Günter K. Stahl

Do Cultural Differences Matter in Mergers and Acquisitions? A Tentative Model and Examination

Asubstantive body of theory and research on the role of culture in mergers and acquisitions (M&A) suggests that cultural differences can create major obstacles to achieving integration benefits. However, the opposite view---that differences in culture between merging firms can be a source of value creation and learning---has also been advanced and empirically supported. In an attempt to reconcile these conflicting perspectives and findings, we present a model that synthesizes our current understanding of the role of culture in M&A, and we develop a set of hypotheses regarding mechanisms through which cultural differences affect M&A performance. The results of a meta-analysis of 46 studies, with a combined sample size of 10,710 M&A, suggest that cultural differences affect sociocultural integration, synergy realization, and shareholder value in different, and sometimes opposing, ways. Moderator analyses reveal that the effects of cultural differences vary depending on the degree of relatedness and the dimensions of cultural differences separating the merging firms, as well as on research design and sample characteristics. The implications for M&A research and practice are discussed.

Handbook of research in international human resource management

Contents: Part I: The Role of International Human Resource Management Part II: Research on Global Staffing, Performance Management and Leadership Development Part III: Research on International Assignments Part IV: Research on International Teams, Alliances, and Mergers and Acquisitions Part V: Theoretical Perspectives on International Human Resource Management Index Contributors: A. Bird, I. Bjorkman, J. Bonache, C. Brewster, P. Caligiuri, S. Canney Davison, W.F. Cascio, D. Collings, H. de Cieri, J. Dietz, P.J. Dowling, E. Farndale, M. Festing, J.L. Gibbs, P.K. Goulet, H. Harris, M. Harvey, J. Hearn, K. Jonsen, M.B. Lazarova, C.A. Lengnick-Hall, M.L. Lengnick-Hall, M. Maznevski, M. Mendenhall, B.D. Metcalfe, S.S. Morris, M.M. Novicevic, A. Osland, J.S. Osland, J. Paauwe, T. Peltonen, L.-E. Petersen, R. Piekkari, P. Rosenzweig, R. Schuler, D.M. Schweiger, H. Scullion, S.A. Snell, P. Sparrow, G. Stahl, P. Stiles, I. Tarique, D.C. Thomas, D.E. Welch, E. Whitener, V. Worm, P.M. Wright

Global careers in French and German multinational corporations

This paper sheds light on an apparent paradox: managers continue to accept offers of international assignments even though they tend to view them as a risky career move. Based on a review of the literature and a survey of expatriate managers of 20 French and 30 German companies on assignment in 59 countries, the paper examines the nature of the expatriate career concept, the career development implications of international assignments, and the effectiveness of corporate expatriate career management and repatriation systems. Most of the research on the career implications of international assignments has been conducted using the US samples of expatriates. By exploring expatriate career issues in a cross‐national sample of French and German expatriates, this study seeks to yield new and significant insights into whether the emerging concept of boundaryless careers is beginning to take hold in countries other than the US, and whether there are cross‐national differences in the nature of the expatriate career concept. The findings show that many expatriates are frustrated with how their companies manage their international assignments, especially the long‐range planning of their repatriation. However, there are clear differences between the French and German expatriates in terms of repatriation concerns. Despite widespread dissatisfaction in both groups, the German expatriates seem relatively nonchalant regarding their repatriation. This finding can be explained by the fact that the German expatriates are more willing to leave their companies upon return than their French counterparts, thus showing strong evidence of a “boundaryless career” orientation. An important finding is that companies that fail to take an integrated approach to international assignments and do not have effective international career development and repatriation systems, tend to end up with highly dissatisfied managers who, depending on their nationalities, may be quite willing to leave their companies upon repatriation.

The Impact of Organizational and National Cultural Differences on Social Conflict and Knowledge Transfer in International Acquisitions

The purpose of this paper is to elucidate the effects of organizational and national cultural differences on international acquisitions. We argue that cultural differences prompt social identity building that leads to ‘us versus them’ thinking and thereby creates the potential for social conflict. We also maintain that the same cultural differences can contribute to learning in terms of knowledge transfer. We develop a structural equation model to test these hypothesized effects on a sample of related international acquisitions. Our analysis shows that cultural differences at the organizational level are positively associated with social conflict, but that national cultural differences can decrease social conflict. Furthermore, both organizational and national cultural differences are positively associated with knowledge transfer. This analysis shows the importance of disentangling the various effects that cultural differences have on international acquisitions. It also suggests that national cultural differences are less of a problem in international acquisitions than is usually assumed.

IMPACT OF CULTURAL DIFFERENCES ON MERGER AND ACQUISITION PERFORMANCE: A CRITICAL RESEARCH REVIEW AND AN INTEGRATIVE MODEL

This paper provides a review of theoretical perspectives and empirical research on the role of culture in mergers and acquisitions [M&A], with a particular focus on the performance implications of cultural differences in M&A. Despite theoretical and anecdotal evidence that cultural differences can create major obstacles to achieving integration benefits, empirical research on the performance impact of cultural differences in M&A yielded mixed results: while some studies found national or organizational cultural differences to be negatively related to measures of M&A performance, others observed a positive relationship or found cultural differences to be unrelated to M&A performance. We offer several explanations for the inconsistent findings of previous research on the performance impact of cultural differences in M&A and develop a model that synthesizes our current understanding of the role of culture in M&A. We conclude that the relationship between cultural differences and M&A performance is more complex than previously thought and propose that, rather than asking if cultural differences have a performance impact, future research endeavors should focus on how cultural differences affect M&A performance.

