access to the target’s and/or the acquirer’s diverse set of routines and repertoires
embedded in national culture. Very et al. (1996), in a study of acculturative
stress in European cross-border M&A, found that cultural differences elicited
perceptions of attraction rather than stress, depending on the nationalities of
the buying and acquiring firms. Consistent with the findings of Morosini et al.
(1998) and Larsson and Risberg (1998), they concluded that the cultural prob-
lems associated with integrating M&A may be more amplified in domestic,
rather than cross-national settings. ‘Acculturative stress is a complex phenom-
enon, sometimes influenced by cultural differences, but not necessarily in the
expected direction’ (p. 103).
Thus, the cultural distance hypothesis provides too simplified a view of the
cultural processes involved in integrating merging firms. Whether cultural differ-
ences have a positive or negative impact on M&A performance will probably
depend on the nature and extent of the cultural differences, the interventions
chosen to manage these differences, and the integration approach taken. This
conclusion is also supported by studies that found evidence that the success rate
of cross-border M&A may be higher than for domestic transactions (Bleeke et al.,
1993; Bühner, 1991; KPMG, 1999). According to Evans et al. (2002), the main rea-
son is that cross-border acquirers buy companies in familiar businesses to which
they can add value. They also execute multiple acquisitions, not one-of-a-kind
deals, learning from mistakes and accumulating experience, putting in place
processes that enable them to execute cross-border deals more and more effec-
tively. Further, cross-border acquirers tend to pay greater attention to the ‘softer’,
less tangible but critical cultural issues and HR aspects of M&A management.
Finally, Evans et al. (2002) have observed that cross-border M&A promote some
convergence in HRM policies and practices towards accepted ‘best practice’, such
as performance-related compensation and team-based work organization.
In summary, there is evidence that cross-border M&A, under some cir-
cumstances at least, can be more successful than domestic combinations, and
that the inherent cultural differences in cross-border M&A can be an asset
rather than a liability. Consistent with a ‘process perspective’ on acquisitions
(Haspeslagh and Jemison, 1991; Hunt, 1990; Jemison and Sitkin, 1986), the
literature review suggests that M&A outcomes depend heavily on the strategic
logic behind the merger and the management of the integration process, as dis-
cussed in the next two sections.
3 WHAT DOES INTEGRATION MEAN?
The concept of ‘integration’ has different meanings in a merger or acquisition,
and a fundamental issue is to understand what is the strategic logic behind a
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