Chinese Enterprises In Overseas Mergers And Acquisitions, Cultural Integration Strategy

Cultural integration is directly related to whether integration will be successful or not. After mergers & acquisitions abroad it plays an even more important role in integrating two sides into a new one. It is said by KMPG that 70 per cent of failures in mergers & acquisitions result from integration. Among those failures, culture integration is one of several most important reasons.From the point of firm culture, this paper analyzes the method selection of oversea mergers & acquisitions and strategy selection of cultural integration. With the factor of culture considered, firms refer to cross-border mergers & acquisitions, by which they enter another country, other than green investment. Analyzing from the view of ownership advantages, location advantages, internalization advantages & velocity advantages, that conclusion is more apt to be drawn .Considering different cultural elements, firms would refer to different specific mergers & acquisitions ways. This paper presents quantitative analysis and has drawn an important conclusion on how important the cultural integration is to integration result. That is that cultural integration is of the second importance among human resources integration, strategic integration and organization integration to integration result after mergers & acquisitions, only inferior to human resources integration.This paper summarizes cultural conflicts in firms which include cultural conflict in spirit, cultural conflict in institution and cultural conflict in materials and further deeply analyzes origins of cultural conflict between Chinese firms and firms of western mainly developed countries. Based on the analysis of several cases successful on cultural integration, this paper gives some ways for decreasing cultural conflict and difficulty in the process of cultural integration. Then it puts forward principle, process and integration strategy for cultural integration. There are four typical kinds of cultural integration strategy and different kinds of integration strategy should be selected according to different ways for mergers & acquisitions, furthermore it should be considered whether the culture of aimed firm is weak.After analyzing several cases of Chinese firms mergers & acquisitions abroad,...