With the deepening of industrial competition and the trend of economic globalization to further strengthen the M&A reorganization has become a common means of optimizing the asset allocation and expanding the scale of many enterprises. However, the essence of M&A restructuring is not a simple equity, asset turnover and superposition; but will be different enterprises together, the use of each party's advantageous resources, to achieve the optimization and integration of the merger and acquisition of enterprises to improve the production efficiency of the process. Therefore, enterprises must realize that the completion of the merger and acquisition transaction does not mean that the success of the merger and acquisition, many reasons will lead to the failure of the merger and acquisition, and one of the very important reasons is the merger and acquisition of the two sides of the problem of integration of corporate culture.

Cultural integration affects the success or failure of mergers and acquisitions

In recent years, domestic and foreign enterprises involved in mergers and acquisitions between the industry, region and scale are expanding, mergers and acquisitions, and the wave of ups and downs, and in the case of this many mergers and acquisitions, the proportion of the real success is not high. According to Renda Fangliang Management Consulting Assistant Chairman Lai Liang, theoretically, through mergers and acquisitions after the restructuring and integration of the organizational system, operating procedures and operational steps, such as the organic combination, helps to focus resources, synergies, improve efficiency and cost savings. However, financiers and M&A enthusiastic managers tend to forget one point: the realization of corporate goals is accomplished by people. How to harmonize the relationship between people and things, and how to bring out the motivation and team spirit of employees from different cultural backgrounds is a difficult problem in M&A integration.

According to Mr. Liliang, in the hundreds of M&A and restructuring consulting practices he has participated in over the years, he has found that the success of an M&A depends on the success of three key aspects: industry selection, capital integration, and integration of corporate culture (see Figure 1: The 3 Key Factors for Successful M&A).

Industry selection and capital integration should be considered at the beginning of the M&A, is the foundation and premise of M&A work, do a good job of them for the realization of the M&A transaction is the most important, how to do a good job of industry selection and capital integration has a lot of external forces can be drawn on. However, if you can not carry out cultural integration, the physical nature of the reorganization is just a few of the original enterprise into a business now, the enterprise is nothing more than a simple 1 +1 joint, is the production factors random and simple superposition, enterprise reorganization without any effective change, the result is the set but not the group, but the increase in the level of management, the management of the chain lengthened in vain to increase the cost of management, the enterprise's economic benefits The result is a set of more than just a few management levels, a longer management chain, and more management costs.

As one of the three key factors affecting the success or failure of M&A and ultimately realizing the purpose of M&A, the integration of corporate culture is more like a chemical reaction process, which is not a simple replacement of equity, assets and superposition, but through the internal resources of the enterprise advantages of complementary and personnel, cultural integration, to achieve the enhancement of the ability to enhance the control of risk, management capacity to enhance the multiplication of economic benefits, and ultimately make the M&A Play 1+1>2 optimal efficacy. But because the corporate culture as a potential ideology, is through the influence of the staff's psychology and behavior to indirectly affect the use of tangible assets and the overall collaboration, and ultimately affect the realization of the expected goals of the enterprise mergers and acquisitions; therefore, enterprises in the merger and acquisition restructuring is often insufficient to recognize the importance of its, resulting in the merger and acquisition process lagging behind; and the integration of corporate culture and a lengthy process, and at the same time this process It is difficult to complete with the help of external forces. Therefore, the integration of corporate culture often becomes the last hurdle that affects the success or failure of M&A.

Causes and roots of cultural conflict in M&A

In the tide of economic globalization, the division of labor and cooperation, mergers and acquisitions occur frequently in different types of enterprises, in different fields and in different regions. And different cultural backgrounds, languages and customs will form different cultural attitudes and perceptions, and also cause communication misunderstandings. Lai Liang said that for enterprises in cross-cultural contexts, the triggers leading to culture clashes include different values, cultural intermingling, differences in ways of thinking, stereotypes, complexity of the business environment, and management styles, in addition to the five aspects described by Hofstadter such as individualism vs. collectivism, power distance, avoidance of uncertainty, masculinity/femininity, and short-term goals vs. long-term goals, Racial superiority, communication barriers, standards for judging effectiveness and religious beliefs, business taboos, customs and habits. The root cause of corporate culture conflict lies in the contradiction of strategic objectives, resource endowment and interests.

The first cause of corporate culture conflict in mergers and acquisitions is the disagreement on strategic goals. Corporate goals are often the embodiment of the personal dreams and pursuits of the founders of the organization and its leaders, and members of the organization due to their respective cultural backgrounds, jobs, education, gender and other differences in the attention, understanding and cognitive level of the goals are different. Some people can't understand, some people even oppose, some people take a negative attitude of blind obedience, thus manifesting themselves in people's resistance to and conflict with the values and norms advocated by the enterprise.

Secondly, the different resource endowment of the members of the organization is another source of corporate culture conflict, this cultural conflict is mostly manifested in the merger and reorganization of two or more enterprises of comparable size, joint ventures and cooperation. When we come together, we are bound to seek a value-added, integrate the resources of both sides, and maximize the overall interests. However, the weakness of human nature is often revealed at this time, whether the cooperation participants sincerely contribute their own special resource endowment, often determines the success of the cooperation or rupture.

In addition, the pursuit of different interests can lead to cultural conflicts. In mergers and acquisitions, once members of an organization join a particular organization, on the whole, they are accepting of the organization's goals and its code of conduct, and sometimes, although they do not understand it, they succumb to the various benefits and interests that the organization can bring, and will abide by the organization's code of values. However, human greed can rarely be overcome, and conflicts of interest between collaborators due to human greed often manifest themselves as a clash of cultures.

Organizations need to find a balance between strategic goals, resource endowments, and interests. Strategic goals are consistent, resource endowment is balanced, but their interests are not consistent, there will be conflict; strategic goals are consistent, the same interests, but all the resources used in their respective endowments can not be balanced, the conflict will still occur; interests are the same, the resource endowment is balanced, but the understanding of the strategic goals of the different, but can not be realized.