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Managing the Intercultural Issues in Automotive Industry Mergers and Acquisitions

Author

Listed:
  • Iulian WARTER

    (“Alexandru Ioan Cuza” University, Iaºi, Romania)

  • Liviu WARTER

    (“Alexandru Ioan Cuza” University, Iaºi, Romania)

Abstract

Mergers and acquisitions are a strategic choice to grow quicker, enter new markets and maximize companies’ capabilities which otherwise would not have been possible. Within the automotive industry this phenomenon has been seen repeatedly with examples like the Mitsubishi - Daimler, Jaguar - Ford, Daimler-Chrysler, Seat-Volkswagen, Daewoo-General Motors and Land Rover -Ford. Although M&A activity has trended directionally consistent with automotive assembly volume, there are some failure cases within automotive industry M&As (e.g. Rover-BMW). In this paper, the focus will be on the intercultural issues of the M&A phenomenon: attitudes, cultures, values, tradition etc. The underestimation of the cultural factors has significant impact on why M&A operations sometimes fail to achieve the predefined goals. It is of vital importance for the automotive companies to understand and be aware of these intercultural issues in order to be successful in their merger or acquisition. The understanding and awareness of cultural differences have to be built and developed in order to avoid cultural conflicts and clashes.

Suggested Citation

  • Iulian WARTER & Liviu WARTER, 2017. "Managing the Intercultural Issues in Automotive Industry Mergers and Acquisitions," North Economic Review, Technical University of Cluj Napoca, Department of Economics and Physics, vol. 1(1), pages 264-272, October.
    • Handle: RePEc:clj:noecrw:v:1:y:2017:i:1:p:264-272
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    References listed on IDEAS

    as
    1. Barmeyer, Christoph & Mayrhofer, Ulrike, 2008. "The contribution of intercultural management to the success of international mergers and acquisitions: An analysis of the EADS group," International Business Review, Elsevier, vol. 17(1), pages 28-38, February.
    2. Rongxing Guo, 2012. "Introduction to Intercultural Economics," SpringerBriefs in Economics, Springer, edition 127, number 978-3-642-29276-7, October.
    3. Christoph Barmeyer & Ulrike Mayrhofer, 2008. "The contribution of intercultural management to the success of international mergers and acquisitions: an analysis of the EADS group," Post-Print hal-00567737, HAL.
    4. Dumitru ZAIT & Liviu WARTER & Iulian WARTER, 2014. "Cross-Cultural Incentives For The Fdi," CrossCultural Management Journal, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 1, pages 209-221, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    mergers and acquisitions (M&As); intercultural; cultural differences; automotive industry;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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