Cultural Integration of Cross-Border M&A Activities in the Chinese Auto Industry : Case Study: the Acquisition of Geely and Volvo
Wan, Ruoling (2015)
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Along with the development and strategy change of Chinese economy, an increasing number of Chinese companies tend to start their globalization via cross-border mergers and acquisitions. However, the huge cultural differences usually cause cultural conflicts, which can be great challenges and obstacles to companies who are seeking to develop overseas. Thus, in the post-merger stage, it is significant for Chinese companies to pay enough attention to cultural integration in order to improve the success rate of cross-border M&A activities. This thesis introduces the current situation of the Chinese auto industry and analyzes their performances after M&A activities. Then, cultural integration in the Chinese auto companies’ cross-border M&A activities is introduced and the acquisition between Geely Holding Group and Volvo Car Corp is studied as case company to make further research. The theoretical part of the thesis introduces Hofsted’s 6D-model to analyze national culture difference between China and Sweden, uses Schein’s theory to compare company culture difference between Geely and Volvo, and applies Berry, Nahavandi and Malekzadeh’s models in order to find the proper process and model for their cultural integration. A qualitative research method is chosen and employees from Geely and Volvo are selected as interviewees when I collect the company cultural differences from both companies. The result illustrates that the cultural integration process would be suitable if using “separation model” at the beginning stage and then using “integration model”.