The Influence Of Cross-cultural Factors On The Performance Of Overseas M&A Of Mineral Enterprises

This article first introduces that cross-border overseas mergers and acquisitions of Chinese companies have become a major trend so far.It is not only reflected that the number of cross-border mergers and acquisitions of Chinese enterprises is increasing,but also The scale and amount of M & A are also expanding。As far as the mineral industry is concerned,the Asian region has the hottset region of foreign direct investment by enterprises in my country’s mineral industry.Other industries,such as manufacturing,finance,and leasing,also prefer to invest in the Asian region.Whether it is geographically or culturally speaking,the Asian region is not far from my country,and it is the preference of Chinese companies’ overseas mergers and acquisitions location.my country’s continued demand for mineral resources in the future.China’s leadership is not only due to our strong consumption capacity of metal minerals,my country has the demand of mineral resources in the future,with strong consumption capacity of metal minerals,and the manufacturing industry has begun to transform and upgrade.The corresponding mineral resource demand structure and types have also undergone significant changes.Prompting my country to continuously invest abroad to obtain strategic resources,so overseas mergers and acquisitions in the mineral industry are also in full swing,cultural differences after mergers and acquisitions are inevitable.Cultural gaps hinder information communication,which will undoubtedly increase the "hidden costs" after mergers and acquisitions.Cultural differences and conflicts increase transaction and management costs,and even make transactions fail.Overseas mergers and acquisitions in the mining industry involve huge amounts of money and the mining industry are labor-intensive companies that often hire workers in local mines.After mergers and acquisitions,Chinese companies will further face the dilemma of cultural and institutional differences.The Chinese prefer to hire hard-working,competent and efficient employees.Local employees are more willing to choose jobs with higher salaries and better working conditions.From the perspective of foreign parties,Chinese companies are not flexible in management and it is easy to cause conflicts between local employees and the existing management system,which is not conducive to labor relations,and triggers local labor unions to organize strikes and causes economic losses to the company.The project construction of the mine involves the relocation and resettlement of local residents,and local residents attach importance to safety and environmental protection.However,similar cultures,such as languages with geographical attributes,can reduce management costs after mergers and acquisitions.Then this article selects Hofstede’s six cultural dimensions to index the gap between power distance,individualism and collectivism,uncertainty avoidance,masculinity,long-term orientation,and indulgence to measure cross-cultural factors,which is the cultural distance between the home country and the host country.The excessive gap between the cultural dimension index of the home country and the host country specifically reflects the difference in behavior of the employees between the home country and the host country,which in turn affects the management of the enterprise.By selecting the listed companies in China’s mineral industry as the research sample,the relationship between performance and cultural distance in overseas M&A,through empirical research,first it is found that cultural distance has a significant negative correlation with the M&A performance of listed companies in China’s mineral industry.Second according to the nature of the company’s ownership and the equity of the merger and acquisition,it is grouped to compare whether cultural distance has a significant impact on the merger performance of listed companies in the Chinese mineral industry.The results show that the cultural distance between state-owned enterprises and M&A equity of more than 50% in the mineral industry has a significant negative impact on M&A performance.Then taking Zijin Mining Group’s60% equity acquisition of Kyrgyzstan’s Altynken Company as an example.In the early stage after the merger,the company did not pay attention to the cultural distance between the country and the local area.After the cultural conflict,in order to solve the cultural dilemma,Zijin Mining Group attaches great importance to maintaining the relationship with the local community,promoting the the "Three Million Dollars" Plan,attaching importance to the integration of the human resources of the acquired company,and actively communicating with local labor unions.Afterwards,Altynken’s project progressed in an orderly manner.After completion,it was put into production,and the company’s performance gradually improved.Therefore,suggestions on how to reduce the cultural distance are made from the government’s macroscopic perspective and the corporate microscopic perspective.