INTERNATIONAL MANAGEMENT SUBJECT

International Management Subject



International Management Subject

Introduction

What is culture?

Culture structure comprises of beliefs and expectations shared by the Organization members. These beliefs and expectations produce norms that govern the behavior of both individuals and groups within the organization. Culture, as a rule is long-term, strategic, and difficult to change(Mcsweeny 2008:696). It is rooted in the beliefs and values. Organizational culture is also a general sense of how things are done around, the decisive factor in the management of day-to-day behavior and the formation of future actions.

Hofstede lists a wide range of national institutions, events, and artifacts - including 'architecture', 'religion', 'literature', 'industrial relations systems', 'family structures', 'religious organizations ', 'scientific theories', and 'social stratification' which he claims are 'consequences of ', or 'crystallizations of ', national cultures. Indeed he seems to suggest that the list is unlimited: "no part of our lives", he states, is exempt (Hofstede 2010:1).

However the problem arises when this particular organizational culture is threatened, or needs to be altered to suit the diverse tastes and inclinations of people living in other countries or regions, especially in case of international mergers and acquisitions.

The amount & number of mergers & acquisitions has risen considerably in recent years as a result of increased competition, expansion in universal markets, & rapid changes in technology (Williamson 2000:56). The purpose of this paper is to examine some of the issues involved in cross-border mergers among transnational companies, suggest ways to beat the troubles encountered in cross-border mergers & presents a case research of how a German transnational firm overcame the troubles face in a recent alliance with a U.S. firm(Cording et.al 2008:744).

The number of employees employed by overseas firms has grown significantly over the past 20 years as a result of the expanding activities of overseas affiliates of transnational companies around the world. For many workers, both employers & employees, this has brought home the reality of globalization. An estimated 73 million workers worldwide (including 24 million in China) now work for overseas firms, almost three times more than in 1990(Corvellec2007:12). Firms like Motorola, General Motors, British Petroleum, & General Electric are among the largest employers in the private sector in economies such as Malaysia & Singapore. International understanding of culture-specific variation enables them to learn & adapt to the variation that are significant to administrators. Culture can be defined as "the sum total of beliefs, standards, techniques, institutions, & artifacts that characterize human populations" 2 or "the collective programming of the mind." (Arnold 2008:12) Sociologists generally talk about the socialization process, in reference to the pressure of parents, friends, education & interaction with other members of a society as the basis for culture.

Research has shown that 60-80% of international mergers fail because the firms concerned have put measures in place to deal with culture-specific variation like these, or integrate both national & organizational cultures. The development of a "third culture" that is understood & accepted by employees throughout the firm is one of the best ways to ...