International Human Resource Management-MJ Version

resemble the culture of the acquired firm. What happened? When the two
companies merged, it was easier for everyone to adopt the explicit and trans-
parent systems of the British firm which are more suitable for cross-border busi-
ness, than to emulate the more ambiguous and subtle rules embedded in the
French organization. If the practices of the company that has been acquired are
more clear and transparent, it is quite possible that they will prevail.

Best of both

The intriguing option is the ‘best of both’, often described as a ‘merger of
equals’. This holds out the promise of no pain since in theory it takes the best
practices from both sides and integrates them. There are, however, very few
examples of such mergers that have succeeded since it is very difficult to do.
The strength of a culture comes from the internal consistency of the practices,
which may not be there when the ‘best’ parts are put together. Another danger
in the ‘best of both’ integration process is that it may become too political and
time consuming. Who decides what is ‘best’?
The process of making the decisions can be very complex. If both compa-
nies declare that the merger is one of equals, does that mean that top manage-
ment is split 50/50, even if in terms of excellence the real split is 80/20? The
controversy surrounding the Daimler/Chrysler merger is a visible example of
this frequent dilemma. Without strong mutual respect for the knowledge and
skills of each company, this kind of strategy will not work.
The key to success is the fairness of the process. The test of the ‘best of
both’ approach may be the ability to retain the people who do not get the top
jobs. Having similar cultures helps. The AstraZeneca and Exxon/Mobil mergers
have proceeded relatively smoothly because the similarities were more pro-
nounced than the differences. The new groups have been relatively successful
at identifying the best practices from each side, as well as having a balance of
top management from the two firms.

Transformation

In contrast with ‘best of both’ acquisitions that take the existing cultures as
they are, both companies in a transformation merger are hoping to use the
merger to break sharply with the past. Merger or acquisition can be the catalyst
for trying to do things differently, to reinvent oneself. This can involve the way
in which the company is run, what business it is in, or both. When Novartis
was created by the merger of two Swiss-based pharmaceutical firms, the pro-
posed management style for the new company reflected the desired transfor-
mation: ‘We will listen more than Sandoz, but decide more than Ciba.’
This kind of merger is obviously the most complex and most difficult to
implement. It requires full commitment, with focus and strong leadership at

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