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
Objectives and Key Themes
This analysis aims to explore the cultural factors that influenced the merger and post-merger integration of Arcelor and Mittal Steel. It seeks to understand how cultural aspects contributed to the formation of ArcelorMittal's corporate culture. The analysis uses Hofstede's cultural dimensions as a framework.
- The impact of cultural differences on the success of the ArcelorMittal merger.
- An examination of Hofstede's cultural dimensions and their applicability to the case study.
- Analysis of the post-merger integration process and its relationship to cultural factors.
- Evaluation of the synergy effects achieved following the merger.
- Comparison of the merger's success with other large-scale corporate mergers.
Chapter Summaries
1. Background Information - ArcelorMittal: This chapter introduces ArcelorMittal, the world's leading steelmaking and mining company, formed through the 2006 merger of Arcelor and Mittal Steel. It highlights the company's global reach, employing over 200,000 people across numerous countries. The chapter emphasizes ArcelorMittal's core values of sustainability, quality, and leadership, and details its major product lines and key customer industries, particularly the automotive sector where it holds significant market share. The chapter also notes the cyclical nature of the steel industry, heavily influenced by macroeconomic conditions and the fluctuating demand from sectors like automotive, construction, and machinery, pointing out the challenges faced due to market volatility and overcapacity, especially following the 2008 financial crisis.
2. The Focus of Analysis: The Merger of Arcelor and Mittal Steel: This chapter defines the scope of the analysis, focusing specifically on the cultural aspects that influenced the merger and subsequent integration of Arcelor and Mittal Steel. The primary objective is to analyze the cultural factors that shaped the new corporate culture of ArcelorMittal. The chapter emphasizes the merger's strategic goal of market consolidation to achieve an oligopolistic market position. It cites the CFO's belief in the similarity of the two companies' cultures despite their differing geographical origins. The chapter concludes by highlighting the surprisingly smooth and swift integration and the significant revenue and net income increases in the first year following the merger, raising questions about the role of cultural factors in facilitating this success.
3. An Appropriate Framework for this Analysis?: This chapter reviews various organizational culture frameworks, focusing on their suitability for analyzing the ArcelorMittal merger. While acknowledging other significant theories such as Schein's organizational culture theory, Deal and Kennedy's strength of culture, Peters and Waterman's characteristics of excellent companies, Trompenaar's 7 cultural dimensions, and the GLOBE project, the chapter argues for the use of Hofstede's cultural dimensions. The justification rests on Hofstede's pioneering work in the field and the extensive academic discussion surrounding it, making it a suitable foundation for analyzing cultural influences in a global merger. The chapter also acknowledges the ongoing controversies and criticisms associated with Hofstede's model.
ArcelorMittal Merger: A Cultural Analysis - Frequently Asked Questions
What is the main focus of this analysis?
This analysis explores the cultural factors influencing the merger and post-merger integration of Arcelor and Mittal Steel, examining how cultural aspects contributed to ArcelorMittal's corporate culture. It uses Hofstede's cultural dimensions as a framework.
What are the key objectives of this analysis?
The analysis aims to understand the impact of cultural differences on the merger's success, evaluate the applicability of Hofstede's framework, analyze the post-merger integration process in relation to cultural factors, assess the achieved synergy effects, and compare the merger's success with other large-scale mergers.
What is the scope of the background information provided on ArcelorMittal?
The background information introduces ArcelorMittal, its global reach, employee count, core values (sustainability, quality, leadership), major product lines, key customer industries (especially automotive), and the cyclical nature of the steel industry and its challenges (market volatility, overcapacity).
How does the analysis approach the Arcelor and Mittal Steel merger itself?
The analysis specifically focuses on the cultural aspects that influenced the merger and its subsequent integration. It highlights the strategic goal of market consolidation and the surprisingly smooth integration, despite the companies' different geographical origins. The rapid revenue and net income increases after the merger are noted, prompting investigation into the role of cultural factors.
What framework is used for the cultural analysis, and why?
The analysis utilizes Hofstede's cultural dimensions. While acknowledging other frameworks (Schein's, Deal and Kennedy's, Peters and Waterman's, Trompenaar's, GLOBE project), the choice is justified by Hofstede's pioneering work, extensive academic discussion, and suitability for analyzing cultural influences in global mergers. The limitations and criticisms of Hofstede's model are also acknowledged.
What aspects of Hofstede's cultural dimensions are analyzed in relation to the ArcelorMittal merger?
The analysis uses Hofstede's dimensions of Individualism vs. Collectivism, Power Distance, Uncertainty Avoidance, Masculinity vs. Femininity, Long-Term vs. Short-Term Orientation, and Indulgence vs. Restraint to map the cultural landscape of the merger and its impact on integration and success.
What is included in the chapter summaries?
Chapter summaries provide concise overviews of the background of ArcelorMittal, the focus of the merger analysis, the justification for selecting Hofstede's framework, and the cultural analysis of the merger using Hofstede's dimensions, including an assessment of the post-merger integration and its success.
What is the overall structure of the provided document?
The document includes a table of contents, a statement of objectives and key themes, chapter summaries, and a list of keywords (implied, not explicitly listed in the provided HTML).
- 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
