The research aims to analyze that to what extent the organization culture can help organizations merging, and how to manage or develop the organization culture. The objectives are as follows: To identify the organization culture could help organizations merging. To demonstrate that to what extent the organization culture can help organizations merging with data analysis. To analyze the strategy of manage or develop the organization culture based on the practise of two well-known European and American companies. To determine the future perspective of the organization culture in the development of the organization merging and management. Based on the above aim and objectives of this research, the author mainly researches the following questions.
How is the organization culture development status in European and American companies? What is the contribution and position of organization culture to the development of organizations? What is the impact of organization culture on the organizations merging? Whether the organization culture can help organizations merging? Why the organization culture can help organizations merging? What extent the organization culture can help organizations merging? How to manage or develop the organization culture for European and American companies?
The complex posed by the cultural characteristics of different forms, is a stable long-term cultural values and historical traditions and unique management style. It permeates daily life and production and operation activities, rooted in the psychology of the employees. The business combination is the breaking of the original corporate culture model, in absorbing the cultural advantages of both sides on the basis of the formation of a new corporate culture. This determines the two cultures (especially backward culture) to be severely affected, along with conservative and cooperation of the entire integration process, backward and advanced contest contradictions in the integration process, conflicts. Therefore, the business combination cultural conflict is inevitable; it is a concentrated expression of the corporate conflict. 1.3.1 The reason of conflict between the corporate cultures in the process of merger The corporate culture is a long-established corporate culture concepts and historical traditions and unique business spirit and style, including the guiding ideology specific to an enterprise development strategy, business philosophy, values, ethics, and customs.
Its constituent elements can be summarized in five points: the business environment is the most important factor shaping corporate culture; corporate values forming the core of the corporate culture; corporate heroes are the values of the “personification, to follow the example of the specific model of staff; ceremony and ceremony it is a plan of the day-to-day routine, a dynamic culture corporate values can be a sound and development; the cultural network communication companies grassroots organizations passing awareness of values and heroes channels. corporate culture guide corporate members consciously make employment options in line with corporate values, specific values ”¹will motivate employees to meet the business needs of behaviour exhibited in a specific environment; affected by the same values ”¹and code of conduct of the employees in different time will inevitably tend mutually coherent. The corporate culture has the multifaceted double feature. First, the uniqueness and diversity coexist. The corporate culture is an objective reality, only the pros and cons of high and low points, no presence or absence of the other. The enterprise has a unique corporate culture. Due to industry, industry, ownership, regional history and culture is different, different enterprises even greater differences in corporate culture, which is the uniqueness of the corporate culture. As the corporate culture is mainly an ideological thing.
Thus, it has strong historical continuity, changes flaccid. Various corporate culture cannot be as easily change and fusion equipment updates, asset restructuring, corporate restructuring, which constitutes a reorganization after the corporate culture of diversity. They tend to continue to exist within a very long time and play a role. Conflict and friction become a corporate restructuring of the cultural barriers. Secondly, Positive and negative coexist. After the reorganization of the diversity of corporate culture have positive and negative two opposing characteristics. The positive aspects of performance at all levels of the corporate culture smooth integration of complementary advantages, and in the training and selection process for both sides agree that the values and norms. Such as combination, both exclusive their own arrogance psychological, and absorb the essence of each other in mutual understanding, and thereby create a stronger corporate culture on the basis of their existing corporate culture essence. The negative aspects of performance for the restructured corporate culture conflict produce adverse factors hinder enterprise development. Considerable force union, because of the strength of the two sides evenly matched, it is easy to admit defeat the situation, both sides consider themselves excellent and refused to accept the new culture and communication, and the parties cannot understand each other, and the construction and implementation of the impact of restructuring the corporate culture, which a powerful combination is not strong, weak and weak after the joint more weak condition. Third, Progressive and reverse sexual coexist. Corporate restructuring and cultural integration need to go through some of the run-in period, and impossible for a pier, which has a progressive. And performance is a special kind of reverse that the reorganization of enterprises material culture, system culture first run-in, rather than spiritual and cultural materialized result of the process of integration between the two sides. General corporate culture always follow the spiritual and cultural – institutional culture – material culture – the new spirit of the culture – a new institutional culture – the law of the circular motion of the material culture constantly development, restructuring enterprises culture level fusion, but rather to the contrary.
After the corporate restructuring is always to material cooperation, and then develop the system, which deep-seated influence of the spirit of enterprise culture, with the reverse sexual. If you ignore the above features of the corporate culture, and asked to produce some kind of racial superiority, miscommunication, and self-cantered implementation and management, it will inevitably lead to a deep-seated cultural conflict in mergers and acquisitions subject. 1.3.2 The type of conflict between the corporate culture in the process of merger and reorganization
In this paper, research methods include literature review and interviews. In this study, the literature is from related papers, books, mainly from the review of different countries’ research and research system analysis. This paper is mainly used for interview of managers and staff in European and American famous companies and then collects relevant data. The population for the study will be the managers and staff in European and American famous companies with specific interest in those who played an important role in the development of organization. Twenty samples representing twenty different ideas will be taken into research. This means that the research is design the study to be both qualitative and quantitative while an analysis secondary research data will be done to put the research into context. The responses will be analyzed using the Microsoft Excel.
