M&ACulture Issues

2 + 2 = 5 effect

To Reinvent our Business

Model

To Boost Our Company's

current Performance2 Reasons

M&A

Study By Hewett Association

162 Organization

At least 1 M&A

M&A failure 70% - 90%

69% says Culture as Main Challenge during

M&A

Team resourcing

Ignorance Poor governance

Nasty surprises resulting from poor due diligence

Lost baby with bathwater

No common vision

Poor programme management

Lack of courage Weak leadership

Poor communication

No common visionLack of courage

Ignorance

Poor governance

Weak leadership

Team resourcing

Lost baby with bathwaterPoor programme management

Impact of Culture

Mergers & Acquisitions

on

Pitfalls

List-making

Preoccupation

Organizational Proliferation

Infrequent and irrelevant communication

Triangulation

The relatives

The guiding light

7

Preoccupation

Canada individual preoccupation "How is this all going to impact me?"

France and Italy turn to unions Go on strike

strikeFrench railroad

subway workers December 1995

Demise of the Juppé government

Example

Acceleration

Strategy

List-making

Example

Mexicans

require

structure and definition

role and responsibilities

than do Canadians

ConcentrationStrategy

Organizational Proliferation

Canadian managers expect input from these teams and committees

French members of these committees and teams

expect direction from their managers.

Example

StrategyAccelerate,

Concentrate &Adapt

Infrequent and irrelevant communication

The working languages of the two organizations involved are not the same.

Case of a Norwegian - American joint venture

PricewaterhouseCoopers survey of 124 mergers

StrategyAccelerate,

Concentrate &Adapt

Triangulation

Strategy

Clear lines of authority

Clear understandingWeb of conflict

Filipino employee Two

Managers

Quickly overwhelmed

Perform two separate jobs

Concentrate andAdapt

The relatives

The relative forces of time and space

adapt

long-term

North America 3 years

Japan 30 years

Different time zones, regions, countries and organizational

units.

adapt

Strategy

The guiding light

Example- Charisma and a positive personal image are important

attributes of leadership in the U.S., more so than in Canada.

Primary roles Leader Vision and inspire others

adapt

Strategy

Overcoming The Culture Impact

Pre Combination

Combination(integrating the

companies)

Solidification and Assessment of the

new entry

-Swiss-Long Term Oriented

-Canadian-Short Term Oriented

Tata Motors-Jaguar Land Rover $2.3 billion

Queries

Source: Bloomberg & ET