusion mode; Finally, the connotation and applicable conditions of these three cultural integration models are expounded.
Keywords: enterprise merger and acquisition; Cultural integration model; Cultural integration application
I. Introduction
Taos? Towers watson specially studied more than 65,438+080 successful M&A cases in the past 65,438+00 years, and concluded that successful cultural integration is an important factor for the success of M&A. [1] According to a global research report of kpmg (2002), six pre-M&A activities were pointed out to increase the possibility of success. [2] Paying attention to cultural integration has been proved to be the success or failure of M&A? Watershed? If this point is ignored, the urgency of M&A may be a costly impulse. [3] What kind of cultural integration mode is the first problem to be faced after M&A, because different types of cultural integration modes mean different degrees of cultural conflict, which determines the different control scope and business model after M&A integration, and then determines the possibility of M&A's success. ..
Second, M&A cross-border cultural integration model review
Berry (1982, 1984) is an early scholar who proposed the M&A cultural integration model. He believes that there are four modes of cultural integration between the two sides of M&A, namely, cultural integration, cultural assimilation, cultural separation and cultural extinction. Cartwright and Cooper (1994) put forward three possible types of cooperative relations in M&A according to M&A's motives, goals and power movements [6]. Later, many scholars put forward a variety of cultural integration models of enterprise mergers and acquisitions based on their different research perspectives and methods.
Summarizing some representative research results, it is not difficult to find that: on the one hand, these different types of integration models are divided according to the standard of cultural overlap between the two sides. On the other hand, the types of integration models proposed by many scholars do not exceed the four cross-cultural integration models proposed by berry( 1980) in content and form, and are basically based on the four models proposed by berry( 1980).
Third, the review of previous research results.
It should be said that the previous literature laid a theoretical foundation for us to study the cultural integration model, and also analyzed the influencing factors of different cultural integration models to a great extent, which also has certain reference significance for guiding the cultural integration practice of enterprises, but there are also the following shortcomings:
First of all, most of the previous studies on cultural integration model are based on the cultural adaptation model proposed by berry( 1984). But Berry's research (1984) is based on culture? Invaded? From one side's point of view, it is necessary to discuss the cultural choice tendency of the members of the invaded party, provided that the group members have the freedom of cultural choice, which is applicable to general social groups, but not necessarily to enterprise organizations, because enterprises can dismiss employees, but in social groups, the party with the dominant cultural position cannot? Fired? Members of other groups. In enterprise mergers and acquisitions, even weak mergers and acquisitions, the acquirer also has the ultimate control right commensurate with its ownership, that is, it is the acquirer who finally makes the integration decision. The neglect of this premise led later scholars to leave? Nazism? Semantic confusion, theory is out of touch with reality. [7]
Secondly, the previous models of cultural integration, such as separation, integration and assimilation, ignored the stage and continuity in the process of cultural integration. For example, the research on the separation mode overemphasizes the cultural separation and independence of M&A political parties. Because the purpose of M&A is to maximize the synergy effect after M&A, with the development of enterprise practice, various measures should be taken to promote the gradual integration of M&A culture at an appropriate time when conditions permit, rather than just staying in a state of separation.
Similarly, the assimilation model also emphasizes how to transform the target enterprise according to the corporate culture of the acquirer, while ignoring the absorption of excellent components in the target corporate culture. Therefore, the traditional mode of cultural integration is too single and extreme in practical application, and lacks the description of the dynamics and continuity of cultural integration in cross-border mergers and acquisitions. Theoretically speaking, the traditional mode of cultural integration is not enough to guide the practice of cultural integration in enterprise mergers and acquisitions.
Thirdly, the previous studies on cultural integration models only discussed how to deal with cultural conflicts in corporate mergers and acquisitions from the perspective of cultural overlap, highlighting the differences between these models and ignoring the exploration of the internal relations between different cultural integration models.
Based on the above analysis, this paper puts forward the separation? Gradual, assimilation Promote penetration? Combining the three modes of M&A cultural integration, these three modes reflect the evolution characteristics of M&A cultural conflict and the dynamics and continuity in the process of cultural integration, which has strong operability and adaptability in practice. Their connotations and applications are explained below.