The dissertation is divided into five chapters namely introduction, literature review, research methodology, findings and discussions, and conclusions. In chapter one, the research background, the aim and objectives, research rationale, research instrument and process, thesis outline underlining the conduct of the research as well as the relevance of this study for both academic and non academic (industrial) purpose are presented. In chapter two the researcher discusses the literature review, which contains the strategy, the definition and characteristic of the organization culture, the content of organization culture, the cross-cultural issues of cross-border mergers enterprises, and the reason and type of the organization culture conflict in the process of organization. In order to facilitate ability make references, appropriate referencing study has been employed in the in-text write a corresponding out-text format at the end of the study. The researcher was careful to select and discuss the most recent where possible forms of academic and non academic literature. In chapter three, the researcher has expounded on the methodology used in this research and has provided justification for the use of each of the methods.
The section also highlights the choice of the population and the selection of an appropriate sample and data collection instrument. The chapter ended with a highlight of the test of validity of the instruments to be used in collection data as well as the quality of supporting staff with who the researcher undertook this study. In this study the data analysis will be very much depended as the main analytical device for the collected data. Some of these include frequency distribution tables, and test of significance. This will be discussed extensively in the fourth chapter of this study. In chapter four, the analysis and findings are present. The conclusions of this research will be the last part of this study and would be handled in the fifth chapter. As usual references to this study and other information needed for ease of study will be provided in the appendix .
The organization culture is constituted by the values of the enterprise, operating criteria, management style, entrepreneurship, ethics, and development goals which are agreed by all employees in the business practice (V. P.Clinton, 2007). Some scholars believe that the organization culture should be divided into two levels, broad and narrow aspects (Roslender, Robin; Hart, Susan J, 2002). The organization culture in the broad sense refers to the combining of the spirit wealth and material wealth which the enterprises process in the process of production and management; the narrow definitions indicated that the organization culture is ideology in the development process, habits and values, and its core is the company’s values (Perry, John; Woods worth, Anne, 2005). Many scholars believe that the organization culture is the combination of material and spiritual, and also an integration of software and hardware. The external cultures are present with the plant equipment, raw materials and products; in addition, the internal cultures rely on the performance of enterprise management system, behaviour patterns of the spiritual world (H. Chen, 2006). From the definition of the organization culture that scholars gave above, their opinions were varied, the coverage is not consistent.
Some observed from the point of view of the material carriers, some focused on the spiritual aspects, others put both unify visits. While these visits are different, but on the whole, for the understanding of the organization culture, they all thought that organization culture should focus on people, which was a human-centred approach to management, enterprises should be the organizations with a common mission and responsibility. The core of the organization culture is a shared value, common beliefs of enterprise employees; it is the philosophy of guiding the behaviour of businesses and business people (Alberto S. Pereira, et, 2008).
The characteristic of the organization culture mainly include the following aspects:
The cultural styles of companies in different societies, different nationalities and different regions are different, even if the two enterprises may be very similar or even in the same environment, facilities management organization and system, their culture are showing different characteristics and charm (Bisin Alberto, Thierry Verdure, 2001). This is decided by the business survival social environment, geographic, economic and external environment, as well as the industries in which the special nature of the enterprise, to decide its own operation and management characteristics of the entrepreneur’s personal style and overall quality of staff and internal conditions.
The organization culture is undoubtedly a common value judgments and values, which is the “consensus” and “identity” of the majority of employees (Christine M, 2006). Excellent organization culture particularly paid attention to the Group and the group mind, the pursuit of “integration” and “shared vision” (Avlonitis, George J.; Hart, Susan J.; Tzokas, Nikolaos X, 2000), replacing the whole consciousness against individual consciousness. The organization culture is not to force people to comply with rigid rules and regulations and discipline, but emphasis on cultural identity, emphasizing the sense of autonomy and initiative of the people, through the consciousness of inspired people to achieve self-control and self-discipline (Richter, F.J.; Vettel, Kai, 2006).
3. Relative stability
Generation of culture presented a long-term process, and cultural role has stretches (Schein EH, 2009). A positive organization culture, in particular the formation of Habitat core of values, often take a very long time, requires a model of advanced people, need some trigger event, requires the patience of the leader. Organization culture as a “sub-culture” (Roslender, Robin; Hart, Susan J, 2003) also has the general properties of the culture (Ricky Griffin, 2010). Once formed, it will become the soul of business development, it will not chop and change, not adjust and change with the change of the leadership of the organization and fundamental, it will play a important role in the enterprise for a long time.
Organization culture can be divided into the business philosophy, entrepreneurial spirit, corporate ethics, teamwork, and corporate image (Bhimani, Alnoor, 2003). The business philosophy is usually considered to be in the day-to-day operations of the enterprise methodology (V.Scotter, 2006). Intense and complex market competition, using the scientific method to guide enterprise survival and development, which is a business philosophy content. The spirit of enterprise is the soul, which is the core of the organization culture. It refers to the mental outlook of the corporate mission, purpose, vision of development and employees (Williamson, Bill, 2001). Corporate morality is used to adjust between the code of conduct and businesses and their customers, internal employees (Williamson, Bill, 2001). Moral regulation does not have the force factor, but from an ethical relationship perspective, it is essential. Moral restraints and constraints could make people understand the values oriented. The team spirit is the concept of collective organization members and it is the psychological factors of forming cohesiveness (Claver, Enrique; Llopis, Juan; Garcia, Daniel; Molina, Hipolito, 1998). Regardless of rank, qualifications or background size, all employees of the enterprise should be united under the guidance of the same values forward, and concerted efforts to make the efficient operation of enterprises.
