Cross-border mergers and acquisitions (M&A) have been part of the global business landscape for more than 30 years. While this trend remains common, as evidenced by the US$1.66 trillion estimated global direct foreign investment in 2012 (UNCTAD January 27, 2013), studies have shown that over 50% of M&A do not lead to expected outcomes (Bjorkman, Stahl, and Vaara 2007; Buono and Bowditch 1989; Cartwright 1998; Forstmann 1998; Gerds Strottman, and Pakshalika 2011; Goulet and Schweiger 2006; HayGroup 2008; Payne 2005). Some of the reasons cited for this poor performance include low employee commitment and employee turnover (Larsson and Finkelstein, 1999; Veiga et al, 2000), employee resistance to change (Bjorkman, Tienari, and Vaara 2000; Buono and Bowditch 1989), underdeveloped business strategy for integration (Cartwright and Schoenberg 2006; Finkelstein 1999; Gerds Strottman, and Pakshalika 2011; Larsson and Finkelstein 1999; Nahavandi and Malekzadeh 1988), readiness of employees for knowledge transfer (Bjorkman, Stahl, and Vaara 2007; Sarala and Vaara 2010; Tseng 2012), and overestimating the level of synergies that can be achieved (Cartwright and Schoenberg 2006; Christofferson, McNish, and Sias 2004; Larsson and Finkelstein 1999). While researchers and practitioners, alike, have focused much of their attention on the strategic and financial goals of M&A (Cartwright and Cooper 1996; Cartwright and Schoenberg 2006; Olie 1994; Stahl and Voigt 2003), they have underestimated the impact of organizational culture on the success of cross-border ventures (Forstmann 1998; Huang and Kleiner 2004; Stahl and Voigt 2003, 2008; Veiga et al. 2000). Many of the reasons cited for poor performance in M&A may be attributed to the organizational culture of each of the entities coming together.
|Keywords:||Organizational Culture, Cross-border M&A, Acculturation|
Assistant Professor, School of Education, Virginia Commonwealth University, Richmond, VA, USA