Intercultural aspects of Mergers & Acquisitions in consideration of the Chinese market

Bachelor Thesis , 2008 , 75 Pages , Grade: 1,8

Business economics - Miscellaneous

For many years the number and value of cross-border mergers and acquisitions (M&A) has increased. Although cross-border M&A seem to be a very attractive mode of entering foreign markets by having the aim to increase market power, improve efficiency through synergy, size, risk diversification or financial motivations, most M&A waste shareholders' value.

This Bachelor Thesis illustrates the risk potential of M&A by analysing problems due to cultural differences in China.

Inhaltsverzeichnis (Table of Contents)

• 1 Introduction
  • 1.1 Problem Definition
  • 1.2 Aim of this work
  • 1.3 Outline research methods
• 2 Chosen aspects of Mergers & Acquisitions
  • 2.1 Definition of M&A
  • 2.2 Differentiation of the terms Merger and Acquisition
  • 2.3 Reasons and drawbacks of M&A
  • 2.4 The M&A process
    • 2.4.1 The concept of phases
    • 2.4.2 Analysis and conception phase
    • 2.4.3 Transaction phase
    • 2.4.4 Integration phase
• 3 Intercultural aspects of M&A
  • 3.1 Definition of culture
  • 3.2 National versus corporate culture
  • 3.3 Cultural dimensions
    • 3.3.1 Hofstede's four cultural dimensions
    • 3.3.2 Adding a fifth dimension
    • 3.3.3 Criticism on Hofstede's views
  • 3.4 Layers of culture according to Trompenaars and Hampden-Turner
  • 3.5 The meaningfulness of cultural influences on cross-border M&A
    • 3.5.1 Acceptance of culture as the critical factor of success
    • 3.5.2 Intercultural experience of the M&A management team
  • 3.6 Cultural influences on the analysis and conception phase
    • 3.6.1 Internal analysis
    • 3.6.2 Extracting appropriate M&A targets
  • 3.7 Cultural influences on the transaction phase
    • 3.7.1 Cross-culture negotiations and communications
    • 3.7.2 Cultural due diligence
  • 3.8 Cultural influences on the post-merger integration phase
• 4 Intercultural aspects of M&A in China
  • 4.1 China - latest figures and developments
  • 4.2 M&A in China - Reasons and Drawbacks
  • 4.3 The Chinese culture
    • 4.3.1 Hofstede's dimensions in consideration of the Chinese culture
    • 4.3.2 Long-term orientation in China
    • 4.3.3 The layers of culture in China
  • 4.4 Guanxi and Business
  • 4.5 The M&A process in consideration of the Chinese culture
    • 4.5.1 Analysis and conception phase
    • 4.5.2 Transaction phase
    • 4.5.3 Integration phase
• 5 Summary and Conclusion

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This thesis explores the intercultural aspects of mergers and acquisitions (M&A) within the context of the Chinese market. The primary aim is to analyze how cultural differences impact various phases of the M&A process, from initial analysis and target selection to the final integration stage. The work seeks to provide insights into the complexities of navigating cultural nuances in M&A transactions and to identify strategies for mitigating potential challenges.

• The definition and significance of M&A
• Cultural dimensions and their impact on M&A
• The influence of Chinese culture on M&A practices
• Key challenges and opportunities in navigating intercultural aspects of M&A in China
• Strategies for successful cross-cultural M&A integration

Zusammenfassung der Kapitel (Chapter Summaries)

The introductory chapter provides a brief overview of the research problem and outlines the objectives of this work, along with a description of the research methods used. Chapter 2 explores the definition and various aspects of mergers and acquisitions, including different types of M&A transactions, the reasons and drawbacks of pursuing such activities, and a detailed breakdown of the M&A process across multiple phases. Chapter 3 delves into the complexities of intercultural aspects of M&A, examining the definition and different layers of culture, including various cultural dimensions and their relevance to international business deals. Chapter 4 focuses specifically on the cultural nuances of the Chinese market, analyzing how Chinese culture influences M&A activities, and highlighting key considerations for international companies looking to engage in M&A transactions within China. Chapter 5 concludes the thesis with a summary of the main points explored throughout the work, highlighting key findings and concluding with a broader perspective on the implications of intercultural understanding in cross-border M&A.

Schlüsselwörter (Keywords)

The core keywords encompassing the subject matter of this thesis include mergers and acquisitions (M&A), intercultural aspects of M&A, Chinese culture, cultural dimensions, cross-cultural negotiations, post-merger integration, Guanxi, and the M&A process in the context of the Chinese market.

• College: University of Applied Sciences Essen
• Grade: 1,8
• Author: Bachelor of Arts Sebastian Hermann (Author)
• Publication Year: 2008
• Pages: 75
• Catalog Number: V112285
• ISBN (eBook): 9783640122318
• ISBN (Book): 9783640123674
• Language: English
• Tags: Intercultural, Mergers, Acquisitions, Chinese