Solution
Soumi answered on
Aug 04 2020
Running Head: LEADERSHIP DILEMMAS IN MERGERS AND ACQUISITIONS 1
LEADERSHIP DILEMMAS IN MERGERS AND ACQUISITIONS 3
LEADERSHIP DILEMMAS IN MERGERS AND ACQUISITIONS
Table of Contents
Introduction 3
Essential Aspects of Mergers and Acquisitions in the Context of Cultural Differences 3
The Importance of Comprehending Cultural Differences while Merging 3
The Importance of Cultural Reconciliation in Mergers and Acquisitions 4
Cultural Conflicts among Stakeholders during Negotiation 5
Cultural Conflicts among Stakeholders during Conflict Resolution 6
Cases of Cultural Conflict during Mergers and Acquisitions 6
Flipkart and Wal-Mart M&A 6
Daimler Benz and Chrysler M&A, 1998 7
Softbank Group and Sprint M&A 7
Disney and Pixar M&A, 2006 8
Amazon and Whole Foods M&A, 2017 8
Conclusion 9
References 10
Introduction
Combining two different business organizations to form a single firm that uses the assets of both to perform better, save organizations from bankruptcy, and even increases market share is vividly evident in the cu
ent global market. On one hand, the mergers and acquisition (M&A), increase the chances of survival in the business industry, on the other hand, due to various origin creates problem for leaders, who direct their workforces.
The cu
ent paper critically investigates the influence of cultural dilemma on the effectiveness of the leaders, at the time of mergers and acquisitions. The paper uses the film Gung Ho (1986) as a means of understanding the issues arising out of mergers and acquisitions between different culture organizations.
Essential Aspects of Mergers and Acquisitions in the Context of Cultural Differences
The Importance of Comprehending Cultural Differences while Merging
Culture is important for successful M&A. As mentioned by Wankhade, Heath and Radcliffe (2018), cultural differences increases the number of hurdles in the path of fruitful mergers and acquisitions, while the ability to
idge the cultural differences increases the productivity of the same. The formation of a culture owes its roots to the sociological, economic and political backgrounds. Therefore, cultures of different places appear to the different at the time of comparison with one another.
As seen in the movie Gung Ho (1986), the culture of the Japanese people differs from that of the Americans. As the movie progresses, it is seen that the Hadleyville, an auto manufacturing company in USA has been forced to close down due to business failure and seeks to merge and getting acquired by Japanese Auto manufactures, Assan Motors Corporation.
Despite the optimistic and strategically co
ect initiative, Hunt, the foreman of the closed USA auto manufacturers, fail miserably at the time of proposal presentation as he lacks the knowledge of Japanese culture. As stated by Palinkas et al. (2018), lack of cultural knowledge could to lead to merger failures. The problem remains unsolved till the very climax of the film, making the lack of cultural understanding the pivotal point.
The Importance of Cultural Reconciliation in Mergers and Acquisitions
In the film, Gung Ho (1986), Hunt speaks in a manner that the Japanese Board of Directors failed to accept and solely based only on profit potential, they acquire the Hadleyville Auto manufactures. After the M&A, the situation worsened as both sides fail to understand the cultural framework of the other.
As the acquiring company, as opined by Brueller, Carmeli and Markman (2018), needs to direct the acquired company under a new managerial model, it needs to form an alliance with the culture of the acquired with their own. The film ends on a happy note as both sides understand the culture of other and
idge their differences, and realizing the importance of cultural difference comprehension.
The cultural reconciliation
ings in the positive change, where the American workers finally learn to value the Japanese way of working and yield results that point towards betterment. As affirmed by Singh (2018), reconciling two different cultures improves M&A success rate, as both sides cooperate with one another, resulting into a little scope for conflict.
Cultural Conflicts...