The Linguist is a languages magazine for professional linguists, translators, interpreters, language professionals, language teachers, trainers, students and academics with articles on translation, interpreting, business, government, technology
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24 The Linguist DECEMBER 2014/JANUARY 2015 www.ciol.org.uk FEATURES Neil Payne shows why the success or failure of mergers and acquisitions can rest on the approach to culture A s the world becomes smaller, the role of linguists in translating cultures and facilitating cross-cultural initiatives is becoming ever more apparent. One exciting area in which linguists can add real value is that of international mergers and acquisitions (M&As). This potentially involves the challenge of merging two national cultures, as well as two company cultures. There are, of course, other factors which can determine success or failure, such as financial, structural and legal challenges. However, an indifferent attitude to culture can most certainly be detrimental and, at times, a deal breaker. The Daimler-Benz merger with Chrysler in 1998 is probably the most famous of all the international mergers that ended in failure. Indeed, it was this failed partnership that first drew analysts' attention to the importance of culture. The cultural gap in both national and corporate cultures was one of the main reasons for the failure. Daimler was a German company that could be described as 'conservative, efficient and safe' (manifestations of German cultural values); Chrysler was known as being 'daring, diverse and creating' (American cultural values). These cultural or value-based differences caused major issues. Daimler was a hierarchical company with a clear chain of command and respect for authority, while Chrysler favoured a more team-oriented and egalitarian approach. Daimler valued reliability and achieving the highest levels of quality; Chrysler was placing its bets on catchy designs and offering cars for competitive prices. These factors resulted in conflicting priorities and goals, and in different departments heading in opposing directions. Trust also became a huge issue. Employees on both sides felt reluctant to work with each other. This was mainly caused by a realisation that the agreed term 'merger of the equals' was far from the reality on the ground. During the initial stages of organisational integration, huge numbers of Chrysler's key executives either resigned or were replaced by German counterparts. Moreover, Daimler was much more imposing and tried to dictate the terms on which the new company should work. Such a situation did not inspire trust among Chrysler's employees and caused some serious communication challenges. The lack of common ground resulted in communication failures which, in turn, caused a sharp reduction in productivity. Share prices plummeted. The merger was a disaster. Usually, it is extremely difficult to pinpoint exactly what role culture played in the success or failure of a merger or acquisition, but in the case of Daimler-Chrysler, analysts agree that cultural factors were among the crucial ones that determined the downfall of the new entity. Acquisition failure After the collapse of Lehman Brothers in 2008 there were a number of companies eager to acquire parts of it – among them the Japanese company Nomura, which wanted the firm's Asian branches. The project had a lot of potential for both sides. Key players from Lehman Brothers could retain jobs and work in one of the biggest Asian financial companies, while Nomura would have another shot at fulfilling their dream of going global. However, culture got in the way. Analysts believe that there were a number of reasons for the failure. On a macro level there were differences in national cultures and corporate values. Lehmanites were accustomed to a very aggressive, risk-taking and quick decision-making way of Merger of cultures XYMOX, 'C HRYSLER OF GOTHAM', 10/9/05 VIA FLICKR (CC BY-NC-ND 2.0)