Working Abroad - Cultural Differences impact Mergers and Acquisitions

According to a KPMG study, "83% of all mergers and acquisitions (M&As) failed to produce any benefit for the shareholders and over half actually destroyed value". It was cited that the overwhelming cause for failure "was the people and the cultural differences".

Difficulties encountered in M&As are amplified in cross-cultural situations, when the companies involved are from two or more different countries.

Merger success is possible; however, being part of the 17% that succeeds, rather than the 83% that does not deliver, requires more than insight. Merger success is based on acceleration, concentration and creating a critical mass for operational change (adaptation).
Up to the point in the transaction where the papers are signed, the merger and acquisition business is predominantly financial - valuing the assets, determining the price and due diligence. Before the ink is dry, however, this financially-driven deal becomes a human transaction filled with emotion, trauma, and survival behaviour - the non-linear, often irrational world of human beings in the midst of change.
In the case of international mergers and acquisitions, the complexity of this process is often compounded by the difference in national cultures. People living and working in different countries react to the same situations or events in very different manners.
Therefore, a company involved in an international merger or acquisition needs to consider these differences right from the design stage if it is to succeed.

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Chinese Cultural Know-How

As promised here is the 4th installment of information on Chinese Cultural know-how:


Socialising, eating and drinking:

Hospitality is an integral part of Chinese culture, and an invitation should be seen as a great honour.


• If you eat in a restaurant you should not offer to share the bill, but you will be expected to reciprocate. Tipping is technically illegal in China, and you will not ever be expected to leave anything.

• If you are invited to the home of a Chinese person and you cannot attend, be sure to explain why so that you are not seen as disrespectful.

• Arrive on time and remove your shoes on entering a Chinese home. Bring a small gift, and remember to eat well and compliment the food.

• Never eat the last piece from a serving tray, and wait for your host to start eating before you do. Learn to use chopsticks and try everything you are offered.

Would you like to know more about Chinese culture or living and working abroad in China?

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Cross-cultural know-how for first time meetings

3 cultural know-how tips about first meetings, that I recently read on linked in........

1. Dress conservatively

You are planning to attend two important networking events: one in Milan, Italy, and another one in Dubai, UAE. How do you think your typical conservative suit would be perceived in these cultures?

In Italy, and particularly in Milan, the capital of fashion, the dress code is not to be overlooked. Style of dress is of the utmost importance, as outward appearance is indicative of inner values. Clothing is considered a reflection of your social standing, family background, education level, and overall level of competence. Therefore, dressing too conservatively or not making the extra effort to follow the current trends may give quite a bad impression.

On the other hand, your knee-length skirt, or tight-fitting trousers may be considered inappropriate in Dubai, where women usually wear loose-fitting dresses and show as little skin as possible. In Arab countries, modesty in dress and behaviour is the basis for respect. Not taking this into account may not only give a bad impression but even cause offence.

2. Greet every one with a firm handshake


The British handshake is a firm, quick shake. The firmness of the handshake is supposed to convey both dynamism and sincerity. It is considered acceptable for women to instigate handshakes with other men and women. But is it the same in Japan or Saudi Arabia for instance?

In Japan, hand shaking can only happen when an older and higher positioned Japanese person offers his hand to a younger person but never the other way round. Besides, handshakes are not supposed to be strong, and they seldom are. Therefore, a senior Japanese may not appreciate you instigating a firm handshake with him and may even feel offended by your obvious lack of respect.

In Saudi Arabia, physical contact between men and women is to be avoided. Be aware that while Saudi men may shake hands with other Western men, some Saudi men will not shake hands with Western women. You should therefore let them initiate the greetings and follow their lead.

3. Smile


British people tend to be quite reserved – there isn't generally an extensive use of gestures or facial expressions in the UK. A British person making a special effort to smile may appear moderately expressive in comparison to other cultures.

In Nigeria, smiling and showing sincere pleasure when meeting a person is important. People tend to be very expressive and more use is made of facial expressions than would be the norm for Northern Europeans. Warmth and friendliness are highly valued qualities. Neutral facial expressions are likely to be interpreted as a lack of interest in the other person.

However, smiling too much may be considered suspicious in Russia. Russian people tend to be rather formal, unsmiling, reserved and poker-faced at first encounters. They tend only to warm up when they are starting to appreciate and trust you.

Successful meetings...................