Ideas for Managing Diverse Staff after an International Merger - Coursework Example

Table of Contents Page Introduction 2 Why Mergers Fail? 3 Corporate Culture 7 Corporate values and understanding differences 9 Conclusion 13 References 14 Introduction Integrating two companies from China and Africa sounds a good idea depending on the real motive behind it. Mergers have corresponding motives why there is a need to integrate two or more companies because as much as possible such move must be able to contribute more values for the participating companies than moving on their own alone instead. If this line of motive is justified at the end of the merging process, then such merger must be substantially successful, otherwise it is a failure. However, it is reported that there have been shallow analyses of the causes of failure in merger and the measures of success are often weak (Epstein, 2005). With this information, there must be substantial reasons to be used in order for merger to be justified as a failure and the right manner to be considered in its evaluation. This means that the determination of successful or failure merger considers the right evaluation and reasons in order to determine reliability of information involved in the issue. Evaluating the success or failure of mergers is not an easy task. For instance, the newly merged companies might be well good to look from the outside but in reality there is more to it when it comes to knowing the real event happening inside. It might be very important to find out if the newly merged employees from Africa and China have been doing just fine together or the other way around. They may look like enjoying their work but it is important to finally know what is inside of them. This is a very complex scenario and this requires a highly skilled in-charge who will consider all aspects in an organization where there is diversity of people who will be working for the good of the entire operation. This is a great concern in this paper and the proponent wants to give more emphasis on the importance of understanding man power involved because this stands as the company’s ultimate force for the implementation of its corporate agenda. The proponent believes that people are the ultimate ways in which an organization may either prosper or fail. It is in line with this that the entire idea is placed on a proposed merger between a Chinese company and an African company. The proponent is appointed to lead a team consisting of managers from both countries to examine any cultural problems linked to the proposed merger. Thus, the proponent solves this concern by applying the work of Hofstede and Trompenaars in order to evaluate how close would the cultural fit be; and how might find a way to improve cultural understanding between the two groups of managers. However, prior to this, the proponent discusses about some important issues about mergers and the corporate culture in Africa and China. Why Mergers Fail? There is a common assumption that mergers are for the purpose of cutting costs, creating revenues or ensuring growth opportunities. However, one of the concrete reasons why mergers fail is due to issue of control and ownership. It is not easy to carry an organization which is a product of integration between two or more companies because there will be a new level of control and ownership involved. In this case, there are different considerations involved particularly on emphasizing who is the one in-charge or owns the newly integrated companies. In short, there is a significant issue on who will be the one to control the merger. Mergers are not just implemented without a great or significant reason. Two companies need some integration due to the fact that it may result to creating more values than staying apart from each other otherwise. Such of this reason can be manifested by understanding different sensible motives for mergers. The first motive is to ensure more strength and knowledge in a specific industry by having horizontal mergers. Most of this type happens between banks or companies at the same business line. The second motive is about trying to create a close connection between two or more complementary operations. For instance, a company that is in line with raw materials may integrate with a company in charge with production or marketing. In this way, when the two is integrated, there is a substantial control on the raw materials and production and more. This creates a more sensible value for the two companies. The third motive is about integrating different lines of business which will result to a company which is a conglomerate of different companies. This ensures that such company as product of integration may at least have as many as possible to be offered in the market. Such will also create a sensible value. These motives are good and they promise significant results. However, one of the reasons mergers failed is due to the complex tasks involved in integrating two or more companies especially when there is also a need to integrate different production process, accounting methods or even corporate culture. These three are basic important reasons why mergers fail even if there is a promising motive behind the integration process. On the other hand, it is believed that the most valuable asset that a company can have is its human resource. Thus, if these employees are not motivated to take their new roles in the acquiring firm, the best of them might leave. Thus, creating a significant failure for the newly integrated firms. Regulatory authorities such as in the case of GE-Honeywell merger case has also contributed significant failure. It was hard to get approval from the European Commission due to the fact that such merger will eventually lead to monopoly and may essentially harm the competition in the future. This has something to do with the existing The Hewlett-Packard Company and Compaq Computer Corporation is a merger between two companies but such is said to be a failure due to leadership, legacy and cultural issues. If this is true then it is well supplemented by this case that indeed corporate culture is an important issue in any merging companies. All of these cases have simply shown the fact that there is a strong link between corporate culture and merger success. Thus, it is important to give more detailed emphasis on this issue by trying to understand the existing corporate culture in China and Africa. In doing this, there is substantial information that can be obtained in order