Cross boundary merger and acquisition can bring great advantages but also risky of failure. Research shows, that the failing rate is really as high as 50% (Valant, 2008). The primary reason for your are cultural variations (Badrtalei and Bates, 2007). One of the biggest merger which has failed is the merger between Daimler and Chrysler.
The goal of this group assignment is to show differences of the corporate culture of Daimler-Benz and Chrysler as well as the main intercultural communication issues within DaimlerChrysler. Finally some suggestion will be presenting in order to reduce the mentioned issues. The culture models by Geert Hofstede and Fons Trompenaars are used for a crucial evaluation in this work.
Organisational culture is a key factor for business success of companies. Our explanation of organisational culture can be an understanding for customers of a business and their values which affect perceptions, thoughts, action and feelings of the customers of the organization and manifest in their activities and artefacts. In mergers and acquisitions, companies have two different organisational civilizations which have to have success. This integration process is not without problems, specially when it comes to international mergers with different nationwide cultures. Insufficient attention of ethnic differences might lead to resistance and conflicts. This causes significant additional costs and in acute cases it leads even to failure. That is shown in the example of the failed takeover of Chrysler by Daimler-Benz.
In order to avoid failing, Daimler-Benz and Chrysler must have focused on organisational culture already in the preparatory period. A bicultural audit may provide in this early on phase a ethnic evaluation of both organisations predicated on information from the web, statements from clients or ex - employees of preliminary results on potential risk factors. More reliable information may be obtained only after the announcement of the offer through interviews with managers and staff, through interviews and concentrate groups. They could been employed by out the foundation of pre-defined proportions, such as customer orientation, management style and communication behavior, the similarities and dissimilarities in the gatherings.
The decision on the depth of integration mainly determined the proper execution of cultural unification. The options are summarised the following: (O'Reilley, C. 2001)
Crucial for success is creation of quality how quickly the prospective culture of the recently created company appears like - what norms, beliefs and principles to utilize and how to implement those in to the daily work.
Figure 1 provides information about the action which should have been taken into account by Daimler-Benz through the preparation stage towards cultural fit and during the integration level towards a standard focus on culture.
During the integration level there are always a couple of things essential for successful social integration: (O'Reilley, C. 2001)
The insufficient information and communication are quickly substituted by rumours and blend up uncertainty and dread. The management must face existence in the employees and make clear their strategy and the objectives of the newly formed organisation. Personnel meetings, information stands before the canteen or breakfast time meetings are a useful tool. Furthermore, communication activities are targeted to create acceptance of the new situation among the employees. Communication can be an important lever to develop the readiness for change in direction of the target culture and achieve recognition with the new company. This requires that the great things about this technique of change are made clear for each individual. Therefore the meaning, advantages and aims of the deal must have been communicated evidently.
In addition, a good communication and personal associates between employees, exchange trips to sites, the mixture of groups, team development, integration and management training workshops are important and supportive tools on the way to a common culture.
Finally, integration workshops are suited as launch happenings for the social integration. The employees, the new corporate and business strategy as well as the principles and concepts of the new organisational culture can be released and discussed. This integration workshop should give room for debate to enable an exploration of this content as well as the release of team-specific issues. Strategy and worth must not continue steadily to open up questions of management, but should be earned the influence area of every employee. This process takes time which is not done with a single workshop. To promote the development of the new culture and also to ensure sustainability DaimlerChrysler must have been triggered the whole process.