MANAGING THE INTERCULTURAL ISSUES IN AUTOMOTIVE INDUSTRY MERGERS AND ACQUISITIONS
MANAGING THE INTERCULTURAL ISSUES IN AUTOMOTIVE INDUSTRY MERGERS AND ACQUISITIONS

Summary/Abstract: Mergers and acquisitions are a strategic choice to grow quicker, enter new markets and maximize companies’ capabilities which otherwise would not have been possible. Within the automotive industry this phenomenon has been seen repeatedly with examples like the Mitsubishi - Daimler, Jaguar - Ford, Daimler-Chrysler, Seat-Volkswagen, Daewoo-General Motors and Land Rover -Ford. Although M&A activity has trended directionally consistent with automotive assembly volume, there are some failure cases within automotive industry M&As (e.g. Rover-BMW). In this paper, the focus will be on the intercultural issues of the M&A phenomenon: attitudes, cultures, values, tradition etc. The underestimation of the cultural factors has significant impact on why M&A operations sometimes fail to achieve the pre-defined goals. It is of vital importance for the automotive companies to understand and be aware of these intercultural issues in order to be successful in their merger or acquisition. The understanding and awareness of cultural differences have to be built and developed in order to avoid cultural conflicts and clashes.

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