Managing International M&A With Cultural Perspective For Chinese Enterprises

Chinese enterprises have involved in $31.1 billion international transactions as of May 27, more than the total of 2007, and the pace shows no sign of slowing. The imperativeness to research on Chinese enterprises'international M&A is in stark contrast to the fact most papers are confined to western countries M&A and mainly from a financial perspective. This paper tries to provide Chinese enterprises with a comprehensive model to successfully close an international M&A deal, and especially with a cultural perspective. The main body of the paper can be divided into three major parts: the first part is for introduction purpose, this part gives us a systematic framework of M&A in general by introducing its definition, type, history, motives and factors influencing M&A's results. It is followed by an overview of Chinese enterprises'international M&A, an analysis of Chinese enterprises IMA( International Merger & Acquisition) motives and characteristics. The second part mainly provides an incorporated success model, this part outlines the importance of balanced management of hard and soft key success factors, combining the economic logic of corporate performance and human capital through an integrated approach to mergers and acquisitions. This balanced hard and soft success factors model is based on the research result of Andrej Bertoncelj1 and Darko Kova?'s, even though these factors differ in their importance for individual companies, they are all considered essential to increasing the success rate of corporate combinations. It is followed by giving a Chinese enterprises'IMA risk profile, which accentuates the cultural risk factor.The third part offers cultural perspectives to navigate through risk-fraught international M&As, after admitting the importance of an incorporated comprehensive success model to handle M&A successfully and a simple scenario of Chinese enterprises success risk factors, the following of the paper is trying to provide detailed cultural perspectives for Chinese enterprises to pay special attention to during the 3 stages of combination: pre-combination, legal combination and post-combination. The paper highlights cultural due diligence in the pre-combination evaluation process, and different levels of integration and integration approaches in the post-combination integration process. Nevertheless, regarding the effect of the combination of national and corporate culture in these operations the existing empirical evidence does not point in a unifying direction. In some cases national and corporate distance actually seem to enhance combination performance. The integration part finally suggests a solution for the conflicting results of empirical studies about the effect of culture clash on the success of international and domestic M&A. The framework provides ample opportunity for systematic research on the relationship between cultural dimensions and the way in which integration approaches fit cultural differences.