The corporate image means that it should be recognized by consumers and the general public through the external characteristics (V.Scotter, 2006). LOGO, identifier are the intangible assets which could continue to add value with the expansion of corporate influence. The theoretical system of the organization culture outlined five elements, which contains enterprise environment, business values, model employee, the form of corporate etiquette and cultural networks (Perry, John; Woodsworth, Anne, 2005). Enterprise environment is different from the internal office environment, which contains the aspects of the business direction, corporate social image, the enterprise outside (Ketchen Jr, David J.; Giunipero, Larry C, 2004) and so on. Operating values are the core of the organization culture, the unite of values ”could make internal members have a unified behaviour criteria, good and evil, right and wrong could have clear identified standards (Bhimani, Alnoor, 2003). Model employee means that the excellent staff who dedicated to companies under the guidance of the organization culture (Claver, Enrique, et, 1998). The correspondence between organization culture and exemplary employees likes the corresponding soil and flowers. The business etiquette form of the enterprises refers various recognition awards, as well as all the business values interpersonal activities. Employees to comprehend cultural connotation of the spirit in the lively activities are more effective than institutional constraints (Irani, Zahir; Sharp, John M, 1997). Cultural network is mainly used for the dissemination of organization culture, internal corporate employees wish and social radiation function. Objectivity, stability, openness, flexibility, uniqueness characteristics; organization culture also has cohesion function, constraints, function, value-oriented functions, social and radiation (Perks, Helen; Easton, Geoff, 2000).
The enterprises use resources in the world; combine with host locally owned human resources, natural resources, and even the size of the market, and other advantages in the form of cross-border mergers which contain acquisitions, capital, technology, management skills, market linkages, research and development, which could expand transnational business, achieve complementary advantages and become the main form of enterprise international business on a global scale (Davis, R. C, 1991). International companies in cross-border mergers and acquisitions will inevitably encounter the unprecedented opportunities and challenges in a different cultural background and geographical environment. The opportunities: cross-cultural advantage In different cultural backgrounds, different social customs, beliefs, traditions, market conditions, technical level, human natural resource conditions could create market opportunities and high profit return for international companies. This can be reflected in the “cross-cultural superiority” (David Chart, 2002) brought in multinational operations.
John Dunning’s eclectic theory referred that companies only have ownership, internalization, and location-specific advantages, in order to engage in foreign direct investment. In different cultural backgrounds, different socio-cultural practices, beliefs, traditions, market conditions, technical level, human natural resource conditions could create market opportunities and high profit return for international companies. This can be reflected in the “cross-cultural superiority” (Wagner, Stephan M.; Johnson, Jean L, 2004) brought in multinational operations. World countries such as the U.S. McDonald’s used the multinational operations, its “fast-food” culture can be radiated to different cultural backgrounds, including the Asia-Pacific region (Wagner, Stephan M.; Johnson, Jean L, 2004). Challenges Culture to the international M & A business operator brings opportunities, but it is a huge challenge. Different cultural environment, as well as the different economic, social and political factors must form larger cultural differences. Due to the evolution of the culture is a long and slow process, these cultural differences in terms of the enterprise, will not be eliminated over a period of time, and may remain stable over time. The objective existence of cultural differences, a cultural conflict between enterprise and business executives and employees is the formation of a “culture shock” (Cheng Liling, 2005) psychological reaction.
In a specific international corporate acquisitions, the cultural causes of the conflict: the ethnocentric, improper use of management practices, the different perceptual miscommunication, cultural attitudes, and so on (Wagner, Stephan M.; Johnson, Jean L, 2004)
Cultural conflict will lead to a series of consequences:
Cultural conflicts arising from cross-border mergers and acquisitions of enterprises, a desire to achieve a successful business enterprise, no doubt is a great challenge, if not for effective management, it will result in the loss of international corporate market opportunities and the low efficiency of the organizational structure. Internal management, due to the different values people, living life goals and behavioural norms will inevitably lead to increased management fees, increasing the difficulty of the integration and implementation of corporate goals, improve the running costs of the enterprise management. In external operations, due to the cultural differences of language, customs, values makes more complex operating environment, thereby increasing the difficulty of market operators(Perks, Helen; Easton, Geoff, 2000). Except the above discussion, lots of scholars analyzed the cross-cultural issues of cross-border mergers enterprises. Through the analysis of the culture conflict, the essence of enterprise culture was explained and the integration modes were analyzed. Meanwhile, in 2010, Song Ying combined with the case of “TCL and Thomson’s merger”, the process of enterprise cultural integration was designed. It is meaningful for the enterprises in China to resolve the same questions (Song Ying, 2010).
The complex posed by the cultural characteristics of different forms, is a stable long-term cultural values and historical traditions and unique management style (Dvaid Chart, 2002). It permeates daily life and production and operation activities, rooted in the psychology of the employees. The business combination is the breaking of the original corporate culture model, in absorbing the cultural advantages of both sides on the basis of the formation of a new corporate culture (V.Scotter, 2006). This determines the two cultures (especially backward culture) to be severely affected, along with conservative and cooperation of the entire integration process, backward and advanced contest contradictions in the integration process, conflicts (V.Scotter, 2006). Therefore, the business combination cultural conflict is inevitable; it is a concentrated expression of the corporate conflict.
