Abstract
This thesis employs Hofstede's theory of cultural dimensions and takes Lenovo acquisition of IBM as an example to study the influences made after cross-border mergers and acquisitions by the cultural differences between China and the United States.
With the rapid development of Chinese economy, the strength of Chinese enterprises also increases quickly. They have the ability and demand to participate in international competition. Undoubtedly among the many ways leading to the international market the acquisition of foreign well-known enterprises is a great shortcut. In this way, Chinese enterprise can not only learn advanced expertise but also absorb their excellent corporate cultures. However, Chinese enterprises had suffered a lot in the process of cultural integration after the acquisition. Most of the reasons are that their corporate cultures can not be reconciled with each other, thus leading to an unsatisfactory result. Therefore, what kind of cultural differences affect the result in the cross-border mergers and acquisitions business (M&A)? How can these Chinese enterprises deal with these cultural differences?
This thesis first describes the background of Lenovo’s acquisition of IBM and then analyzes cultural differences between China and the U.S. from the perspective of Hofstede's culture dimensions, mainly focusing on the two dimensions of individualism/collectivism and power distance. The dimension of individualism/collectivism influences the managerial style and modes of communication of the two companies. And the dimension of power distance makes the decision making system and scope of the power different. Finally, it provides some recommendations for overseas M&A of Chinese enterprises in the future, such as make an in-depth study before the acquisition, strengthen mutual understanding, eliminate communication barriers after the merger and establish a common goal.
Key words: cross-border M&A, individualism/collectivism, power distance, management
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