On Culture Integration Of Chinese Enterprises' Cross-board Merge And Acquisition

In this paper, systematic analysis on basic theories and methods of cross-border mergers & acquisitions both in China and abroad, a large number of investigation on M&A activities, theories of international economics, cross-border mergers & acquisitions, corporate culture, organizational behavior, psychology, ethics, social science and also the research methods of system analysis, comparative analysis, theoretical research and applied research, normative analysis and case study, qualitative and quantitative analysis had been applied comprehensively and scientifically, to study the key elements, content, pattern and counter-measures in cultural integration of China's overseas mergers & acquisitions enterprises,which helps to distinguish the leadership of China's enterprises in cultural integration process and carry forward the"harmony value"of Chinese Confucius culture. Besides, this paper analyzed Lenovo's acquisition of IBM PC department on acquisition motivation of both sides, culture differences in nationality level and organization level, and analyses practically the paths, content, strategy of new Lenovo which presents theoretical guidance and methodology for other Chinese cross-border mergers & acquisitions enterprises in cultural integration activities.Cross-border mergers & acquisitions is the key feature in the contemporary world whose trading volume still in historic highs and trend of going to high level has not presented even under this world financial crisis. Along with the China's reform and opening-up, the competitive capability of China's enterprises will grow up and will be an active force in cross-border mergers & acquisitions field. The outbreak of the financial crisis presents a favorable opportunity for China's enterprises in cross-border mergers & acquisitions, However, cultural differences must to be faced by those enterprises and they must know that the cultural integration is the key in cross-border mergers & acquisitions activities. Therefore, this study has features of urgency and necessity, and has important theoretical and practical significance. The research project enriches those research achievements in world economic theories about cross-border mergers & acquisitions, cultural integration and develops the study on the theory field in China about cross-border mergers & acquisitions and cultural integration for China's enterprises. In practice, this research project will help to guide Chinese enterprises to master the magic weapon for winning in cross-border mergers and acquisitions activities and help to grow up competitiveness in international market, which eneasy to integrate into economic globalization.Chinese enterprises, which have experienced more than 30 years development process under the reform and opening up policy, China's cross-border mergers & acquisitions which broke through the traditional pattern has grown quickly in short time, present their remarkable characteristics whose capital do not follow their tradition way to invest in neighboring countries or less developed countries., and block investment goes up stream to flow to developed countries. The practice of China's cross-border mergers & acquisitions has challenged the current mainstream theory in international direct investment and cross-border mergers & acquisitions. The existing research achievements, in the field of the merger of enterprise from developing country to multinational giant from developed country which make enterprises of developing country to lead and integrate the culture of new enterprises merged is almost blank. Therefore, there is lack of theoretical guidance in the current cross-border mergers & acquisitions of Chinese enterprises and cultural integration .This research project can meet the current of cross-border mergers & acquisitions of China's enterprises and offer theoretical and methodological basis for China's enterprises in cross-culture integration.The research project comes to the point that it is inevitable to implement cross-border M&A for China's enterprises .Those elements such as the objective requirements of China's industrial upgrading, the Chinese enterprises to overcome the constraints of natural resources and strategic resources requirements, the Chinese government's incentive policies and a favorable global economic environment will promote China's transnational corporate mergers and acquisitions. Over the years, China has maintained a strong growth in exports and foreign exchange reserves has ranked first in the world so that China has freed itself from lack of capital and become surplus which make possible to invest overseas. Chinese enterprises those experienced the reform and opening up have gradually developed and grown-up with market competitiveness. A large number of outstanding national enterprises with international development view are rising. Entering WTO also provides Chinese enterprises with good conditions to invest abroad. Cross-border mergers and acquisitions of Chinese enterprises have achieved initial results. Chinese companies are also facing friction and conflict caused by East-West cultural differences .There are culture conflict in mergers & acquisitions enterprises caused by the cultural values differences, differences in rules of conduct, human resource management policy differences and customs of differences . Cultural conflicts in China's overseas mergers & acquisitions companies may cause low culture identity between Chinese employees and foreign employees, difficulty in staff settlement, negative emotion and even lead to irrational behaviors. According to cultural characteristics of Chinese and foreign enterprises, to establish the