The corporate culture is a long-established corporate culture concepts and historical traditions and unique business spirit and style, including the guiding ideology specific to an enterprise development strategy, business philosophy, values, ethics, and customs (Schein EH, 2009). Its constituent elements can be summarized in five points: the business environment is the most important factor shaping corporate culture; corporate values forming the core of the corporate culture; corporate heroes are the values of the personification, to follow the example of the specific model of staff; ceremony and ceremony it is a plan of the day-to-day routine, a dynamic culture corporate values can be a sound and Development; the cultural network communication companies grassroots organizations passing awareness of values and heroes channels. corporate culture guide corporate members consciously make employment options in line with corporate values, specific values will motivate employees to meet the business needs of behavior exhibited in a specific environment; affected by the same values and code of conduct of the employees in different time will inevitably tend mutually coherent (Richter, F.J.; Vettel, Kai, 2006). The corporate culture has the multifaceted double feature. First, the uniqueness and diversity coexist (Chow, Chee W.; Harrison, Graeme L, 2009). The corporate culture is an objective reality, only the pros and cons of high and low points, no presence or absence of the other (Bhimani, Alnoor, 2003).
The enterprise has a unique corporate culture. Due to industry, industry, ownership, regional history and culture is different, different enterprises even greater differences in corporate culture, which is the uniqueness of the corporate culture. As the corporate culture is mainly an ideological thing (Fletcher, K; Wright, G, 1996). Thus, it has strong historical continuity, changes flaccid. Various corporate culture cannot be as easily change and fusion equipment updates, asset restructuring, corporate restructuring, which constitutes a reorganization after the corporate culture of diversity (Bhimani, Alnoor, 2003). They tend to continue to exist within a very long time and play a role. Conflict and friction between each other become a corporate restructuring of the cultural barriers. Secondly, the enthusiasm and the coexistence are negative. After the reorganization of the diversity of corporate culture have positive and negative two opposing characteristics. The positive aspects of performance at all levels of the corporate culture smooth integration of complementary advantages, and in the training and selection process for both sides agree that the values A‚”¹A‚”¹and norms. Such as combination, both exclusive their own arrogance psychological, and absorb the essence of each other in mutual understanding, and thereby create a stronger corporate culture on the basis of their existing corporate culture essence.
The negative aspects of performance for the restructured corporate culture conflict produce adverse factors hinder enterprise development (V.Scotter, 2006). Considerable force union, because of the strength of the two sides evenly matched, it is easy to admit defeat the situation, both sides consider themselves excellent and refused to accept the new culture and communication, and the parties cannot understand each other, and the construction and implementation of the impact of restructuring the corporate culture, which a powerful combination is not strong, weak joint condition. Third, the coexistence is progressive and reverse (Claver, Enrique, et, 1998). Corporate restructuring and cultural integration need to go through some of the run-in period, and impossible for a pier, which has a progressive. And performance is a special kind of reverse that the reorganization of enterprises material culture, system culture first run-in, rather than spiritual and cultural materialized result of the process of integration between the two sides (Irani, Z.; Beskese, A.; Love, P. E. D, 2004).
General corporate culture always follow the spiritual and cultural – institutional culture – material culture – the new spirit of the culture – a new institutional culture – the law of the circular motion of the material culture constantly development, restructuring enterprises culture level fusion, but rather to the contrary. Always the first material cooperation corporate restructuring, and then develop the system, which deep-seated influence of the spirit of enterprise culture, with the reverse sexual. If you ignore the above features of the corporate culture, and asked to produce some kind of racial superiority, miscommunication, and self-centered implementation and management, it will inevitably lead to a deep-seated cultural conflict in mergers and acquisitions subject.
1. Corporate culture change According to analyze and conclude some scholars’ views about corporate culture change, we could know that corporate culture change includes three aspects: behavioural and cultural change, institutional culture change and spiritual and cultural change (Chow, Chee W, et, 2009). (1) Acts of cultural conflict Corporate behavior and culture means that employees in the production and management, learning activities and cultural entertainment. It includes a cultural phenomenon in business, education, advocacy, interpersonal activities, cultural and sports activities (Roth, Martin S, et, 2004). It is a corporate management style, mental outlook; the interpersonal dynamic embodied the spirit of enterprise, the corporate values of refraction. The personnel structure is divided, including entrepreneurial behaviour, the behavior of the enterprise model figures, the behavior of the employees and corporate behaviour (Irani, Z.; Beskese, A.; Love, P. E. D, 2004). M & A behavior occurs, the original mission of the enterprise will be changed, and corporate goals will change behavior to achieve organizational goals as a guarantee cultural friction, collision and conflict can also occur.
Especially in the case incurred by the merger to shake our corporate values and basic spiritual pillar collapsed, this conflict is more intense. Cultural change of corporate behavior entrepreneurial behavior, and establish exemplary hero and regulate employee behavior to change. These measures tell employees what is to do and what not to do, making the employees (especially combined enterprise employees) acceptance of the culture change corporate behavior. Plasticity is very strong, so the change of the culture of corporate behavior, the risk and difficulty of relatively small, but also not to be taken lightly, and care should be taken to integrate. (2) System of cultural conflict The institutional culture mainly includes three aspects of corporate leadership structure, corporate organizations and enterprise management system (Wagner, Stephan M.; Johnson, Jean L, 2004). Cultural transformation of the enterprise system is preparing for the behavior of the culture and philosophy of cultural change, institutional change corporate culture, and corporate culture change is likely to be strangled in the cradle. After the merger, the change of the structure of the old and new material layer will cause the system update; will inevitably lead to the replacement of the leadership, the organization and management system to adjust. In this transformation process, the employees often have a nostalgic psychological, tend to be more superstitious respect, miss the original system, it is difficult to adapt to change, so that the new system culture conflict intentionally or unintentionally, in the consciousness and behavior, cultural conflicts of the old and new systems inevitable.
