During the last decade or more, the corporate world has witnessed a significant rise in the number of cross border mergers and acquisitions. The aim of these often complex integrations is to provide large organisations with a greater competitive edge as they strive to enter new markets, develop new products or create economies of scale. Research suggests that intercultural dissonance is one of the major indicators of failure in cross-border M&A and regardless of the objective of the merger or acquisition, companies should always be aware of the intercultural risks and opportunities that come hand in hand with the integration process and prepare their workforce from the board down to cope with these challenges.
© istockphoto.com/Kasia
Integrating a culturally diverse workforce can be a tremendous challenge for companies as culture affects all aspects of working styles and procedures. Basic elements of workplace behaviour can diverge hugely from one culture to another: the need for supervision and direction, affinity with collaborative working, attitudes to planning and deadlines, expectations and perceptions of reward schemes…all these factors can potentially trigger cultural clashes – which in turn can lead to staff attrition, reduced productivity and loss of brand recognition. And although the importance of culture is now widely accepted among HR directors and executives, it is quite puzzling to see that it is rarely addressed as fully or as early as it needs to be during the integration process. This lack of intercultural due diligence and planning can lead to severe misunderstandings and create critical incidents which can eventually jeopardise the early stages of the cross border integration.
A significant challenge of cross border mergers and acquisitions is how to create and embed a new or ‘third culture’, which is shared and demonstrated by all employees. It is extremely difficult not to let the existing culture of one of the integrating organisations dominate over the other but the most successful M&As are those where a new ‘third’ culture has evolved from the integration. The very creation of this organisational culture is a challenge in itself. Decision makers need to consider carefully how they want the culture to evolve and be proactive in developing and promoting the culture and values of the new organisation. Communication and consultation are crucial and cultural change needs to involve all levels of employees within the organisation. Vision and values should be created quickly and demonstrated from the top down and promoted by champions from all levels of the organisation .
In addition to internal communication, workshops and training programmes can help to embed the new culture and develop the intercultural knowledge and awareness of the work force. If employees have a greater awareness of their national and previous organisational culture as well as the cultural values of the new organisation this should help them to rise to the challenges of working within a new international entity.
The benefits of cross-border M&As should outweigh the challenges but all too often they do not lead to increased productivity and improved financial results – and it is a lack of intercultural awareness and planning that all too often plays a part in the poor performance of these integrated organisations.
© Communicaid Group Ltd. 2013
© admin for Communicaid Blog | Cross Cultural Training and International Communication Skills, 2013. |
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Post tags: cross cultural training for mergers and acquisitions, cross-cultural awareness, cross-cultural M&A, intercultural training, Managing mergers and acquisitions, merger and acquisition, working accross cultures
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