Today I was reading in the Financial Times a piece about the Lenovo acquisition of IBM's PC business. The piece was timely as I'm just in the middle of writing a section of the book on the organizational culture implications of acquisitions. Additionally I am a ThinkPad user and my current one (bought in 2007) has logos of both IBM and Lenovo so I have a certain amount of interest in the well being of the organization – particularly in terms of its customer support services.
The FT article didn't say much about the cultural implications of the acquisition, but I imagined that they would have been significant at the time and are probably still a 'work in progress'. This thought led me to a bit of investigation and I came across a useful, in-depth, article from Asia Times Online written at the time of the merger (announced 8 December 2004, completed 1 May 2005) which
raises the tricky human resource issues. Lenovo is a Chinese company, where a mandatory break for exercise at noon is part of the corporate culture. Expat Americans working with IBM have tended to describe the acquisition among themselves as a "Niagara Falls of tears". The cultural differences apart, this staff would have to draw Chinese salaries in the new company as Lenovo imposes "local hire" conditions on them in place of the dollar salaries they were drawing till now. This staff also cannot apply for IBM jobs since they are banned from doing so under the terms of the sell-off agreement.
Getting deeper into the digging I found an excellent presentation given to the EIASM Workshop on International Strategy and Cross-Cultural Management, Helsinki, September 24-26 2009, called How, Where and Why Culture Matters in Mergers and Acquisitions: A Research Synthesis and Agenda for Future Research and presented by Günter K. Stahl, WU Vienna and INSEAD. It mentioned the Lenovo acquisition of IBM calling it "A marriage across 12 time zones" with some snippets of information apparently drawn from an INSEAD case study of that name that I'd love to get.
Two points stood out for me on reading the presentation:
• Cultural differences (in acquisitions) present a "double-edged sword" – they may be positively or negatively associated with M&A performance, depending on contingencies such as the degree of relatedness and integration design.
• Issues (around mergers and acquisitions) that deserve more research attention include:
– the temporal dynamics of the sociocultural integration process;
– the role of context in shaping the performance effects of cultural differences;
– how differences in culture facilitate or undermine the transfer of capabilities, resource sharing and learning.
The final page of the presentation promoted Stahl's book Mergers and Acquisitions: Managing Culture and Human Resources. Günter K. Stahl and Mark E. Mendenhall – wish is now added to my Amazon wish list (currently standing at 231 items!)