The Global M&A Tango: How to Reconcile Cultural Differences in Mergers, Acquisitions and Strategic Partnerships (2nd ed.)

Citation

Trompenaars, F. and Nijhoff Asser, M. (2012), "The Global M&A Tango: How to Reconcile Cultural Differences in Mergers, Acquisitions and Strategic Partnerships (2nd ed.)", Human Resource Management International Digest, Vol. 20 No. 7. https://doi.org/10.1108/hrmid.2012.04420gaa.012

The Global M&A Tango: How to Reconcile Cultural Differences in Mergers, Acquisitions and Strategic Partnerships (2nd ed.)

Article Type: Suggested reading From: Human Resource Management International Digest, Volume 20, Issue 7

Fons Trompenaars and Maarten Nijhoff AsserInfintieideas, £20, ISBN: 9781906821050

In The Global M&A Tango, Fons Trompenaars and Maarten Nijhoff Asser present a framework for reconciling the dilemmas that arise in the context of mergers, acquisitions and alliances.

The authors propose a structured approach to creating harmonized cultures in order to make mergers successful. They put forward the idea that, by integrating the best of both organizations, mergers and acquisitions can lead to better performance.

Mergers are a deeply integrative process that require the co-operation of both parties. As the authors note in the preface, “Mergers and acquisitions need to be in the business of marriage, not simply weddings.”

Since combining values and overcoming common obstacles to integration are not easily accomplished, a systematic framework is required. The purpose of the book is to give business people a generalizable, reliable, systemic and consistent ten-step process aimed at creating sustainable and integrated value from the distinct organizational, team and leader cultures.

The first part of the book provides the rationale for developing a practical framework. Most mergers and acquisitions do not reach their expected objectives. The challenges and key issues facing successful mergers and acquisitions have been well identified (project-planning integration, due diligence, selecting the management team, resolving cultural issues and so on) but they need a practical framework to be implemented successfully.

The authors argue that the main reasons for merger failures are cultural differences. The process for overcoming obstacles is the same for any company, they claim, but the dilemmas and challenges are unique for each case.

The assumption underlining their method is to create new values for the two merged organizations. Values are seen as an aid to reconcile key dilemmas through a created, shared reality, rather than focusing on differences. Considering leaders as the implementers of the integrative change, the authors focus on the leadership team as the target of their model.

The second part of the book focuses on the authors’ approach. It is divided into three stages: creating a compelling business case; developing an implementation strategy; and realizing and rooting the benefits.

The authors provide helpful examples – and cases from Geodis, Cisco, IBM and UniCredit – to illustrate the applications of their method, which business people might find useful should they have any expectations concerning practical experiences.

Part 3 looks at dilemmas associated with relationship management. This last chapter gives further help in applying the ten-steps framework through an analysis of “10 golden dilemmas” (frequently recurring dilemmas) and explores the issue of trust.

The authors offer tips for the practitioner to facilitate a diagnosis, such as using a cascading approach (starting with the top-management team and working in small sub-groups) and repeated questioning to elicit the fundamental purpose of the organization. One tool that the authors employ to explore the core values is the use of metaphors to stimulate the participants to detach from their current reality.

The authors suggest employing semi-structured questionnaires and an organization-value profiler (OVP), an assessment tool, which they have developed. This aims to identify the similarities and differences in the organizational cultures involved and the values of the existing organizations that will challenge and influence the merger or acquisition. The respondents (executives and managers) are asked to give two sets of ratings for their own organization in order to explore the “current” and “ideal” organization.

In addition to the OVP, the personal values of key players are assessed using their personal-value profiler (PVP). Results from the OVP and PVP should ideally match. The core values can be defined where the PVP validates the OVP.

The authors advise to identify and maintain four core values, which can be translated into desired behaviors through activities such as running a workshop or producing a charter that stipulates the desirable and undesirable behaviors for every core value selected. These are measured and reinforced through key-performance indicators (KPIs).

In summary, the philosophy underlying the authors’ methods is to take advantage of differences to maximize performance using reconciliation.

Readers may be disappointed if they were expecting to find a “ready-to-use recipe”, as claimed at the start of the book. The authors do not fulfil their goal, even if we are all aware that there is no magic formula. Apart from the case studies and business examples, there are no documented effects of the model. The authors fail to present a case for the development or operationalization of their tools or provide statistical data to illustrate the relevance or the feasibility of the method in practice.

As far as business people are concerned, therefore, the usefulness of the model will be limited. The number of tools developed can be very confusing and it is easy to lose focus of the objectives. The burdensome processes that the leadership team has to go through, including four to five instruments, raises the question of feasibility in a day-to-day business context. Is it affordable in an M&A integration and post-integration context? Is it justified? Do we have any data about the return on investment?

Reviewed by Muriel Durand.

A longer version of this review was originally published in Cross-Cultural Management: an International Journal, Vol. 19 No. 2, 2012.