When cultures clash.
'What great product synergies,' noted the chairman of the U.S. firm in explaining the rationale of the merger to the business press.
Over the course of my lifetime, I have never heard anyone say, "This is a great fit of corporate cultures." Or, "Our engineers will love to work with theirs." One of the most interesting combinations to ponder is that of Daimler Benz-Chrysler - the authoritative German style of getting things done as compared to the consensus approach of U.S. companies. My own prediction is that this merger will have a lot of problems. At least three multi-company committees have already been formed to deal with the communication and language issues that might come up.
Those in the United States are, of course, aware of mergers. This has been part of their business culture for decades, but today we are seeing an increasing number of global mergers. And this time around U.S. firms are as much the mergee as the mergor. So a merger today has to overcome not only the usual corporate culture communication issues, but also a whole set of cultural and linguistic ones as well. The total amount Europeans spent on U.S. companies through September 1998 was three times the U.S. $38 billion spent in 1997. Total cross-border mergers came to $272 billion in 1997.
There is also the suspicion that a lot of the European-led acquisitions of U.S. firms had more to do with the executives of the European firms then being able to put themselves on an U.S. pay scale, now euphemistically called global pay. Consider that the chairman of Compaq Computer had $188 million in stock options, while the chairman of Daimler-Benz had only $1 million.
Even though research from Mercer Management Consulting stated that 50 percent of all mergers don't reach their objectives, some acquired employees are optimistic that they can work things out. When the Swedish Telecommunications giant Ericsson bought some of GTE's facilities, the U.S. employees of an acquired plant in Lynchburg, Va., took Swedish lessons. Others weren't so sure that the combined work force would learn each other's language. When OSARM, the German lighting giant, (it developed the technology to light up the MGM lion in Las Vegas, Nev.) bought the U.S. firm Sylvania, the German and U.S. engineers couldn't understand each other. So a system was worked out where each side wrote their e-mail in their own language, passed it through a machine translation system and enabled the employees on the other side of the water to read the e-mail in their own language.
Okay, the machine translation solved the linguistic issue, but what of the attitudinal? Fons Trompenours, author of "Riding the Waves of Culture," noted the chief problem in these global mergers lies in the differing emphasis upon individual and team effort. According to Trompenours, if an American wants to express something, he says, "They'll do it easily and they talk like hell." But the Germans sitting in the same meeting won't open their mouths.
Other cultures don't mix well in business, either. In Anglo-French mergers, their management meetings are a source of frustration. Low-level British managers have the authority to make a decision, while their French counterparts are usually obliged to report up the chain of command. And while the British take a pragmatic, step-by-step approach and move a project along quickly, the French prefer to wait until a comprehensive solution is worked out.
One merger that didn't happen was between SmithKline Beecham and the U.K.'s Glaxo-Wellcome. Glaxo was a freewheeling company while SmithKline was far more centralized, and the merger went nowhere. MCI British Telecom (BT) didn't happen because BT was perceived as "stuffy" by MCI, while MCI was perceived as "loud."
So when BT was looking to join up with AT&T, BT commissioned a cultural audit to see if the thing could work. The audit involved asking executives and other key employees what they thought of each other. In addition, a corporate analysis was conducted, examining productivity, financial remuneration and other forms of reward. And while a few cultural stereotypes were repeated, the chief executives did think that this merger would work.
General Motors decided it couldn't deal with these cultural issues anymore and decided to bring back its international headquarters from Zurich to Detroit. The time difference would no longer be an impediment to communication, nor would tensions over which language to use in the office.
Strategies to Survive, Maybe Even Succeed
Global mergers will continue for some noble and not-so-noble reasons, and still half of them will fail. Here are some strategies that communication professionals can try to make global mergers succeed.
1. Design a group to tackle communication issues. Develop a plan. This is often left out of the equation. Companies will spend a lot of time in figuring out how to combine manufacturing systems, but spend little time learning how to communicate both formally and informally.
Try to identify those problems that are solvable. Some things just can't be done. To quote rural people in Texas, "can't make dogs cats."
2. Develop a verbal identity. It is not enough to say the official language of the combined company is English. Every work place has its own language, its verbal identity, and someone should make the effort to document it, define it and put it in a glossary form for everyone to understand. If you don't do this, how is anyone in Italy going to understand what "line management" is?
Ford Motor Company found it had all sorts of problems just in English when it mixed British and U.S. automotive engineers together. The glossary of U.S. and British automotive terms shows the difficulties.
It always bothers me that U.S. firms often think that they will have more success in dealing with U.K. firms than in buying outside of the English-speaking world. I always like to recall the statistic used among international relocation firms - that the greatest amount of relocation failure is among U.S. executives sent to the United Kingdom. They assume because the language is similar that they should have a degree of success. This is not always true. They choose English as the merged company's main language, but they often forget that Europeans usually speak British English, which uses many words that differ from American English.
1. always suggest making a list of some 400 key management and manufacturing terms that define your business and then define them and translate them in the language of the mergor or mergee.
3. Do non-linear things to make a point. The dissonance was so bad after one global merger that the new president of the company had a suit made that was half blue and half green - the combined colors of the two companies. He wore it around the company for a month to show that he was impartial and respected both points of view.
4. Don't always assume that having sensitivity training is sufficient. This conventional wisdom seems to be that if you hire enough cultural trainers to come in to help pave way for the adjustments, everything will work out OK. Sure these types of prompters are useful, just don't give them the keys to the store in the process.
I Say Tomahto and You Say Tomayto
Accumulator Actuator Artic (articulated lorry) Bonnet Boot Choke tube Cubby box Damper Drive shaft Drop-head coupe Dynamo Estate car or shooting brake Fascia Fixed-head coupe Gear stick Gearbox Hood Lorry Monocoque Nave plate Prop shaft Quarterlight Rev counter Reversing lights Ring gear Saloon car Scuttle Silencer Sill Suction advance Sump
Battery Switch or servo A tractor-trailer Hood Trunk Venturi Glove box or glove compartment Shock absorber Half shaft or axle shaft Convertible version of 2-door coupe Generator Station wagon Dashboard 2-door coupe Gearshift, gear lever Transmission Convertible top Truck Unibody Hubcap Drive shaft Vent window Tachometer Back-up lights Flywheel gear or starter gear 2- or 4-door sedan Cowl Muffler Rocker panel Vacuum advance Oil pan
WHICH ENGLISH IS ENGLISH?
The conventional wisdom is that developing a verbal identity program is only useful if you work in languages other than English. But British English and American English technical terms are substantially different as the following list of publishing terminology shows:
U.S. accordion fold
U.K. concertina fold
a paper with two or more parallel creases
an article that is clipped, or cut out, from a publication
U.K. drawing pin
a small pin with a flat head
bottom of a page
a technician in a film laboratory who examines negatives to determine improper exposure or timing
a piece of paper or ribbon placed between the leaves of a book
typeset copy not used and retained for possible future use
John Freivalds is principal, jfa, Minneapolis, Minn.
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|Title Annotation:||global mergers|
|Article Type:||Cover Story|
|Date:||Oct 1, 1998|
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