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You will be required to submit a business report of a case situation as the final assignment. You MUST use a business report style with appropriate headings, analysis and style/language. Typically a...

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You will be required to submit a business report of a case situation as the final assignment. You MUST use a
business report style with appropriate headings, analysis and style/language.
Typically a business report consists of:
1. An executive summary.
2. A general overview of the major issues for the company.
3. An analysis of the issues using relevant ideas and theories to inform your analysis.
4. An identification of the problems (no more than 5, no less than 3). An identification of solutions to
those problems.
5. The solutions and recommendations should be prioritized according to importance. Recommendations
should be realistic and take into account the potential cost of implementing solutions. They should also
be implementable.
6. A summary of your recommendations.
7. Even if the case situation is a global human resource issue, the report much always first, consider the
business issue. It is important always to note that you are business people first and HR people second.
Answered Same Day May 15, 2020

Solution

Ram Mohan answered on May 25 2020
133 Votes
CMS Template.docx
2
Assessment3: Case Study
Name
Class
May 28, 2018
Contents
1Executive Summary
1Introduction
3Analysis of the Issues using Theories
5Identification of Problems
7Solutions to the Problems
11Summary of the Recommendations
11Conclusion
11Bibliography
Executive Summary
Cross border mergers and acquisitions need careful integration of the respective divisions and functions by amalgamating the different cultures, employee behaviors, organizational structures, and strategies into a workable and cohesive whole. This calls for deft handling of the diverse cultural and business mores of the erstwhile entities so that there is minimal disruption to the newly merged entity.
The case in question relates to the merger of IBM and Lenovo which are culturally dissimilar owing to them being quintessentially Western and Asian entities. People, Culture, Strategy, Organization, and Approach are the determinants of success for mergers of this type. As can be seen from the case, Lenovo and IBM were able to tackle most of the challenges arising out of these differences in these factors.
Having said that, the sudden replacement of the CEO with a Lenovo board member suggests that there were underlying problems that were invisible to the naked eye. Indeed, given the secrecy su
ounding this move, it is worth investigating the reasons. In addition, as the case details, there are several minor and major problems due to culture and people and hence, this business report focuses on outlining such problems, using theoretical approaches as the basis for analysis, suggesting some possible solutions, and recommending a course of action that the new CEO can implement.
The analysis in this case is informed by a blend of theory applied to practice and the discussion proceeds in multiple perspective based examination of the problems and solutions. Above all, this business report offers lessons for such mergers through the Glocal approach that combines global thinking with local execution.
Introduction
The globalization of the world economy since the 1990s has seen an unprecedented rise in the number of International M&A’s or Mergers and Acquisitions between Western multinationals and Asian firms. One such example is the merger between the American Technology giant, IBM’s Personal Computer division, and the Chinese PC (Personal Computer) maker, Lenovo. Indeed, this deal is more of an acquisition by Lenovo instead of a merger between the two firms since at the time of the deal, Lenovo’s sales surpassed those of IBM’s PC sales by nearly three times.
Having said that, the approach taken to the deal was to treat it as a “ma
iage of equals” and as the case illustrates, this was driven from the top as well as em
aced down the hierarchy with all employees being motivated to work together in the best interests of the merged entity. However, as the case illustrates, there were many problems both apparent to the naked eye as well as under the radar issues as exemplified by the replacement of Stephen Ward by Yang. Indeed, one of the aims of this report is to uncover the reasons for the problems that cropped up after the merger.
Indeed, the case highlights the problems that crop up when two organizations with vastly different cultural mores and from geographically diverse countries attempt at merging and the ensuing problems related to the “clash of two rivers” exemplifying the insurmountable ba
iers caused by place, culture, people, and differing approaches. Further, given the myriad differences in the organizational structures and behaviors as well as cultures between them, there were very real problems arising from a culture and personality clash as well.
General Overview of the Major Issues
When Western and Eastern firms come together as part of M&A’s, there are bound to be cultural issues arising from the differences in those cultures as well as differing approaches on how to run the merged entity. In addition, the structural problems resulting from organizational behavioral and change management are common as well. Among the important reasons for the problems at Lenovo, after the merger, were people and cultural issues that arose due to the very real aspect of a culture and a personality clash (Connor, Min and Iyengar 2013).
On the other hand, it can also be argued that the merger was a success since Lenovo neither saw an exodus of the customers (it’s as well as IBM’s) nor ran into issues related to attrition and mass layoffs. Indeed, the statistics show that it managed to retain 98% of its customers as well as lay off only a few thousand of its employees and that too due to the shifting of the headquarters from New York to Raleigh. Moreover, there were very few disruptions as far as order fulfillment and customer satisfaction levels were concerned and hence, this is another reason why the merged entity continued to perform well (Stahl and & Köster 2013).
The success of the post merger and acquisition phase is determined by five critical factors which are People, Culture, Organization, Strategy, and Approach. These five factors operating individually and taken together have to be analyzed for any potential issues or problems. This report mainly focuses on the people, culture, and approach dimensions though there is a discussion on strategy and organization (Burke 2008). In addition, this report relies extensively on the Theories of Cultural Dimensions to underpin the analysis as well as references Globalization, Strategic Management, and Organizational Behavior and Change Management theories to illustrate the reasons for the problems, suggests some solutions, and offers some recommendations that can be implemented (D. and Morgan 1991).