Fourthly, the connotation and application of different cultural integration models.
1. Separation? Connotation and application of progressive model
(1) separation? Connotation of progressive mode.
Separation? Gradual mode means that in the cultural integration of M&A, M&A enterprises and acquired enterprises remain relatively independent in culture for a certain period of time, without imposing changes on either side, and both sides retain their own culture; Then, with the different development stages of cultural integration, timely measures were taken to further integrate the business and culture of both sides.
Separation? In previous studies, the progressive model and the separation model have similarities, for example, they both point out the cultural and business separation between the two sides. However, the traditional separation mode ignores the synergy of culture to a certain extent, and does not point out that in the process of separation, it should be carried out according to the situation? Camera selection? That is, with the continuation of mergers and acquisitions, it is necessary to continuously integrate the cultures, businesses and personnel of both parties; In practice, the separation-gradual mode reflects the dynamic characteristics of cultural integration and makes up for the static and separation defects of the separation-integration mode.
(2) separation? Application of progressive mode.
Judging from the capacity transfer between the two parties after M&A, the company's capacity communication is a very complicated process. Robert haspeslagh, jemison( 199 1), grant(2000) and others have found that almost all bold attempts to enjoy resources and business * * * have failed in cross-border M&A, so they have been cautious about the integration of the acquired companies. Cartwright and Cooper (1993) believe that the best way to deal with cultural differences in corporate mergers and acquisitions is to control the degree and scale of integration between the two parties and maintain the independence of the merged enterprises as much as possible. [8] Shapiro (H.D., 199 1), picker (199 1) and others have analyzed the feasibility of the separation mode of cultural integration, and they think that in theory, choosing the separation mode of cultural integration needs to meet two preconditions.
Separation? When multinational companies adopt diversified M&A strategy or localization strategy, the gradual model is the most typical. For example, after General Motors of the United States controlled Isuzu Company in Japan, General Motors did not export or infiltrate American culture to Isuzu Company in Japan, but adopted a cross-cultural integration mode of completely independent coexistence. The reason is that the national cultures of the United States and Japan are too different to be integrated. So, what did GM implement after the merger? One enterprise, two systems? Step by step cultural integration.
In a word, we are interested in separation? The application conditions of the gradual cultural integration model are summarized as follows:
First, from the perspective of cultural differences, if the national culture and corporate culture of both sides are too different, or even mutually exclusive, the culture of the acquirer cannot be successfully implanted into the acquired enterprise. In the case of relatively high difficulty and cost of cultural integration, we should maintain each other's cultural independence and avoid major cultural conflicts.
Second, from the perspective of operation and management, if the target enterprise is in good operating condition and its management methods are basically appropriate, it should maintain the temporary stability and continuity of its management systems and methods to avoid damaging the feelings and work enthusiasm of employees in the target enterprise. Accordingly, the relative cultural independence of both sides should also be maintained.
Thirdly, from the perspective of M&A strategy, if M&A doesn't occur in related industries or enterprises in the same industry, or if both businesses are located in different markets, there are not many opportunities for contact between employees; Or because of the differences in industry culture, the acquirer attaches great importance to the strategic business of the target company's industry and expects to obtain the benefits of diversified operations. The acquirer will allow the acquired party to retain greater operational autonomy and cultural independence.
Fourthly, as far as the cultural strength, advantages and disadvantages of both sides are concerned, if both sides have a strong-excellent culture, employees of both sides are neither willing to change their own culture nor willing to accept each other's culture. At this time, maintaining the independence of their respective cultures is conducive to reducing cultural conflicts.
2. assimilation? Connotation and application of promotion mode
(1) assimilation? Connotation of promotion mode. Assimilation? Promotion mode refers to the process that M&A enterprises cultivate and implant M&A corporate culture in the merged enterprises and transform M&A corporate culture with M&A corporate culture. The acquired party basically gave up the original management mode and system, accepted the transformation of the acquired enterprise and adapted to the' culture' of the acquired enterprise; At the same time, M&A enterprises make some adjustments to their own organizational structure and management process, and selectively absorb the excellent elements of the acquired corporate culture in culture to form a new corporate culture dominated by M&A enterprises.