leadership for cultural integration ,mechanism for cross-culture communication and personnel management system with multi-cultural background is the key factors of cultural integration for cross-border mergers & acquisitions of China's enterprises.This paper also pointed that cultural integration of cross-border M & A of Chinese enterprises should take "seek common ground, step by step, people-oriented and full communication" as the principles. Corporate cultural values, business management, corporate culture, material culture and behavior should be integrated. For the selection of cross-border M & A cultural integration model, the combination of qualitative and quantitative methods should be adopted to reduce subjectivity and increase the scientific factors. The integration models selection should be dynamic, different model should be used in different stage witch determined by the characteristics of culture risk factors in different stages. As to the decision of integration strategy of corporate culture of M & A, we should light of the local conditions and realize the importance of the impact of the host culture on enterprise culture of mergers and acquisitions, the cultural integration should enter higher levels after both parties accept and identify each others.The research project takes the scientific nature, the systematic characteristic, the sensitivity, the combination of qualitative and the quantitative and the feasibility as a principle, analyzes the possible cultural risk from the environment level, the cross organization level, the organization level and the management level during the transnational merger, constructs the assessment indicator system about merger culture risk, appraise the risk degree of each target with the Deerfei law and the fuzzy judgment method. This research has provides the scientific basis to the management of risk factor and the selection of cultural conformity pattern.In this paper, under the financial crisis, the author analyzed the international and domestic environment for Chinese enterprises to go abroad, and pointed out that the financial crisis bring a favorable opportunity for Chinese enterprises' cross-border mergers and acquisitions, pointed out that"advance consuming awareness"based on self-centered idea, greed of laissez-faire market players, the lack of moral self-discipline" and other cultural factors are the important reasons for the financial crisis. Through economic and cultural interaction analysis, as well as the analysis of people's material needs are not met and urgent pursuit of spiritual and cultural needs caused by the financial crisis and put forward that Western culture has a strong demand to complement the alien excellent cultural elements. This paper explored the difference between western culture and Chinese culture: Chinese culture emphasis on spirit while western culture material; Chinese culture focuses on integration man with nature while the western separation of universe from man; Chinese culture focus on people to people relations however the Western culture man and nature relations; Chinese culture emphasizes collectivism, Western culture emphasizes individualism. The paper summarized that Chinese culture of "harmonious" concept, sense of anxiety and caution about the consumption, "collectivist" values and moral values of Confucianism, which have referential significance for the development of Western culture. In the use of the advantages of financial crisis has brought about the cultural opportunities for Chinese enterprises, we should actively promote the Chinese culture through cross-border mergers and acquisitions of Chinese enterprises, positively build a "harmonious" corporate culture, enhance the "vigilant in peace time" and "sense of crisis", encourage "benevolence", and foster the "collectivism" concept to strengthen the Chinese cultural elements in the cultural integration.In conclution,there are three creative new opinions in this dissertation.Firstly, the author argued that Chinese companies should hold the leading position for the cross-culture integration in the M&A projects. Secondly, the evaluztion index system of cross-culture risks had been established and the fuzzy comprehensive evaluation method had been applied in the reseach. Finally, based on economics theory, the author ratified the relation between economy and culture, and pointed out that financial crisis might centernly bring the increase of culture demand and the decrease of physical demand, therefore financial crisis causes both advantages and chalanges for Chinese companies to go abroad.This paper takes Chinese Lenovo mergering the PC service of IBM as an example, analyzes how to deal with the challenge on leader culture integration for the Chinese Enterprises. Take the motivation research, the cultural difference analysis, the culture risk assessment and the management analysis and so on, as the foundation, we studied the stage division of new Lenovo culture integration, the goal, the content and the pattern choice during the cultural integration, we will propose some suggestion to the new Lenovo culture integration, such as people oriented, peacefulness is prized, agreeing to disagree, proceeding in an orderly way. So we can set up the idea of people management, construct multi-dimensional and harmonious culture environment, and advance culture fusion innovation. Lenovo merge ring the PC service of IBM is a classic case that the Chinese Enterprise merger developed country giant multinational corporations; it has the significance to be profound representatively in recent years. The research about Lenovo leading culture integration has the important reflect meaning to the culture integration about Chinese abroad merge ring enterprise.