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Managing Cross Culture - Essay Example

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Student number: Differences in Cultural Values Introduction Businesses operating in global scale are less affected by the production and/or market failures occurring in specific geographical locations. The primary objectives of cross-border expansion by the companies are to increase the net-sales by market expansion, explore niche markets in foreign countries, achieve economies of scale and acquire resources in other countries…
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Managing Cross Culture
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Managing Cross Culture

Download file to see previous pages... Dysfunctional employee outcomes such as sceptical behaviour, job insecurity, psychological anxiety and distress which in turn results in worse health outcomes can be caused by un-planned cross-border merger and acquisition activities (Chung et al. 2014). There are three theoretical approaches for studying the employee problems associated with merger and acquisition namely, psychological, social and cultural (Marmenout, 2010). Objectives of this study are to examine the problems which can arise to a company in the UK during acquiring or merging with a Chinese company and to provide a comprehensive guideline to overcome those problems. Current study adopts literature methodology to adopt focusing on the cultural perspective which states that combining two distinct organizations with different cultures often leads to a cultural clash or collision that undermines individual employyes’ performances (Barry & Slocum, 2003; Marmenout, 2010). Cross-border merger and acquisition initiatives are considered even more challenging to the work force compared to the within country business expansion because the employees are confronted with various cultural difference at the organization level as well as nation level (Chung et al. 2014). There are language-barriers, different religions, contradicting believes, values and perceptions in the society which may obstacle from achieving the goals of cross-border merger. Current research findings reveal that productivity of the human resource component in a firm can be severely affected by the un-planned cross-border expansion (Makri, 2012) because in the new company there is an interface where the cultural values of individuals coming from the two different organizations and countries are interacted. If this interface was not carefully designed cultural clash or collision can occur disrupting the functions of the organization. As the nature of the difficulties faced during the business expansion across the borders highly depends up on specific cultures, most of the researchers have restricted to specific case studies. The current study also focuses on problems which were identified in research studies based on the cross-border merger and acquisition activities initiated by the companies in the Western part of the world and China. Chapter organization of the study can be described as follows. Part one provides an insight as to what are problems of cross-border merger and acquisition activities with a special emphasis on the differential cultural values. Part two presents recommendations to face the above challenges. Finally the summary of the research findings are presented under conclusions. Part 01 Literature Review Power Status of the Organizations involved in Cross-Culture Business Expansion Cross-border (or cross-culture) expansion of businesses often involves organizations which are characterised by status differences. Organizations which have differential power status are involved in cross-border expansion because merger and acquisition are the methods by which the cross-border expansion is achieved by the companies. Fischer et al. 2007, states that market expansion of the organizations comprises of an organization which is more economically successful or of greater size and the rest of the ...Download file to see next pagesRead More
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