The impact of conflict such as income distribution system and the system of cadres promoted often have system-wide, comprehensive nature and the entire process (Ketchen Jr, David J, 2004). Group’s basic assumptions and values-based differences lead to different decision-making and a labor system often become the forefront of the conflict. In short, in the event of the merger integration, enterprise system of conflict is very obvious, destructive conflict will be immediate. (3) The spirit of enterprise culture conflict The spirit of enterprise culture refers to the enterprises in the process of production and operation, subject to certain social and cultural background, ideology affects the long-term formation of a spiritual achievements and cultural concepts. Including the contents of the entrepreneurial spirit, business philosophy, business ethics, corporate values, corporate style and features, is the sum of the corporate ideology (Roslender, Robin; Hart, Susan J, 2003). At the core of the entire corporate culture systems, is the superstructure (Avlonitis, George J, et, 2000). For the merging parties, the spiritual and cultural differences and cultural conflict is the most obvious and the most difficult to mediation. In general, the difficulty of the enterprise concept of cultural change and the implementation of the risk in the whole cultural change is the biggest, they need time would be relatively long.
In a business combination, the spiritual and cultural will first be intense shock, which there are three main reasons why (Roslender, Robin; Hart, Susan J, 2002): (1)enterprise value concept as the core layer is difficult to change, because the employees thinking and behavior has become the corporate values of the original guidelines, once encountered challenges or update often produce rejection, loss, difficult to adapt, thus preventing the formation of new values and establish; (2)spirit of enterprise as the main body of the corporate staff groups awareness, has been recognized by all staff, subjective consciousness impact or by negation, collapse of the spiritual pillar of the staff, the employees will naturally generate resentment (Roth, Martin S.; Money, R. Bruce; Madden, Thomas J, 2004); (3) the original enterprise business philosophy, business ideas, the mode of operation is negated, employees will feel lost and confused, and often a new business philosophy, business ideas, business methods take the attitude of rejection and resistance.
Most of the purpose of cross-border mergers rapid concentration of intangible and tangible assets of enterprises of different countries, and enhance the complementarily of resources, and reduce unnecessary duplication of investment, individual enterprises cannot form a strategic advantage through the management and financial synergies. With the recovery of the world economic boom in the 1990s, the fifth corporate merger wave sweeping the world, involved in a wide range of industries, prominent feature in cross-border mergers as the main, it is also known as a wave of cross-border mergers.
In January 2004, TCL merged Thomson of France, the formation of TTE company, Joint development, production and sales of color TV and its related products and services. In April 2004, TCL merged Alcatel of France, set up a mobile phone joint venture company T & A. However, the merger failed to meet the TCL is expected to raise the overall efficiency of the target, on the contrary , the TCL Group’s net profit reduce by half in 2004, a direct result of the group loss is the poor performance of TTE and T&A. The worse, the merger resulted in a large number of staff leaving. The end of 2004 to March 2005, the senior manager of the French employees quit their job, the first-line managers of the marketing and sales have also left, TCL into an unprecedented predicament.
TCL chairman Li Dongsheng admits:”The success of integration depends on the success of the cultural integration.” For the failed to merge TCL Thomson, investigate its reason, there are mistakes in strategy , marketing, staffing, but more important is the cultural aspect of the conflict. The following is most obvious of the two cultural in TCL, “vassal decentralization” and “internal entrepreneurs system” analysis.
TCL culture is a major feature of the- vassal decentralization. Li Dongsheng has been used to separation of powers, and his eyes on the results, rarely ask the details of the management of the subsidiaries. So TCL focus on act quickly, the staff overtime is a normal phenomenon. These kinds of the “separation of powers” culture make the TCL former prosperity. So combined TTE also continue to use this method: adopt the way of “basic salary plus commission” in pay, results for rose incentives, do bad substitutions. In Thomson, the influence of French culture, the staffs focus on quality of life, pay attention to leisure time, they think the work on the work, and the rest will rest. It is said that Li Dongsehng has hold a weekend meeting in French, but found that all persons off the phone. Li Dongsheng was incredible! Furthermore, for example, the sales operation, the scheduled pay levels in France is relatively stable, with not much of a relationship in sale. Cultural differences “vassal decentralization” brings two consequences: First, a large number of jobs Thomson adjustments by TCL sent officers to fill key posts, leading to downgrades France management highly dissatisfied; second is a pay system result of changes in the French the grassroots employee satisfaction plummeted.
TCL culture has always been to encourage internal entrepreneurship, challenged in the joint venture. TCL executives employing standard is to have the entrepreneurial spirit, adventurous people. TCL Corporation meeting, sitting in front of the good performance of sector representatives, sat in the back of the poor performance of the sector representatives. Such an encouraging entrepreneurship culture, cultivating a number of management personnel, early in the cross-border merger, they placed in the position of the core of the new group of companies. Thomson hopes that business leaders have received a good education, have the theoretical knowledge and scientific management methods. That TCL assigned a large number of the arbitrariness of the “internal entrepreneurs”, like a “tyrant”. The new leadership with a significant TCL cultural identity cannot establish authority employees in France before. The consequences: On the one hand, which was managers dictate the TCL way, a large number of French employees choose to leave; On the other hand, the Chinese management staff work difficult, resulting in a decline in loyalty and turnover rate rise. Thomson TCL merger is a typical case of a cultural integration of the failure of the merger failed.
