In terms of globalization, enterprises have to be aware of their own identity, values and
thoughts and develop a grasp for interaction with foreign cultures. So it’s not only some kind
of business behavior necessary, it is also important to know something about the values,
morals and attitudes for a better interaction. Even more important is a survey, if you plan a
merger or an acquisition with a foreign company. Researches proof, that 50-70 % of all
mergers don’t succeed. This essay deals with the difficulty of consolidating two different
corporate cultures to one common culture. In order to visualize this issue, DaimlerChrysler is
taken as an example. Culture is an “everyday thing”, it is present in every situation. It is a guideline for living
together in large groups, giving rules to act and behave. In most instances these facts are not
written down but unexpressed rules. There are many definitions in literature. The most
widespread definition is likely
“Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes,
meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts of the
universe, and material objects and possessions acquired by a group of people in the course of
generations through individual and group striving”.
Already the Egyptians and Romans created their own distinct hierarchies, laws, knowledge
bases and values and tried to preserve it over several hundred years. Culture is needed to organize and administrate a group of people or whole population. Nowadays this lead to
sophisticated cultures in every country of the world. These cultures are non-static grown
individual reflections of society that are always adapting to their environment.
Table of Contents
1. Global cultural interaction
2. What is culture?
3. Corporate culture
3.1. History of Daimler-Benz and Chrysler
3.2. Characterization of Daimler-Benz and Chrysler
3.3. Changing corporate culture
4. Merger & Acquisition
5. Process of Merger & Acquisition
6. Post Merger Integration
6.1. Sources of trouble
7. Summary & Conclusions
Objectives and Core Themes
This paper examines the challenges of consolidating disparate corporate cultures into a unified identity following major mergers or acquisitions, specifically utilizing the Daimler-Benz and Chrysler merger as a primary case study to illustrate the complexities involved in international management.
- The role of national and corporate culture in organizational success.
- Theoretical frameworks for understanding and managing cultural change.
- Analysis of the strategic and cultural failures in the DaimlerChrysler integration.
- Key success factors and psychological requirements for effective post-merger integration.
- The importance of communication and emotional connection in securing employee acceptance.
Excerpt from the Book
3.3. Changing Corporate Culture
Due to external or internal influences the corporate culture has to adapt, to guarantee future success. Edgar H. Schein indicates that it is not simple to establish new values, thoughts and principles. The established culture needs to be unlearned and the new one has to be learned. This change provokes fear of uncertainty that’s why resistance against it will appear. Thus it cannot be reasonable to demand new visions, it wouldn’t lead to success. The problem has to be solved psychologically. A fear for survival or a sense of guiltiness must be created through a threat, crisis or dissatisfaction. That causes that the employee is willing to change for competitiveness.
The negative consequence is that the fear of failure in the learning process blocks the whole change. Thus the fear for survival has to be increased or the fear of failure has to be reduced.
The process could be designed in three steps:
1) Motivation for change
a. Falsification of old culture
b. Emergence of fear for survival
c. Creation of psychological security to avoid fear of failure
2) Learning new concepts and giving a new sense to old concepts
a. Imitation of role play and identification with it
b. Finding solutions throughout scanning and learning with trial and error
3) Internalization of new concepts and accepting them as meaningful
a. Integration of new concepts, significances and identity
b. Integration of new concepts concerning current connections
Summary of Chapters
1. Global cultural interaction: Introduces the impact of globalization on business and identifies the high failure rate of cross-border mergers due to cultural incompatibilities.
2. What is culture?: Defines culture as a collective guideline for behavior and explores its various dimensions using Geert Hofstede’s classification.
3. Corporate culture: Explains how organizations develop unique internal cultures and details the historical and cultural backgrounds of Daimler-Benz and Chrysler.
4. Merger & Acquisition: Discusses the strategic triggers for mergers and the specific market-driven goals behind the DaimlerChrysler deal.
5. Process of Merger & Acquisition: Outlines the theoretical and practical stages of the M&A process, highlighting the critical role of thorough due diligence.
6. Post Merger Integration: Analyzes the implementation challenges of the DaimlerChrysler merger, focusing on the bureaucratic difficulties and the failure to create a unified identity.
7. Summary & Conclusions: Synthesizes key lessons for successful integration, emphasizing that cultural synergy requires long-term planning and deliberate employee engagement.
Keywords
Corporate Culture, Merger and Acquisition, DaimlerChrysler, Post Merger Integration, Globalization, Organizational Structure, Change Management, Cultural Interaction, Due Diligence, Synergies, Strategic Management, Employee Acceptance, Hofstede, Schein, Cross-border Merger.
Frequently Asked Questions
What is the primary focus of this paper?
The paper focuses on the critical role of corporate culture during large-scale mergers and acquisitions, examining why many mergers fail to achieve their intended goals due to cultural clashes.
What are the central themes discussed?
The central themes include the definitions of national and corporate culture, the strategic motivations for M&A, the psychological processes required for cultural change, and the practical challenges of post-merger integration.
What is the core research question?
The research question asks how one can develop a mutual or common corporate culture following a large merger or acquisition, given the inherent difficulties of integrating different organizational mentalities.
Which methodology does the author use?
The author employs a qualitative case study methodology, examining the Daimler-Benz and Chrysler merger through the theoretical lenses of Edgar H. Schein and Geert Hofstede.
What is covered in the main body of the work?
The main body covers the theoretical foundations of culture, the history of the involved companies, the strategic decision-making process of the M&A, and a critical analysis of the post-merger integration phase.
Which keywords best characterize this work?
Key terms include Corporate Culture, Post Merger Integration, Change Management, DaimlerChrysler, and Organizational Identity.
Why did the DaimlerChrysler integration face so many difficulties?
The integration struggled due to unmanaged cultural differences, a top-down bureaucratic approach, lack of transparency toward employees, and an inability to foster a shared sense of unity.
What does the author conclude about the "merger of equals"?
The author suggests that the "merger of equals" was conceptually flawed, as it lacked proper planning for cultural alignment and resulted in the dominance of one corporate culture over the other.
Does the author provide a universal guideline for successful mergers?
No, the author concludes that a standardized guideline is impossible due to the unique nature of every company and that success depends on gathering expert knowledge and individual adaptation.
- Citar trabajo
- Marcel Franck (Autor), 2007, Managing Corporate Culture after a M&A (example DaimlerChrysler), Múnich, GRIN Verlag, https://www.grin.com/document/117880
