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7 step guide to Cultural integration in international Mergers and acquisitions

Mergers and acquisitions across the border are very common in today’s world. In fact it is considered to be the fastest non organic way of growth. However whenever Mergers and acquisitions happen in international space, the cultural integrations and adjustments play a very important role. Cultural integration is the first step while you embark to join two companies work wise, system wise.

What is cultural integration in international mergers and acquisition?

In case of international mergers and acquisitions people from two countries come together and they always have various apprehensions some of which are listed below

  • What would happen to their existing positions?
  • What benefits and facilities they will loose?
  • What will happen to their promotions, increments etc?
  • What will be the changes in their personal policies?
  • Will they have a new reporting structure and new bosses whom they have not seen them at all?

The whole atmosphere really gets unnerving and people react very sharply to such situations. International mergers and acquisitions also depend fully in to successful merging of two very different cultures and translate that in to operations as well.  Initially people do react with suspicion and they get in to mode of non-cooperation.

Management has to play a key role in any international merger or acquisition and role will change depending upon which side you are buyer or acquirer …. If you are on an acquirer’s side then management has to play a very different role

Tips for implementing a cultural integration in international mergers and acquisitions

  • Once the initial MOU is signed off and confirmed the management team of the acquirer should start interacting with the management team of the seller to get them on board and understand their point of views as well as give them the glimpses of the new arrangement.
  • Once the deal is sealed it is very important in international merger that acquirer make the visits to sellers facilities and has a multiple town hall meetings with the staff and get in to informal conversations as well.
  • It is extremely important to project the approachable and humane side of the acquirer’s management to the sellers staff and assure them about the safety of the jobs which is of paramount importance.
  • On site presence of the senior leadership of the acquirer in such M & A is very important since it gives them insight in to multiple things which can be written down or captured in reports. Specifically the culture, work habits, male-female dominance in work culture, their working style, their communication with each other etc.
  • In any international merger and acquisition it is important that sellers team feels at home with acquirer and they start talking to their counterparts in other company. However the matter does not end here and the real teething troubles start afterwards when there are culture issues, different styles of working clash with each other and many a times even language makes it difficult to understand each other and it leads to confusion.
  • In every international merger and acquisition situation exchange of employees between the two companies is very critical and making them travel to each other’s country and work from there helps to increase the bonding on personal level.
  • Once the teams get along with each other rest of the things in operations become well-oiled machine and they start functioning smoothly.

Cultural integration in international merger and acquisition can not be documented with commercial agreements but they are very much an part of the whole process. A lot depends on how two management teams work on this side of the deal.

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