(2) Assimilation? Promote the application of the model. Choose assimilation? The most critical factor of the promotion model should be the gap between the two sides in strength and scale; Another important factor is the advantages and disadvantages of the cultures of both parties to the merger; There is also the attitude of both sides towards multiculturalism. The analysis is as follows:
First, the gap between the two sides in assets, finance and scale is obvious, and the acquirer has greater advantages. When the strength or scale of the acquirer is much larger than that of the acquirer, the process of cultural integration is often dominated by the acquirer, which more reflects the acquirer's wishes.
Second, the acquirer has a strong culture, a clear organizational goal, and the ability to use its strong cultural influence to promote its own culture in the target enterprise through measures such as business integration and system construction; Settings? Efficient, fair and honest? Social image, gain the trust of the employees of the acquired party; He has accumulated successful experience in previous mergers and acquisitions, and can flexibly use various cross-cultural management methods to properly handle cultural conflicts and crises (buono, bowditch, 1998).
Third, the acquisition is inclusive of multiculturalism and can absorb the advanced elements of the target enterprise in corporate culture; The employees of the acquired company are willing to work according to the management concept and operation process of the acquired company (Cartwright, Cooper, 1992), and are willing to change the original culture and management methods, and accept and adopt the cultural integration scheme of the acquired company.
3. Infiltration? Connotation and application of fusion mode
(1) infiltration? Connotation of fusion mode.
Infiltration? Fusion mode means that in the cultural integration of enterprise mergers and acquisitions, both sides regard cultural differences as favorable factors for integration, and both sides purposefully absorb each other's excellent cultural achievements or experiences, exchange and integrate on an equal footing without changing their respective cultural standards, learn from each other's strong points, and build a new corporate culture system on this basis to achieve cultural integration? Synergistic effect? .
Infiltration? What is the difference between the fusion mode and the fusion mode mentioned in the previous literature? The integration model emphasizes the importance of infiltration in the process of cultural integration, rather than direct integration. That is, with the intentional cultural infiltration of the acquirer and the continuous promotion of business integration, the cultures of the acquirer and the acquired party are constantly in contact, which may eventually form a culture different from that of the two companies before the merger, which is reflected in the practice of cultural integration. The progressiveness and continuity of the integration mode.
(2) infiltration? Application of fusion mode.
Infiltration? Integration mode generally occurs in mergers and acquisitions with similar scale and strength. It is very important to objectively analyze the inclusiveness and openness of both cultures. This attitude towards the other culture directly determines whether the enterprise recognizes and appreciates the other culture and is willing to adjust some disadvantages in the original culture. Use penetration? The fusion mode shall meet the following conditions:
First of all, the acquirer should have rich experience in mergers and acquisitions, be at the international or at least industry leading level in business philosophy and management mode, have mature cultural integration operation means and skills, and have a large number of cultural integration talents who can skillfully cope with the impact and shock brought by culture.
Secondly, both sides (especially the acquirer) can tolerate the existence of multiculturalism. Chatterjee et al. (1992) confirmed that too much emphasis on the control of the acquired company will lead to bad results and fail to achieve the expected benefits. [10] Therefore, it is very important for the acquirer to be open to cultural diversity.
Third, both sides have good wishes for the M&A incident itself, and they are equal in cultural status. There is no phenomenon that one side surpasses the other, and both sides recognize each other's culture. They all think that each other's cultures are complementary and synergistic, so as to create a brand-new corporate culture, which can bring competitive advantages, and both corporate cultures have certain flexibility.
Verb (abbreviation of verb) conclusion
In the choice of corporate culture integration mode, the final cultural integration mode should be the result of comprehensive balance of subjective and objective factors, such as the requirements of M&A strategy, the strength comparison between the two sides, the organizational fit between the two sides, the preference of the two sides for the types of integration mode, the influence of relevant policies outside the enterprise, and the correlation of M&A types.
At the same time, in practical application, enterprises choose one mode, and other modes will be reflected to varying degrees. The real situation is often that these models are combined and used together, so as to accomplish the mission that a single model cannot accomplish, that is, the choice of cultural integration model is first reflected? Collaboration? Effect. Therefore, in the practice of cultural integration, there has never been a universally applicable cultural integration model.
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