Like this in the growing number of cross-border mergers in the majority of Chinese enterprises. JP Morgan’s recent report pointed out that China has become the center of Asian merger, will also become the main battlefield of the world merge. However, the opportunities and challenges coexist. At present, Chinese enterprises generally lack the merger business integration, transnational business and cultural integration experience. Overcome the cultural differences between different countries and territories is the soft underbelly of the problem of cross-border mergers, and how to solve this problem, China has a long-term vision of the strategic layout of the enterprise must be thinking proposition. Cross-border merger cultural integration must be based on the principle of different cultural characteristics and integration of the merging parties, select compatible mode. Thus, reduce or avoid destructive cultural conflict, and enhance the corporate culture of the match.
To more specifically Ming integration steps below through the Lenovo acquisition of IBM’s PC business case to study the process of the implementation of the cultural integration of the cross-border mergers and acquisitions of Chinese enterprises.
After several rounds of negotiations, on December 8, 2004, Lenovo announced a definitive agreement with IBM on mergers and acquisitions, and Lenovo shareholder approval by January 27, 2005. Announced on May 1, 2005, Lenovo completed the acquisition of IBM’s global PC business. Lenovo Group of the IBM PC business including the Think brand scored $ 650 million in cash and $ 600 million worth of stock. After the acquisition is completed, IBM holds 18.5% of the shares of Lenovo Group, Lenovo will control about 45% of the new Group shares. According to the agreement, Lenovo can use the IBM brand again within five years. So far, Lenovo has become the third largest PC manufacturer in the world, second only to Dell, HP.
Lenovo’s corporate culture from the beginning a business today, experienced a total of three main stages: the course of development of the survival of the culture – strict culture – the family culture. Start at the beginning of “survival of the culture”, when an important feature of the corporate culture of professionalism and a sense of crisis; later, with the expansion of business scale, especially Yang Yuanqing, led by the young people to leadership posts, Lenovo cultural transition to a” strict culture “stressed” serious, strict, proactive and efficient “doing things the principle; 2000, the association has proposed the concept of” family culture “and to promote” equality, trust, appreciate, affection, “the concept, which also conform to the in company strategy to “service” the transformation of the objective need, within the company to promote staff cooperation, support and autonomy, and thus support the company’s external service-oriented business, employees and customers to have experience to family warmth, thus forming a “to people-centered Lenovo customer first “and realistic, enterprising, innovative spirit. In comparison, IBM company established in 1914 by its founder the old Thomas Watson of conduct. Until now, these values remain as the cornerstone of the company, it’s include respect for the individual, must as far as possible to give customers the best service, and must be the pursuit of excellent performance, this three-tiered progressively progressive relationship.
This concept of corporate culture as the company’s growing lasted for nearly a hundred years. In 2004, company executives start “value jam” program, more than 57,000 employees over thirty thousand kinds of suggestions and comments, one of the 35 best views as IBM should be “what” and “how” guidance thinking. A concept has been IBM guarantee of success: “IBM is the service. This is not just for IBM, but also requires each company to sell IBM products follow the same principle, which makes IBM’s move to meet customer needs as a precondition. By comparison of Lenovo and IBM corporate culture, it is not difficult to find, for the analysis of the corporate culture; it should focus on the core layer, that profiling on a spiritual level. The three levels of the corporate culture is it progressive step by step, spiritual layer to guide the appearance of the material layer and system layer, material layer and system layer and reacts to the changes in the spiritual dimension values. For this reason, it might be Lenovo and IBM’s core values, the similarity of the comparison. Table 4.1 the comparison of Lenovo and IBM corporate culture Lenovo Group’s core corporate culture(values) IBM’s core corporate culture(values) People-oriented, customer first Dedication to every client’s success Enterprising, innovative Innovation that matters, for our company and for the world Realistic Equality, trust Trust and personal responsibility in all relationship Although mergers and acquisitions both corporate culture are some differences in the expression, but in terms of core values, and not diverging too much, which reduce a lot of resistance to cultural integration.
According to the comparison of the corporate culture of the two companies, established a complete set of corporate cultural integration program to make it consistent with the whole process of cross-border mergers and acquisitions. Corporate culture fusion process is divided into early, middle and late stages, as shown below: Figure4.2 Cultural integration of Lenovo and IBM’s M & A business process diagram The first step: the formation of the group of corporate cultural integration is temporary, its mission until the new corporate culture has been established to fusion assessment report as standard.
The number of the group should not be too much, requires the formation of reference Management magnitude of 6-7 people. Including: the main person in charge of the new enterprise & A person responsible for the implementation of the merger plan of the two sides each one, Training or a person in charge of the human resources department, one person in charge of publicity and planning, one person in charge of performance evaluation, corporate culture expert (can external). These seven individuals, in addition to the corporate culture experts, and other needs is head of M & A parties the original’especially familiar with their own circumstances, good coordination within the enterprise have an influence on the sector. By the person in charge of the new enterprise is responsible for the operation of the entire team, he also requested that the initiator of the merger plan, such cross-border M & A strategy and corporate culture can combine fusion progress. The corporate culture experts play the functions of the General Staff, as an outsider, a more objective evaluation of the integration of corporate culture. The structure of the entire group as shown: Figure4.3 Block Diagram of the corporate culture fusion group members The second step: Lenovo and IBM’s integration of corporate culture to corporate culture compatibility survey as a starting point for the implementation. The investigation should be responsible for the corporate culture experts. The results of the investigation because they are independent of the enterprises, more objective, to reduce the possibility of cultural conceal or fictional culture.
