This analysis focuses on the cultural aspects which could have influenced the merger and the post-merger-integration of Arcelor and Mittal Steel in either a positive or anegative way. Thus, the purpose of this work is to analyse the cultural factors which possibly played a role at forming the new corporate culture of ArcelorMittal.
In 2006, the world's two biggest steel companies Arcelor and Mittal Steel bundled their forces through a merger and ended in the creation of the world's leading steelmaking and mining company ArcelorMittal. The company truly is a global player, with steelmaking operations in 19 countries over 4 continents and a sales distribution to 160 countries, ArcelorMittal is represented all over the world.
The company attributes its success to its core values of sustainability, quality and leadership. ArcelorMittal supplies high-quality finished and semi-finished steel. The main industries which are supplied by ArcelorMittal are the automotive, appliance, engineering, construction, and machinery industries.
This thesis paper aims to answer the following questions: Considering the once-sharp increase of the company performance, how could the post-merger-integration be executed so smooth and quickly? How come that the two companies could communicate, and bundle their forces apparently trouble-free? Did the different national and corporate cultures complement or hinder the forming of a new organizational culture? With the assistance of the Hofstede cultural dimensions the ArcelorMittal's Merger will be analysed here.
Table of Contents
1. Background Information - ArcelorMittal
2. The Focus of Analysis: The Merger of Arcelor and Mittal Steel
3. An Appropriate Framework for this Analysis?
4. A Brief Introduction into Hofstede’s Cultural Dimensions
4.1 What is Culture?
4.2 National culture
4.3 National culture Differences and the Hofstede’s Cultural Dimensions
4.4 Criticism to Hofstede’s Cultural Dimensions and Limitations of the Framework
5. The Cultural Analysis of ArcelorMittal’s Merger
5.1 Cultural Map “Individualism vs. Collectivism” and “Power Distance”
5.2 Cultural Map “Uncertainty Avoidance” and “Masculinity vs. Femininity”
5.3 Dimensions “Long-Term vs. Short-Term Orientation” and “Indulgence vs. Restraint”
5.4 Successful Merger & Post-Merger Integration
6. Conclusion
I. Appendices
A. Appendix A - Types of Metal Products
B. Appendix B – Levels of Mental Programming & the Onion Metaphor
Objectives and Topics
This work examines the influence of national and corporate cultural factors on the merger and post-merger integration of Arcelor and Mittal Steel. The primary research goal is to identify how disparate cultural backgrounds affected the consolidation process and the formation of a unified organizational culture.
- Analysis of ArcelorMittal's organizational background and market environment.
- Application of Hofstede’s cultural dimensions to assess cross-cultural differences.
- Comparative analysis of the home countries (France, Spain, England, Netherlands) involved in the merger.
- Evaluation of successful post-merger integration strategies in a globalized company.
Excerpt from the Book
4.1 What is Culture?
Firstly, when talking about culture, one needs to define what culture is. Although almost every scientist of organization theory uses a different definition of ‘culture’ (Hill et al., 2012), it is inevitable for this analysis to adopt one. Hofstede (2010: 6) describes culture as ‘the collective programming of the mind that distinguishes the members of one group or category of people from others’. A more comprehensive explanation of ‘mental programming’ and Hofstede’s assumed ‘onion metaphor’ can be found in appendix B. He further elaborates, that these ‘mental programs’ (Hofstede, 2010: 5) are patterns of thinking, feeling and potential acting, which were mainly developed in the early childhood.
Summary of Chapters
1. Background Information - ArcelorMittal: Provides an overview of the company's status as a global steel industry leader and describes the economic conditions and challenges faced during the 2006 merger and the 2008 financial crisis.
2. The Focus of Analysis: The Merger of Arcelor and Mittal Steel: Outlines the purpose of the research, which is to analyze the cultural influences that shaped the new ArcelorMittal corporate culture.
3. An Appropriate Framework for this Analysis?: Justifies the selection of Hofstede’s cultural dimensions as the most suitable academic framework for analyzing this specific cross-cultural corporate merger.
4. A Brief Introduction into Hofstede’s Cultural Dimensions: Explains key concepts like national culture and cultural mental programming, while detailing the six dimensions and acknowledging academic criticisms of the model.
5. The Cultural Analysis of ArcelorMittal’s Merger: Applies Hofstede's model to compare the cultural profiles of the countries involved and discusses how these findings relate to the post-merger integration process.
6. Conclusion: Summarizes how, despite cultural diversity and significant management challenges, the merger succeeded by leveraging the experience of both companies in previous acquisitions.
Keywords
ArcelorMittal, Merger, Post-Merger Integration, Hofstede, Cultural Dimensions, Organizational Culture, National Culture, Power Distance, Uncertainty Avoidance, Individualism, Collectivism, Masculinity, Femininity, Corporate Strategy, Global Management.
Frequently Asked Questions
What is the primary focus of this analysis?
The study investigates the role of national and corporate culture in the merger between Arcelor and Mittal Steel, aiming to identify how these factors influenced the formation of the new organization.
Which theoretical framework is used in this work?
The author uses Geert Hofstede’s cultural dimensions framework, which identifies patterns of thinking and social behavior based on quantitative data from various countries.
What are the core cultural dimensions examined?
The analysis covers Power Distance, Individualism vs. Collectivism, Masculinity vs. Femininity, Uncertainty Avoidance, Long-Term vs. Short-Term Orientation, and Indulgence vs. Restraint.
How is the methodology structured?
The methodology involves a comparative analysis of the home countries (France, Spain, England, and the Netherlands) using cultural maps to highlight commonalities and differences that impacted the integration.
What is the significance of the "Onion Metaphor" mentioned in the appendix?
The "Onion Metaphor" is used to visualize layers of culture, ranging from invisible core values to visible practices, symbols, heroes, and rituals.
Why were specific countries selected for the comparison?
These countries represent the cultural origins of the companies involved in the merger of Arcelor and Mittal Steel, providing the data necessary to analyze potential cultural clashes or synergies.
How did ArcelorMittal manage its cultural diversity post-merger?
The company implemented English as the official corporate language and utilized extensive internal communications to align employees under a new, shared corporate identity.
Did the author find that national cultural differences hindered the merger?
While differences existed, the study suggests that the prior experience of both companies with acquisitions helped them manage cultural diversity effectively and achieve a successful integration.
- Quote paper
- Ender Gülcan (Author), 2017, Cultural Analysis of the Merger of Arcelor and Mittal Steel with the Help of Hofstede's Cultural Dimensions, Munich, GRIN Verlag, https://www.grin.com/document/376521