to effectively handle whatever newly merged companies coming from Africa and China. There are two countries involved in here and it is important to consider that there are two different cultures are also considered. The goal now is to know the extent of their similarity or diversity. The ultimate way to do this is to evaluate the people involved because they basically are the ones to show the existing corporate culture in a certain country. It might be important to study their behaviors, attitudes, characteristics and perceptions. In this way, the ultimate goal is to create a certain level of leadership that takes into account the presence of sets of differences within an organization. This leads to formulating different styles of leadership that will necessarily apply in a certain situation. These different styles of leadership need to be translated into wide array of corporate cultures and their environment (Porter, 1980). Such according to Porter will lead to another edge to competitive advantage. Eventually, the newly combined companies have great chance to survive or succeed. Corporate culture Combining two different companies in a two different culture is not an easy task. It is a complex process and it requires one to fully understand the real culture existing between the two involved companies with different cultures. Let us take a look at it from the two emerging cultures of Africa and China. There is a need to do this because there is a great issue of control which at some point can be essentially addressed through behavioral approach. There is a strong sense in doing this because cultures affect human behavior (Feldman, 2003). Thus, one of the essential ways to understand corporate behavior is to understand existing culture within. China and Africa are two different cultures. Chinese as discussed in the book of Bjorksten and Hagglund (2010) have greatest motivation on economic incentives and they also need thorough supervision while responding to higher authority. It is clear from this report that one of the ways to keep things easy with Chinese employees is to motivate them with monetary incentives. However, there might be a bigger problem considering that there is a great need to substantially supervise them. In particular, a manager must necessarily practice his strong authority over these people because of a strong culture when it comes to positional power in an organization. As argued by Ross, Chinese prefer a highly centralized authority system (Ward et al., 2001). In China, people are also used to having flexibility in everything but they have a sense of making out the best of the time as observed in their investments in Africa which ranges from 50 to 100 years (The International Herald Tribune, 2011). This means that they have flexible schedules which can be bent from time to time as needed but they are highly serious in business. Thus, investors have been given the idea that they must be able to prepare the unexpected in China due to the unpredictable nature of the people when it comes to their commitment on certain things. In Africa, there is a great deal when it comes to committing mistakes and for asking apology. People have to save their faces from all the shame when mistakes have been committed but in a private manner together with the involved party (Richmond and Gestrin, 1998). In this regard, public apology is regarded as an intense way to put shame on the face and thus it is important to save integrity by resulting to private apology. In this regard, integrity is a very important corporate value in Africa. Furthermore, it is viewed that the key to develop professional and business relationship in Africa is through mingling with the people in there (Richmond and Gestrin, 1998). This is the ultimate way to conduct business with people and this can simply be implemented over food and drink, in the office, under the tree and wherever it is culturally acceptable. In short, there is a state of simplicity on how to motivate people and impart with them the vision that the company is heading to. There is a sense of predictability because of such integrity they believe that will keep them away from public shame. Corporate values and understanding differences Clearly, by understanding corporate culture in Africa and China, corporate values will be implemented. This is very important because it is only in this way that there is a unified approach of corporate culture that has to be agreed by the two parities. It is in this reason that the newly combined companies will be able to create an identity because of highly defined corporate values. In fact, corporate values are the basic units that make up the entire corporate culture (Rohm, 1970). It is by understanding the general culture between company from Africa and China before they merge is an essential step in order to choose a particular value that will reestablish a new culture that will complement differences. Differences have to be understood clearly because it is in this way that the ultimate solution will be unraveled. However, how to understand these differences? There are many ways to do so and one can be through combined observation and theory. Applying the concepts and existing theories about corporate culture and differences between organizations is a very important activity especially in process of combining two or more companies from two different cultural backgrounds. As discussed earlier, Chinese are known to give high importance for authority and in this sense they are most likely to be power-oriented. Based on Hofstede’s power distance dimension, Chinese may have been having hierarchical corporate culture. Since they give full reliance on authority, Chinese may substantially look for a leader that has considerable amount of authority and know-how. It is important therefore that the development of a leader in this case among Chinese culture has something to do with full development and who may be able to make out the best of the total dependence given by the subordinates. However, such dependence may be affected by the level of motivation involved considering that Chinese are highly influenced by economic incentives. Thus, in this case they may be able to create a strong denial of their real emotion on a certain situation just to be able to obtain their needs. In fact, they are strong enough to go for business and they are serious about it even if it means compromising the flexibility they have set for themselves. Such of this can be seen on Hofstede’s uncertainty