Meanwhile, the enterprise culture in the aspects of the analysis should focus on contrast “spirit level” this fundamental difference. Fortunately, Lenovo and IBM are not very different. IBM to provide better service, Lenovo is to create well-known international brands. The long-term strategy is depending on each other, it is easy to set up spiritual new enterprise values. The third step: after the end of the investigation, we can use the method of combining the two corporate cultures; corporate culture is described more clear and easy to understand. Lenovo and IBM converged core values A‚”¹A‚”¹of corporate culture should include four aspects: “customer achievements, entrepreneurship and innovation, pragmatic, mutual trust “. This is a high-level summary of both culture, in the process of cultural integration in the future, you should always in the four aspects as philosophy, regulate the standards of conduct. Meanwhile, taking into the differences of the two company’s regional culture, on the same affairs understanding and treatment will have a deviation. To formulate a more detailed publicity and training programs for publicity and training specialist, in kind, pictures, movies and data from each national cultural awareness and inspire both employees recognize each other’s interest, and organize various lectures, seminars will be a series of direct exchanges, increase mutual understanding, particularly in the form of case to find out the typical difference between the two sides deal with various matters, and to promote understanding of each other’s way of thinking in the discussion, and to identify mutual accept a viable program.
The fourth step: the results according to advocacy training, as the data on the existing enterprise system improvements necessary to establish a standardized system layer mode. Then, from the grass-roots workers and senior leaders, the two angles at the same time behave reform. “Both ends of the first”, middle managers often would do well to follow the footsteps of the senior, the clear purpose of the reform, and junior officers is a specific implementation of the main cultural integration of various behavior directly bearers. If you do not keep up with their thinking and understanding, will affect the overall effect of the fusion. The improvement of the behavior is the requirements in accordance with the instructions of the system layer. By the senior as a mentor, as by the grassroots practitioners, both good combine cultural fusion from the original two enterprises into the internal cultural communication. Avoid cross-border mergers and acquisitions in the country’s cultural differences, and gradually establish a cultural exchange mechanism, from the overall perspective of the enterprise, For example, the use of IBM employees are willing to take the initiative to express the characteristics of personal thoughts, often prescribe some discussion, to achieve the purpose of the exchange; China’s Lenovo employees can set up views mailbox closed form opinions exchanges. Step Five: After a period of running, the new corporate culture has been gradually formed, when the need corporate culture fusion group supervision and evaluation.
Evaluation of such supervision according to a new corporate culture as the criteria, the emergence of all kinds of unexpected situations and solutions to judge, requires it to be processed in accordance with the provisions of the system, and considering the lack complemented makes each kinds of system dynamic perfect. If there is a new cultural produce, it is the need for the information feedback in order to convenient publicity and training to the culture. Step Six: cross-border M & A strategy is basically completed, the group cultural integration make a written report of the assessment. Analysis of existing strengths and weaknesses, and to be considered from the perspective of the global ,especially corporate culture and a variety of other resources the combination of financial, staff mobility, technology development and other fields, whether the new culture of the enterprise can be good to promote growth rather than hinder enterprise development. At the same time, if the new culture has been established, will have timely dissolution of cultural integration team to them as role models, as a new culture of practice, they play in the M & A business.
After the earlier survey analysis shows that, on mergers and acquisitions, management issues, mainly the following reasons:
Cultural differences is its cultural ideas from each country, ethnic, groups, organizations, and the formation of different cultures, different countries, social systems, economic development, religious beliefs, ethnic distinction, character traits, level of education, cultural accomplishment formation culture. The connotation of cultural differences including many aspects East-West cultural differences, countries cultural differences, differences in national culture, regional cultural differences, cultural differences, different historical periods and cultural differences, and so on .they exist in the various fields of management, process corner, influence and even determine their business model development toward efficiency, performance effects even success or failure.
People of different cultural background, business philosophy and management style is often very different, this is the fundamental reason that leads to cultural differences. Western companies emphasized action; focus on the hard work of the management, undoubtedly Asians intuitive rational way of thinking in the management. This fully reflects the cultural differences of each other, each other’s differences, but also shows some kind of fusion. Although today’s world has become more conspicuous efforts of globalization and information technology, different countries, nations, businesses first compete with each other, learn from faster and faster, increasing to strong ability, but because of cultural differences between human social each other there is always a natural state, which makes any social expectations of management can achieve high performance in terms of the process of economic globalization, the impact of cultural differences on management behavior and mode, interrelated is a growing need attention and study.
Oriental culture, including Chinese cultural system, cultural system of India, the Arab Islamic system, oriental culture covers all the traditional role of the Orientals knowledge, values and behavior of cultural factors. Western culture, including Western spiritual traditions, the value of ethics, literary and artistic achievement, the theory of ideology, customs and rituals, language system. Therefore, objectively speaking, the addition to the system of differences and the level of productivity differences, resulting in differences of different management models fundamental reason lies in the different cultural system is different cultural types. In Western countries there are very different culturally bound to impact and penetration entrenched thinking and behavior. Western countries, its cultural background from the European Renaissance, and by the Christian far-reaching effects, focusing on speculative reason that only speculative reason things is the most real, the most perfect, the abstract way of thinking as a basic means to understand things. Focus on the rights and freedoms of the individual, freed from bondage, and stressed personal liberation, emphasizing the rational spirit, the pursuit of knowledge and truth, the courage to practice with adventure. In the interpersonal aspect, straightforward and clear, transparent directly. Far-reaching impact of China’s cultural background influenced by Confucianism, pay attention to comprehend the truth from a special and specific intuitive sensory, intuitive, introspective personal experience to gain awareness.
