A Survey Of Cultural Integration In Mergers And Acquisitions

Nowadays with the development of globalization, mergers and acquisitions (M&A) have become the most important means to enlarge the enterprises'dimensions, strengthen their capacity, and enhance their effectiveness in the global business. But because of national and organizational cultural differences, cultural conflicts often happen with the cross-border M&A. As a result, many companies cannot gain what they have expected. Many of them only pay more attention to the developing strategies and financial factors before the M&A, and do not give enough consideration to the compatibility of their different cultures. This is the real reason for their failure.With the deepening of China's reform and opening up, some Chinese companies are involved in a series of cross-border mergers and acquisitions. From the experience of foreign companies, we can see that the chances of M&A failures are greater than success, especially in the field of international M&A. Many failures are caused by problems in cultural integration. How to deal with cultural differences and cross-cultural management on both national and organizational levels poses a great challenge for Chinese companies in their international mergers and acquisitions.The intention of this paper is to study the effects of both national and organizational cultural differences on Chinese enterprises'cross-border M&A. The paper, first of all, reviewed literature about culture and M&A, analyzed different cultures on different levels and management strategies before, during, and after M&A. After that, efforts have been made to analyze Lenovo's acquisition of IBM's PC division and TCL's merger with Thomson and Alcatel for the purpose of justifying the hypothesis put forward in the Third Chapter, which claims that Lenovo's success in M&A is, at least partially, the result of their successful culture integration, while failure in cultural acculturation, in a certain sense, led to the disappointing result of TCL's international M&A.The conclusion summarized the whole paper first, and then offered some recommendations on how to make better cultural integration for international M&A process, hoping that they could be of some use for Chinese companies'cross-border mergers and acquisitions.