Research On Cultural Conflict Risks And De-risk Strategies Of Chinese Enterprises Through Overseas Mergers And Acquisitions

As the world economy grows continuously, the process of globalization has been more and more rapid, and a war without smoke called economic war began, every country wants to earn a place. How to improve their production technology? How to get more resources? How to capture more market share? And the foreign direct investment is the main form to achieve those purposes mentioned above, furthermore, the main way of foreign direct investment is overseas mergers and acquisitions. Overseas M & A is considered to be an important factor in developed countries to achieve modernization, and it is also an important way to reduce the gap between developing countries and developed ones. However, China’s M & A market has started relatively later, close to half a century than that of Western countries, which is inferior to both the practical and theoretical aspects. Under the situations that lack of experience on M & A, corresponding shortcomings on M & A ways and rich failure experiences on M & A, how Chinese companies to overcome these difficulties, and how companies to reflect where the problem? Although there are many other causes of mergers and acquisitions leading to M & A failures, empirical datas show that eighty percent of all M & A failures lie in the culture conflict risks. This paper attempts to study the influences of cultural conflict risks on corporate mergers and acquisitions.Firstly, based on the theory of domestic and foreign researchers, and the related theories sorted and summarized, this paper analyzes the culture conflict risks Chinese companies encountered refer to advanced theories. Then, combined with the development process of mergers and acquisitions upon Chinese enterprises, the paper articulates the current situation and characteristics of M & A in China, analyzes the differences and leading causes of the corporate culture in China and other countries, as well as the cultural conflict risk arising form. Boldly referring to advanced theories and combining with China’s current situation, the paper establishes the assessment index system on cultural conflict risks of corporate mergers and acquisitions; and takes the Geely’s M & A on Volvo as an example, then compares the influence of the various indexes on the acquisition process, and finds out that the effects of the different cultural levels in enterprises on mergers and acquisitions are not static and the characteristics of cultural conflict risks varies in different stage. Exploration in mergers and acquisitions, Geely meet across the risks mainly from the organization factors, the cultural collision period mainly is facing the risks from organization factors, and in the innovation integration period is in the face of business risk factors. Finally, the paper puts forward several related strategies and development proposals for Chinese M & A business to resolve the corresponding cultural conflict risks.