Importance of personal responsibility, dedication and service groups, advocate the harmonious coexistence between people, stressed that “rule of virtue” and “benevolence governance”, emphasizing the combination of rationality and irrationality. Consider the issue in the attitude from the comprehensive and long-term perspective, consider the feeling of others, and focus on the bonds of friendship between the people. The overall East-West cultural differences due to different countries, nations gradually formed in a different living environment with all the style mode of production and way of life, raising a variety of cultural system type. The same country, the law of motion of the nation because of changes in the environment of life and culture in different historical periods, showing a different cultural system. The former is the national character of the cultural system (or regional), the latter is the era of the cultural system (or stage). Cultural differences, refers to human beings in different countries and social cultural differences. Due to the different levels of economic development, social systems, geographical environment, the conditions of the various cultural system constant evolutions in the historical development of the process of development, thus create a variety of cultural types and modes, resulting in a special system of different cultures.
All ethnic groups in the creation of long-term history of the development process with the national characteristics reflect the history and social life of the nation’s culture. When the national community in the history of mankind has been formed and distinguish it from other tribes and Community type, culture is always performance for vary even vastly different national culture. Culture and cultural creations are rooted ethnic and national community, no national society; the fertile soil of life, culture would not by rooting. The culture of the ethnic and national community to be formed, as it provides the basis of the most widely used material and spiritual, as well as other aspects of implementation of national distinction, and its overall internal structure and complete and external look. In the internal structure of the national culture, there is a good background for the kind of stage, class, grade, various interest groups, as well as language, religion, and may lead to the existence and development, and cultural differences, but as long as a nation or ethnic community persists, it will always have some kind of a common national culture. Performance differences in the political, economic, cultural, language and way of life, customs, among all the nations in the historical development of the long-term process of gradually formed with the development of ethnic and national community change, but will not disappear in the short term, national, ethnic and cultural differences are bound to exist. Different ethnic and cultural upbringing different ethnic behavior, attitude to life. Different ethnic groups and members have a specific value orientation; follow certain customs and cultural norms.
The following example is illustrative of the national and cultural differences: When Sony company developed to multinational operations, Sony acquired several large companies in the United States, when he performed a very successful corporate culture and strategy in Japan, management mode and method of use and moved to the United States, the executable for a period of time, the problem will soon be prominent. Sony Corporation of Japan executives do not understand: Why Japanese workers preferential treatment and benefits for U.S. employees, employee turnover and job-hopping events occur still ongoing? Is the company’s management problems yet? Sony companies have done a lot for this investigation and study, the results showed that, this is not own the company’s corporate culture or strategic problems, nor is their own business management and provide treatment, welfare problems, but the habits of Americans, that is, the result of cultural differences and cultural conflict. The United States used to employees in an enterprise or a post work on two or three years and then change jobs or in enterprise, and this behavior does not have any ingredients insults or negative-to-business, and no employees deny or shame the ingredients, But it is a normal social phenomenon, is a habit, just like Chinese people are used to eat with chopsticks, no why to use chopsticks, no nothing to discuss.
Values are people to their own surrounding things, persons, and events, significance and the existing evaluation and view, it is people judge the rights and wrongs of the standard; it is the core of enterprise culture part. Values have very strong leading, it directly control enterprise leading thought and consciousness, and has a strong subjectivity, which determines the enterprise staff of the ideological trend, behavior and philosophy, and values of the shake will directly lead to the management of the enterprise and management contradictory produce. Every country, nationality, group has a different value system, and each person as a result of different education background, growing environment also can form independent values. Different cultures have their own values, values embodied in the culture of the various elements, each national culture are constitute a unique cultural model, because values through it. In a sense, enterprise cultural dilemma is essentially the conflicts of values. Enterprises in the multinational business, enterprise cultural dilemma first concentrated expression in staff individual different values, the difference values fuses in together, will happen friction produce collision, leading to enterprise staff the original values orientation which rooted in their hearts impact, its main body consciousness will be affected by negative and changed, even collapse, and each individual are by instinct, safeguard their long period of the formation of values system, despise negative values of others, not to the formation of a unified code of conduct, so the values of the differences and conflicts are the enterprise culture core embodiment of the dilemma.
Enterprise spirit is to show enterprise worker in long-term production and operation management process, the value system of control and the raise, gradually formed and optimize out group consciousness, is the whole value system kernel. It is the enterprise tenet, enterprise ideal, the enterprise management idea, the enterprise values, enterprise faith, the enterprise ethics and the highly generalization, is the enterprise staff have together, common grasp the idea, is the enterprise the most advanced consciousness and a positive reflection of the style. Reflect enterprise goal, their own pursuit and enterprising consciousness. It’s including creation, innovation, competition, enterprising and pursuit, and outstanding consciousness genes. The spirit of enterprise has a certain cohesive force and radial force, guidance and enlightenment function, enterprise spirit once formed group mental set, can through the clear consciousness dominate behavior, also can produce behavior through the subconscious. Enterprise idea change results can improve staff active responsibility and maintenance enterprise management norms, the determination for the realization of the goal of enterprise and contribute their strength. Multinational management, the original spirit of enterprise will meet the impact of other values, when this spirit is met extrusion and correction, it’s will affect employee beliefs and ideas, in employee psychological inconsistency, each other resonance inner attitude, will condition, the thought state and ideal pursue to generate fuzzy state, if these dominant thoughts and ideas shake, inevitable meeting produces enterprise cultural dilemma problem for enterprises, and the long-term development of the multinational business will produce adverse effect.
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