The mutually cooperative approach that the two entities after the merger followed is exemplified by the decision to split the leadership roles evenly between the Lenovo and IBM executives (Stahl and & Köster 2013). As part of this decision, IBM’ Steve Ward was designated as the CEO or the Chief Executive Officer of the merged company while former CEO Yang Yuanqing was made the chairman (Stahl and & Köster 2013). This decision was widely hailed as a wise one by several commentators with one of them saying that, “as they enter foreign markets, Chinese execs realize they lack essential skills. ‘China needs
and names, reach, logos, marketing, distribution — and the management that attends to all of those.’ (Employee. 2010)
Having said that, the ensuing change of guard at the top meant that the initial bonhomie and the euphoria about the merger between Lenovo’s and IBM’s management and employees quickly dissipated and it is the contention in this report that cultural and personality issues played a prominent role in the subsequent churn in the managerial level. As discussed elsewhere, there was a fundamental cultural disconnect between the Americans and the Chinese which was initially papered over. Indeed, starting with time zone differences, and including language ba
iers, as well as interpersonal communication issues, there were many problems which were not apparent at first sight, but, soon manifested themselves in ways that led to friction between the employees of the erstwhile firms now working together (Ghemawat and Vantrappen 2015).
Analysis of the Issues using Theories
The major theories that inform the analysis of the problems being faced by Lenovo include Hofstede’s Theory of Cultural Dimensions, Trompenaars theory of cultural differences, the Globalization versus localization theory, and the concept of Glocalization as popularized by the famous authors and New York Times columnist, Thomas Friedman, to explain how global firms have to adjust and adapt to local conditions. The underlying thread or the commonality in these theories as applied to the present case is the factor of diverging approaches, strategies, people issues, and organizational behavior all bound together by the cultural dissimilarities as far as IBM and Lenovo were concerned (Friedman 2005).
The reasons for the clash can be explained by reference to Hofstede’s Theory of Cultural Dimensions. As discussed in the section related to theoretical basis for this report, Geert Hofstede’s model is especially useful to explain and analyze the cultural and the personality clashes between Lenovo’ s and IBM’s employees and managers. For instance, the dimension of Power Distance for Asian and Chinese in particular is high when compared to Western and especially American employees (Hofstede 2000).
What this means is that the Chinese are more hierarchical and deferential to authority than the Americans who are instinctively democratic in their approach to interpersonal relations. As can be seen from the case, it is clear that there were very real problems due to miscommunications, wrong interpretations, and...
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