Intercultural Challenges and Cultural Differences Derived from Cross-Border Post M&A Integration Process: Case study

Abstract

Cross-border M&As have become increasingly dominant due to the supplementary benefits beyond the national border can deliver in addition to the domestic deals.Though cross-border transactions give opportunities with customer expansion over seas, companies are also confronted with new barriers and complexity. The cultural difference in post-M&A companies is much larger in cross-border cases whenmore sophisticated integration is required for companies from different nationalcultures.This master thesis presents a model based on theories that determine fundamentals of cultural differences from three levels, from national, organizational, to personal. This model of cultural onion can be demonstrated in correlation or interrelation to each different cultural level, where outer layer can influence the inner most layer. Under the scope of research question focusing on the cross-border M&As, not only national differences were challenging the M&A integration process, but also organizational and personal differences were equally impacting the practice of merging businesses. The cultural gaps as an outcome served to create difficulties in the marriage of two completely different companies from the different business sectors. However,secondary factors such as communication, human interaction, system integration, and knowledge transfer also found to be contributing to the challenges faced by the companies amid M&A activities.