Post-Investment Monitoring. Intercultural Synergy Valuation

Liviu Warter, PhD
Center for Socio-Economic Studies and Multiculturalism, Iasi, Romania

Series: Business Issues, Competition and Entrepreneurship
BISAC: BUS036000

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This monograph is focused on post-investment issues, particularly on intercultural synergy, and M&A performance.

The M&A reasons are the result of globalization, of the need of growth and of achieving synergies. Most of the professionals consider that M&A is one of the most significant business phenomena in the past decades, but warn about the dangers of M&A.

The most challenging part of the M&A process is the integration of two entities that present different organizational and national cultures. This monograph emphasizes the relationship between culture, post-merger integration processes, and M&A performance.

This monograph exerts to find an explanation for M&A performance in terms of the impact that cultural differences have on the post-merger integration process. It emphasizes the role of post-investment monitoring and intercultural synergies achievement.

This monograph offers an extensive insight of the M&A process inasmuch as M&As are a complex domain demanding an interdisciplinary approach.

This book is seeking to deepen the apprehension of the impact of cultural differences on M&A performance.

M&A performance can be characterized by ambiguity of the concept and a lack of concurrence on measurement procedures.

This monograph reveals that cultural synergy can be produced by similarities in organizations but at once by differences. The empirical results deliver contradictory outcomes. Intercultural synergy might be highly significant after the merger or on the contrary have an insignificant effect on firms’ performance or even a negative impact. The findings regarding the cross-cultural integration aspects are contradictory and the relation between M&A performance and intercultural synergy is still to be refined.

The findings of this book suggest that intercultural synergy is a significant and controversial issue of cross border M&As. Some inconsistent results suggest the need for further research on post-merger integration.

The main goal of this book is to uncover intercultural issues that managers encountered during the post-investment phase and they should have discovered during the pre-investment phase. Intercultural synergy has a strong impact on M&A. Both national and organizational cultures are determinants for maximizing the intercultural synergy.

This monograph integrates the research on national, organizational and professional culture, into a theory of M&A performance and outcome. It investigates not only the outcomes and intercultural synergy but also the perception on these issues.

In the area of intercultural management, this book reveals that the culture clusters make for a very helpful and strong tool. It appears that national culture might influence perceptions on M&A in some culture clusters much more than in others.

M&A professionals may benefit from a deeper understanding of cultural values that shape the post-merger integration process and implicitly the M&A performance. The companies that minimize the importance of post-investment monitoring expose themselves to a higher risk of failure.

The expectation of the author of this monograph is that the conclusions would help forewarn M&A scholars and practitioners of the need to thoroughly understand the cultural issues influencing the post-M&A processes.

This monograph will be useful for academic researchers, postgraduate students, for MBA/Executive Education and for practitioners.
(Imprint: Nova)

Chapter 1. Introduction

Chapter 2. Mergers and Acquisitions

Chapter 3. The Significance of Post-Investment Phase

Chapter 4. Intercultural Synergy

Chapter 5. Research Approach

Chapter 6. The Nine Dimensions Model of the Post-M&A Stage

Chapter 7. Cultural Differences and Synergy Effects

Chapter 8. Cultural Differences and M&A’s Outcomes

Chapter 9. Perception on the M&A integration Process and Outcome

Chapter 10. Conclusions

Chapter 11. References

Chapter 12. Appendix – Questionnaire

Chapter 13. List of Abbreviations

"Dr. Liviu Warter provides us with an original, fascinating approach to understanding the importance of focusing on intercultural synergy in post-investment monitoring." - Hershey H. Friedman, Professor, PhD, Department of Business Management, City University of New York, USA

"The most challenging part of the M&A process is the integration of two entities that present different organizational and national cultures. This book by Liviu Warter is showing empirical research data on the relationship between culture, post-merger integration processes, and M&A performance. Particularly on intercultural synergy Dr. Warter says: “In lieu of asking if cultural differences have an impact on performance, researchers should concentrate on how cultural differences affect M&A performance.” Intercultural synergy is the mixture of diverse cultural elements like traditions, values, norms, practices, behaviors etc. in such a way that the result is a construction of higher value than the sum of elements.

This book exerts to find an explanation for M&A performance in terms of the impact that cultural differences have on the post-merger integration process. It emphasizes the role of post-investment monitoring and intercultural synergies achievement.

Generically, M&A researchers have concentrated independently on pre-acquisition and post-acquisition influential factors. Almost all conclude that cultural influences are important in M&A. Despite this, this study reveals the underestimation of the role of cultural integration in M&A literature.

Many scholars have stated that is difficult to analyze post-merger integration although the integration phase is critical due to the significant cultural differences of the two different organizations. There are irresolute evidences on how integration is accomplished. The influence of cultural differences is sometimes antithetical.

Culture is frequently described as an obstacle to the success of M&A’s. But an understanding of cultural differences can work out be positively by enabling access to the partner’s routines and repertoires embedded in national culture.

The concept of “intercultural synergy” is still poorly understood despite a growing body of research on synergy creation. Generically, there is an inadequate practical approach although most scholars highlight the importance of intercultural synergy in M&A. To sum up, these findings suggest that intercultural synergy is a significant issue of post-merger integration processes, and M&A performance." - Huib Wursten, Drs., Culture expert, Former co-owner of ITIM International, Associated with the Hofstede Insights Group, Netherlands

"Mergers and acquisitions become a common phenomenon in modern business. Practically there is no a day without an announcement of the new transaction, regardless of the sector, country or size of the company. One should mention, however, that vast majority of such transactions fail. One of the reasons are the problems at the integration stage in which the strategic and value-creating aims have to be realized by the integration of the acquired company. Given these facts, this monograph analyses in details intercultural synergy valuation in merger and acquisition transactions.

This work should be classified as an interesting book in the field of strategic management. It presents a good scientific level, supported by the latest and very rich world literature. In addition, it is characterized by a high application value and should therefore be designed for a wide group of recipients, including scholars, managers, and students of management science." - Włodzimierz Sroka, Associate Professor of Strategic Management, WSB University, Dąbrowa Górnicza, Poland

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