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International M&Asand

Cross Cultural Conflict

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Why Bother?

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-65% of International Mergers Fail-58% of all Mergers Fail-Unresolved Conflicts Decrease Motivation and Performance-Unresolved Conflicts Increase Frustration and Fluctuation Rates

Why Bother?

„Mergers fail because the people who do them are not really on top of the details of putting them together. It is like putting an engine on a car. If you don’t connect it right, the car is not going to move”

Sanford Weill, Chairman of Citygroup

Alexander Consulting EnterpriseAlexander Consulting Enterprise 04/18/2304/18/23

„Mergers fail because the people who do them are not really on top of the details of putting them together. It is like putting an engine on a car. If you don’t connect it right, the car is not going to move”

Sanford Weill, Chairman of Citygroup

Alexander Consulting EnterpriseAlexander Consulting Enterprise 04/18/2304/18/23

Integration and Potential for ConflictP

oten

tial F

or C

onfl

ict

Syn

ergy

Eff

ects

Low

Low

High

High

Integration

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1. Ethnocentric Approach2. Relativistic Approach3. Compromise

Cross Cultural Conflict Resolution

Each approach is unsystematic and does not necessarily lead to a desired outcome

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Conflict Resolution

1. Observe Difference / Conflict2. Why are we doing the things the way we do?

Why are the others doing the things the way they do?

3. Analyze ConflictI. Conflict of InterestII. Conflict of Factual AssessmentIII. Conflict of GoalsIV. Value Conflict

4. Come up with Resolution depending on Type of Conflict and Specifics of Situation

Role of Culture

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Conflict Resolution

Specifics of Situation:- What is at stake?- How critical is time?- How important is it to have everybody on board?

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Conflict Resolution

Types of Conflict Resolution:- Authoritative / Explanative- Compromise / Negotiate- Dialogue

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Conflict Resolution

AA D/CD/C D/AD/A AA

A/DA/D D/CD/C DD A/CA/C

A/DA/D CC DD A/CA/C

Imp

orta

nce

of

Con

flic

t R

esol

uti

on

High

Medium

Low

Type of Conflict

Conflict

of Inter

est

Value C

onflict

Conflict

of Goals

Conflict

of Fac

tual

Assessm

ent

A = Authoritative / Explanative

C= Compromise / Negotiate

D = Dialogue

Nill, Alexander (1999). “Kommunikatives Konfliktmanagement in International Diversifizierten Unternehmen.” In: Die Zukunft der diversifizierten Unternehmung, eds. Hans Hinterhuber München: Franz Vahlen Verlag.