What Part Does Cultural Compatibility Play in Determining The Success Essay

What Part Does Cultural Compatibility Play in Determining The Success of Cross-Border Mergers & Acquisitions - establish ExampleMost often, considerations in relation to financing and strategies have become the main concern in obtaining the acquisition targets or optical fusion partners that atomic number 18 most suitable for a companys purpose. Usually, decisions are made depending on certain issues such as availability, price and probable earnings. When their exertion fails, the analysis of merger ill or weak performance is often focused on the re-examination of certain factors that initiated the decision for pick (Schweiger & Goulet 2005). Often, poor selection decisions for mergers and acquisitions are associated with an overly high purchase price, incompetence of managers in achieving goals, or that the companies manifestly do not match each other. These factors have been continuously examined yet M & A activity has not obtained the necessary improvements (Teerikangas 200 7 Seo & Hill 2005). Because of this, international acquisitions make up inconsistencies despite the fact that business suffice and academic research have reported that many of these activities fail to achieve their objectives, cross-cultural acquisitions still expect to be a popular strategy for multinational companies. Therefore, it is necessary that the causes of international merger and acquisition failure are examined as well as the strategies for addressing such problems. As reported by Galpin & Herndon (2007), in a study of 190 top executives who were involved in the global acquisition, it was believed that cultural incompatibility was viewed as the superior barrier to the success of their M & A activities. Furthermore, the 1996 British Institute of Management survey reported that when concourse two cultures is underestimated, it becomes a significant factor for failure (Carleton and Lineberry 2004).