Case 4: Japanese Cross-Border M & A and German Target Employee Alienation Issues

Mergers and acquisitions (M & A) occur frequently all over the world and about 70% are categorized as cross-border deals with the aim of multinational firms to undertake investments in foreign countries (Peng, Global business. Cengage Learning/South Western, Mason, 2008). There is evidence that cross-border deals are more difficult to successfully realize than domestic deals because employees not only experience a different organizational culture but also have to interact with a different national culture (Chung et al., J World Bus 49:78–86, 2014). The rule of thumb is that integrations become increasingly difficult as cultural distance and differences increase between the bidder and the target in a M & A context. Most of the studies take it for granted that employees are heavily affected by direct involvement in a cross-border acquisition (e.g., Chung et al., J World Bus 49:78–86, 2014; Nemanich, Keller, Leadersh Q 18:49–68, 2007). Yet, indirect effects of social identification can also affect the lack of direct interaction between employees from both parties (the acquirer and the acquired). This case study deals about a Japanese steelmaker who overtook a German engineering firm specializing in waste disposal business. Challenges in the post-merger integration and especially between the expatriated Japanese managers to the German subsidiary and the German employees are discussed.