Research On Cultural Integration Speed And Model Selection In Cross-border M&As Of Chinese Private Enterprises

As the development of the globalization and the increasing of China’s economicstrength, the enterprises in China are not going to have competition only in local market,but also eager to explore the market overseas. Formerly, Chinese enterprises intended toinvest in developing countries, but right now, they start to aim at the developed countries bycross-border mergers and acquisitions to achieve the brand, core technology and globalmarket they wanted.There is a famous saying about cross-border mergers and acquisitions that70%ofcross-border mergers and acquisitions activities cannot achieve the goal they expected，and the failure were caused70%by the unsuccessful cultural integration. Because of theinsufficient experience on cross-border mergers and acquisitions, the enterprises in Chinanormally focus on the feasibility in strategy and finance area, regardless the cultureelements. Therefore, during the implementation process, the final result is far away fromthe theoretical solution.Based on the socialist market economy with Chinese characteristics, the enterprisesare divided into two segments: state-owned enterprise and private enterprise. They havesignificant variation not only in size and nature, but also in political and economic problemsthey faced when they are going to have cross-border mergers and acquisitions. Therefore, itis unscientific and irrational to put them together when we discuss about cross-bordermergers and acquisitions. This dissertation specially emphasizes from the view of privateenterprise to solve the three main questions they will meet when they have cross-bordermergers and acquisitions.Question1: If the target enterprise is suitable to merge or acquire? This thesis willanalyze from the national culture, commercial culture and enterprise culture in differentlayers: core layer, interlayer and surface layer to show the typical elements they will meetin cross-border mergers and acquisitions. After that, we try to discover the potential resultswhen different enterprise cultures getting together in order to help the decision maker tojudge the feasibility of cross-border mergers and acquisitions.Question2: How to control the speed during the whole cultural integration process? This article breaks up the whole culture integration process into three procedures based onthe classical model of Kurt Lewin: unfreeze, move and refreeze. Then we will calculate therisks and benefits of cultural diversity to figure out the best option for different procedures.Question3: What is the best cultural integration model for private enterprises? Herewe select mutual acceptance extent in culture as the object of study. Then we can get anintegration model with nine different types. Because the condition for mutual acceptanceextent is changing all the time, our private enterprises have to adopt the appropriateselection in the dynamic situation.At last, this dissertation conducts a typical case: Sany and Putzmeister, to prove thefeasibility of our theoretical conclusion.