avoidance. Thus, it may not be worthwhile to invest on relationship in this case considering that Chinese may be able to define the rules for their preference rather than on trusting relationships. This is a hard case to deal with and it only shows the unpredictable nature of Chinese in a corporate culture. Based on the idea of Hofstede Chinese are midway to uncertainty avoidance dimension and individualist dimension. This is to say that at some point, Chinese have known the real needs or desires they have. However, they may be willing to compromise them in replacement of something better they believe would be appropriate. However, they value so much all about business and such is a specific aspect of their lives which require human-time relationship as discussed by Hofstede. The corporate culture in Africa on the other hand is strongly linked to the underlying value dimension of Trompenaars. As stated earlier, it is part of their culture to value personal integrity that is why it is good for them to ask for apology privately rather than on public places. There is a higher form of emotional aspect involved in here and such is one of the best ways to be dealt with by a manager who is trying to integrate African culture with another culture. In this case, it is not worthwhile to discipline Africans in front of others due to the fact that they value so much their integrity in the public. A manager must be able to conduct necessary measure in private so as to gain sympathy, earn respect and trust among Africans. Thus, it is clear that African are much more on individualistic dimension because they are strongly linked to what the real intention or desire they have as bounded by their culture which the bottom line is suggesting self preservation for them. As can be noticed, there is a relatively substantial difference between African and Chinese culture. In fact, Chinese culture is unpredictable at some point because of their ability to go individualist or at some point on uncertainty avoidance. However, Africans are obvious that they have much of themselves the individualist approach as founded by emotion and other behavioral aspects in their corporate culture. A manager may find hard time solving this problem. Thus, there is a need to apply the necessary managerial skills to the highest level. A manager must be able to integrate the right approach in order to implement effective managerial decisions especially on issues with strong part for personnel management. It is clear at this point that the two cultures have different values. At some point they may complement but it is most likely that most of the time they will deviate from each other. It is important to use this information so as to create necessary measures from the point of view of a manager who is going to be in-charge at the time the merging process is undertaken. Chinese seem to have strong urge for business and everything may follow according to how everything has turned out to motivate them. Africans seem to be able to follow rules but it is important for them what the other might say about them. Thus, in both cultures, there is a strong need for reward system. For Chinese, reward system may be a strong motivating factor especially if it is going to be in line with economic incentives. For Africans, there is a need for reward policy system but such can be implemented even without monetary value since these people seem to have strong affinity to highest level of praise and names with impeccable moral standards. This is a bit awkward since the motives of these two cultures may clash at some point but the bottom line is found at how they are to be motivated. Of course, there is no clear assurance that this will perfectly work out as planned but the point is that there is always enough reason to try and try until the right formula are found. There is only a need to strongly define corporate values that may eventually result to a strong and unified corporate culture in the long run. Conclusion What makes merger substantially good as a concept is its promising motives behind. However, such of these motives may fail due to the fact that there are great and important considerations in the real world. For as long as a company exists to operate under political, economical, social, technological, legal and environmental considerations, there is no substantial assurance that merger will succeed. Corporate environment must absolutely be taken into detailed consideration in the first place. Part of this corporate environment is the existence of culture. It cannot be denied that culture influences human behavior. Running an organization requires people who are unique and perform individual task according to their behavior. It is absolutely hard to implement a strong unified culture in the case in which two different cultures have to be integrated. There is no assurance that everything will turn out just right. However, there is an assurance that the problem in doing this will be essentially considered before hand. Such of this can be analyzed by understanding the ideas of Hofstede and Trompenaars. The difference between Africans and Chinese lies on their ability to see things based on what are demanded by the society. Chinese are most likely to be hierarchical in nature and Africans are most likely involved in situations that include higher appraisal for prestige. In short, the best way to manage them together is to design a strong reward system to complement their cultural background. It sounds culture can be changed. In fact, it is clear in this case that culture can absolutely be changed over the course of time. References Bjorksten, J. and Hagglund, A. (2010) How to Manage a Successful Business in China. London: World Scientific. Epstein, M. J. (2005) ‘The determinants and evaluation of merger success.’ Business Horizons, Vol. 48(1): 37-46. Feldman, R. S. Essentials of Understanding Psychology. USA: McGraw-Hill. Porter, M. E. (1980) Competitive Strategy. USA: Free Press. Richmond, Y., and Gestrin, P. (1998) Into Africa: intercultural insights. USA: Intercultural Press. Rohm, S. (1970) Corporate Culture – How Corporate Culture is Managed in Organisations and what Could be done better. Germany: GRIN Verlag. The International Herald Tribune (2011) ‘In China, Prepare for the Unexpected’. [Online] Available at: http://www.nytimes.com/2011/01/18/business/ (Accessed: 18 January 2011). Ward, C. A., Bochner, S., and Furnham, A. (2001) The psychology of culture shock. New York: Routledge. Read More