Quality of Communication Experience: Definition, Measurement, and Implications for Intercultural Negotiations

In an increasingly globalized workplace, the ability to communicate effectively across cultures is critical. We propose that the quality of communication experienced by individuals plays a significant role in the outcomes of intercultural interactions, such as cross-border negotiations. In 4 studies, we developed and validated a multidimensional conceptualization of quality of communication experience (QCE) and examined its consequences in intracultural versus intercultural business negotiations. We proposed and found 3 dimensions of QCE-namely, Clarity, Responsiveness, and Comfort. Findings from intercultural and same-cultural negotiations supported the hypotheses that QCE is lower in intercultural negotiation than in intracultural negotiation and that a higher degree of QCE leads to better negotiation outcomes. Moreover, we found evidence that the beneficial effects of higher QCE on negotiation outcomes are more pronounced in intercultural than in intracultural negotiations. We propose an agenda for future research and identify implications for practice.

International human resource management research:: an introduction to the field

The field of ‘international human resource management’ (IHRM) research has grown extensively over the last few decades. Since André Laurent in 1986 described the field as being in the infancy stage of development (Laurent, 1986), we have witnessed a rapid transformation of the field of IHRM research. The establishment in 1991 of the International Journal of Human Resource Management, that mostly publishes articles within IHRM, was an important milestone. For the first time there was a ‘home journal’ for scholars pursuing IHRM research. At the same time, a significant number of IHRM articles were published in prestigious management journals like Academy of Management Journal, Administrative Science Quarterly and Organization Science. The number of conferences and workshops dedicated to IHRM research has also increased. By the time this book is in print, the Eighth Conference on International Human Resource Management will have been held. While growing in size, the field has also expanded in scope. It has shifted from an early focus on the topic areas of top management attitudes and staffing decisions in multinational corporations (MNCs) (Edström & Galbraith, 1977; Perlmutter, 1969) and expatriate adjustment and performance (Torbiörn, 1982; Tung, 1981) to a field characterized by a high degree of diversity, cross-fertilization of ideas from different disciplines, and ambiguous delineations of what is included in the field and what is not. In this Handbook we define the field of IHRM broadly to cover all issues related to the management of people in an international context. Hence our definition of IHRM covers a wide range of human resource issues facing MNCs in different parts of their organizations. Additionally we include comparative analyses of HRM in different countries.

Intercultural competencies as antecedents of responsible global leadership

To date, little is known about the intercultural competencies that enable global leaders to effectively address CSR-related demands of global stakeholder communities. In order to explore this gap in the literature we empirically investigate several intercultural competencies and their influence on Responsible Global Leadership (RGL). In delineating the antecedents of RGL we studied three CSR decision-making approaches: the globally standardised, the locally adapted, and the transnational. We found that different competency configurations were related to each of the three approaches and that intercultural competencies are most critical for the utilisation of the transnational approach. Our study contributes to the CSR literature by delineating some of the antecedents of RGL, and to global leadership research by establishing the scope of intercultural competencies within the domains of CSR and stakeholder management.

Development of the cultural intelligence assessment

The construct of cultural intelligence has recently been introduced to the management literature as an individual difference that may predict effectiveness and a variety of interpersonal behavior in the global business environment. This construct has enormous potential in helping to explain effectiveness in cross-cultural interactions. However, progress has been limited by the adequacy of existing measures. In this chapter, we describe the development and preliminary validation of a web-based assessment of cultural intelligence based on our conceptualization of cultural intelligence.

The upside of cultural differences: Towards a more balanced treatment of culture in cross-cultural management research

Purpose The purpose of this paper is to encourage scholars to look at commonly considered phenomena in international business and cross-cultural research in new ways and to theorize and explore how cultural diversity, distance, and foreignness create value for global organizations. These considerations should result in a more balanced treatment of culture in cross-cultural management (CCM) research. Design/methodology/approach The idea that there are negative consequences associated with cultural differences is pervasive in hypotheses formulation and empirical testing in international business and CCM literature, as reflected in widely used constructs such as “cultural distance,” “cultural misfit,” “foreignness,” and related concepts. Consistent with a Positive Organizational Scholarship (POS) perspective on culture and cultural differences, the authors emphasize the positive role of distance and diversity across national, cultural, institutional, and organizational dimensions. In addition, they provide an overview of the contributions to the special issue. Findings Examining the positive side of culture is not only beneficial theoretically in terms of filling the existing gaps in the literature, but is also crucial for the practice of international and global business. Accordingly, the contributions to the special issue highlight how explicitly considering positive phenomena can help better understand when and how cultural diversity, distance, and foreignness can enhance organizational effectiveness and performance at multiple levels. They include five research papers, a Distinguished Scholar Essay by Kim Cameron, the Founder of the POS movement, and an interview piece with Richard Nisbett, a Pioneer Researcher in culture and cognition. Originality/value The overemphasis on adverse outcomes associated with cultural differences in existing research has hindered the understanding of the processes and conditions that help organizations leverage the benefits of cultural differences in a wide range of contexts. This introductory paper together with the contributions included in the special issue showcases the positive dynamics and outcomes associated with cultural differences, distance, and diversity in a wide range of international business contexts.