Report on Mix Culture

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Contents

Introduction3
Cultural theory a main reason for failure of Daimler-Chrysler Merger4 Issues to be dealt with to make cross culture merger a success4 Recommendation6
Renault’s choose a joint venture entry mode over Green Field to enter the Indian Market6 Advantages and Disadvantages of Renault using Joint Venture and a theory on Renault as a good corporate citizen7 Recommendation and action plan8

Conclusion9
References10

Introduction

Companies are growing globally and making an investment in countries or areas of an economy to strengthen their companies in Global Market but it is an important decision for the Company to decide the best mode for entry in the Foreign Market. This report is based on the issues that a company should take care before making a selection in the Foreign Market. A Company should get the pre merger Due Diligence before making a move in Foreign Market to analyze the factors that plays a vital role for the potential market selection.

The main objective of the report is to analyze the risks involved in making a cross-cultural merger and the kind of difficulties which have led to failure of some cross-cultural mergers. The report also deals with the methods through which a cross-cultural merger can achieve the motive for which it was eventually formed and to make a cross-cultural merger a success.

The report concentrates on the concept that if a proper education and training is being given to the Companies pre and post merger it will help the companies to understand the behavioural and process of the counterparts. As the cross cultural merger is eventually a beneficial transaction for the companies as it helps in reducing the risks involved in the projects for the company.

The definition of merger in general and finance can be stated as follows:

General,

“Merger is absorption of one or more companies by a single existing company”

Finance,

“Merger is an act or process of purchasing equity shares (ownership shares) of one or more companies by a single existing company”[1]

Therefore, Merger can be defined as that when two or more companies decide to come together to carry on the respective ventures with a common interest and benefit with an intention to grow in the respective location or market.

An Organizational Change is an attempt to achieve an ideal state through a continuous process of execution, evaluation, goal-setting and restructuring.[2] It is an important process for the growth of the company to evaluate the standing of the company in an International Market by restructuring the programs and setting up a short term and long term goals.[3]

A failure of an Organizational Change is based on various issues and generally the Companies are overlooking the factors involved like Pre Merger Due Diligence, Pre-Merger Cultural Due Diligence, Post merger training programs, making a vision of change, communicating the vision of change to the employees, setting up short term goals based on the change, building the change and Setting up a Long term goals based on Change. If after an Organizational Change the Companies are able to develop the trust and understanding in and among the employees.[4] The Companies will be able to achieve the motive of entering into a cross-cultural merger and to make Companies a great success.

Cultural theory a main reason for failure of Daimler-Chrysler Merger

It is absolutely correct that Mergers and Acquisitions take place to realise the synergies between two or more companies involved but in case of ‘Daimler-Chrysler’ a mismatch in cultures was the one of the main reasons for the failure to realise the synergies that were expected from it. As in the aforementioned merger, both the companies belonged to different cultures, as the Daimler belonged to Germany which is the Eastern Culture...
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