"Cooperation is beneficial to both sides, and fighting is harmful to both sides." - After the merger and reorganization of listed companies, is cultural integration an art or a hard adjustment?
Corporate mergers and reorganizations are a game of capital and resources, and even more a contest of culture and management. In the capital market, there are countless companies that have successfully acquired, but only a few have truly achieved long-term stable growth. The core of the problem is often not finance, law, or technology, but cultural integration!
In his long-term research on mergers and acquisitions, Goheal found that many companies adopted completely different management strategies after mergers and acquisitions: some chose to go with the flow, deeply integrate culture, and achieve a soft landing; others took strong measures and made hard adjustments, trying to use "unified rules" to transform the acquired party. So, which method is more effective?
Today, we will use two classic cases to dismantle the advantages and disadvantages of cultural integration and hard adjustments, and provide entrepreneurs with the best merger and acquisition management strategy.
Cultural integration school: Boiling frogs in warm water, moistening things silently? ——Geely acquires Volvo
“He who gets talent gets the world, and he who gets culture gets the future.”
When Geely decided to acquire Volvo, the market was full of doubts: How can a Chinese local car company control a European luxury brand with a century-old history? Cultural conflicts, management frictions, and differences in market perceptions all make this merger seem difficult.
However, the secret of Geely's success lies in cultural integration, not forced transformation!
How to achieve cultural integration?
1. Respect Volvo's brand independence: Geely did not forcibly intervene in Volvo's management, but retained the Swedish headquarters and allowed Volvo to operate independently.
2. Integrate the global management team: Geely formed an international board of directors, allowing Chinese and Swedish executives to make decisions together.
3. Adhere to long-termism and respect Volvo's engineering culture: Geely did not let Volvo cater to the "fast-moving consumer model" of the Chinese market, but respected its tradition of safety and quality first, and finally won the trust of consumers.
The result? Volvo was not only not weakened, but rejuvenated, with sales and profits increasing significantly, becoming a dark horse in the luxury brand market!
Goheal believes that Geely's success lies in its view of cultural integration as an "evolutionary" process rather than "transformation" or "replacement."
Hard adjustment faction: Cutting the Gordian knot quickly, but "disabling one's own skills" in the end? -- BenQ acquires Siemens
"Sharpening the knife does not delay the chopping of wood, but rushing for success will delay the work."
In 2005, Taiwan's BenQ acquired the mobile phone business of Germany's Siemens. The cultures of the two companies are very different:
1. BenQ is accustomed to "fast culture", emphasizing efficiency and flexibility.
2. Siemens advocates "slow culture", emphasizing stability and excellence.
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BenQ chose the most direct way - hard adjustment, trying to completely transform Siemens with its own management model.
What was the result?
1. The management style was not suitable for local conditions: BenQ asked Siemens employees to speed up the pace of product development, but German engineers were accustomed to "slow work and fine work", and the two sides had constant friction.
2. Cultural conflict leads to talent loss: BenQ's management style caused Siemens executives to resign on a large scale, and the talent gap problem became more serious.
3. Market positioning is confused and brand value is declining: BenQ pushed its own brand of mobile phone design concept, ignoring Siemens' original high-end image, resulting in a rapid decline in market share.
In the end, BenQ's mobile phone business lost nearly 1 billion euros in just two years and was forced to announce its withdrawal from the market.
Goheal believes that BenQ's failure was not due to financial or strategic mistakes, but because of the internal collapse caused by "forced cultural transformation".
Cultural integration or hard adjustment? How to find the best strategy?
In the management process of corporate mergers and acquisitions, we need to think deeply: Should we choose "silent" cultural integration or "vigorous" hard adjustment?
Goheal summarizes the following three key strategies to help companies find the best solution:
1. Diagnosis first, then action: cultural assessment is the first step
Before mergers and acquisitions, companies need to do more than just financial due diligence, but also cultural due diligence to understand the differences in management styles and core values of both parties.
2. Mixed management model, not black and white
Cultural integration does not mean complete laissez-faire and passive adaptation, but adjustment in integration and integration in adjustment. For example, you can remain independent at the technical level, but gradually unify in human resources and brand marketing.
3. People-centered, establish a common vision
The ultimate goal of mergers and acquisitions is to create value, and value creation is inseparable from talent. Therefore, companies should establish a cross-cultural management team as soon as possible, formulate incentive mechanisms, ensure that talents are willing to stay, and jointly promote the development of the company.
Cultural integration is evolution, not revolution!
The management of listed companies after mergers and acquisitions is not only the transfer of assets, but also a cultural confrontation. Geely's success is the victory of cultural integration; BenQ's failure is a lesson from hard adjustment.
So, in the future M&A market, do you think "cultural integration" is more advantageous, or "hard adjustment" is more effective? What other corporate M&A cases impressed you?
Welcome to leave a message in the comment area to discuss and explore the best management strategy after corporate mergers and acquisitions!
[About Goheal] American Goheal M&A Group is a leading investment holding company focusing on global mergers and acquisitions. It has deep roots in the three core business areas of acquisition of controlling rights of listed companies, mergers and acquisitions of listed companies, and capital operations of listed companies. With its profound professional strength and rich experience, it provides companies with full life cycle services from mergers and acquisitions to restructuring and capital operations, aiming to maximize corporate value and achieve long-term benefit growth.
