ArcelorMittal Merger
The cultural side of one
of the biggest deals in
the steel industry
Team Members:
Petr Boros
Luke Far...
Agenda
 The Team
 The Process
 The Video
 The Theory
 Managerial Lessons
 Conclusion
Team Process Video Theory Manag...
Arcelor, Mittal & Cross Cultural
Consulting
Emmanuel de Croy,
Consultant from
Cross Cultural
Consulting
Lubomila
Jordanova...
The Process
Interview with a PhD candidate examining the
cultural differences between France & India
Interviews with Frenc...
The Video – Rationale for
Choice
• Merger discussions between two
steel producers, Arcelor (France)
& Mittal (India)
• Foc...
Cultural Dimentions Considered in
Video
Individualism
vs
Collectivism
Relationship
Orientation
Uncertainty
Avoidance
Power...
VIDEO!
Team Process Video Theory Managerial
Lessons
Which cultural dimensions can you
identify?
Team Process Video Theory Managerial
Lessons
Seven cultural differences between France and
India
France India
Uncertainty avoidance
• Try to control the future
• Intol...
Seven cultural differences between France and
India
France India
Individualism
• Individuals are expected to take care
onl...
What went wrong?
Team Process Video Theory Managerial
Lessons
Long-Term versus Short-Term
View Opposition
• Leads to disag...
What went wrong?
Team Process Video Theory Managerial
Lessons
Uncertainty avoidance
• Different views on what to
do with a...
What went wrong?
Team Process Video Theory Managerial
Lessons
Cultural context
Although smooth meeting,
different percepti...
General Learning Points for
Managers
Source: Marks & Mirvis ,1998; Hofstede, 1980; Forbes, 2013, Chakrabarti et al., 2009....
Thank you!
“It is never too late to give up your prejudices”
―Henry David Thoreau
Questions?
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Cross Cultural Management - M&A - India & France

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  • http://www.youtube.com/watch?v=Kme21wTEwuA&feature=youtu.be
  • Cross Cultural Management - M&A - India & France

    1. 1. ArcelorMittal Merger The cultural side of one of the biggest deals in the steel industry Team Members: Petr Boros Luke Farrelly Tanguy Bocquet Emmanuel de Croy Evelyne Hemstedt Lubomila Jordanova 17th of March, 2014 ID419 Cross Cultural Management
    2. 2. Agenda  The Team  The Process  The Video  The Theory  Managerial Lessons  Conclusion Team Process Video Theory Managerial Lessons
    3. 3. Arcelor, Mittal & Cross Cultural Consulting Emmanuel de Croy, Consultant from Cross Cultural Consulting Lubomila Jordanova, Consultant from Cross Cultural Consulting Unnikrishnan Paramekkavil, financial managers of Mittal Francois Simon, Vice-President of Arcelor Abishek Mukopadhyay, Vice-President of Mittal Sylvie Thomas, Strategic Manager of Arcelor Team Process Video Theory Managerial Lessons
    4. 4. The Process Interview with a PhD candidate examining the cultural differences between France & India Interviews with French students based in India Interviews with Indian students based in France Theory that covers the two countries and differences between them Team Process Video Theory Managerial Lessons
    5. 5. The Video – Rationale for Choice • Merger discussions between two steel producers, Arcelor (France) & Mittal (India) • Focus on scenes that expose differences in cultural perceptions in the 2 countries • Reasons for choosing this case – Suprisingly little theory on the Franco-Indian relationship from a cultural perspective – France - 2nd strongest economy of Europe, strong culture – India - emerging might in the new economic realityTeam Process Video Theory Managerial Lessons
    6. 6. Cultural Dimentions Considered in Video Individualism vs Collectivism Relationship Orientation Uncertainty Avoidance Power Distance Time Orientation Punctuality Cultural Context Team Process Video Theory Managerial Lessons
    7. 7. VIDEO! Team Process Video Theory Managerial Lessons
    8. 8. Which cultural dimensions can you identify? Team Process Video Theory Managerial Lessons
    9. 9. Seven cultural differences between France and India France India Uncertainty avoidance • Try to control the future • Intolerant to unorthodox behaviour and ideas Uncertainty tolerance • Tend to let things happen • Relaxed attitude, practice counts more than principles Short-term oriented • Rewards immediate results • Respects traditional approaches Long-term oriented • Attaches more importance to the future • Foster pragmatic values Punctuality • Being on time is crucial • Strict respect of working and non- working hours Non-punctual • Arrive when possible • Time is continuous, no difference between today and tomorrow Femininity • Stronger focus on relationships and collaboration Masculinity • More competitive and performance oriented Team Process Video Theory Managerial Lessons Source: Geert Hofstede Cultural Dimensions (1991), Steelcase Culture Code, Solomon and Schell: Managing Across Cultures (2009)
    10. 10. Seven cultural differences between France and India France India Individualism • Individuals are expected to take care only of themselves and their immediate families Collectivism • Individuals are very concerned with the well-being of the larger group rather than their own Lower power distance • Less hierarchical, decisions can be taken at different levels Higher power distance • More hierarchical, everyone can participate in the decision-making process but the decision is eventually taken at the highest level Lower cultural context • Tend to be direct when dealing with others Higher cultural context • Tend to be more indirect and vague Team Process Video Theory Managerial Lessons Source: Geert Hofstede Cultural Dimensions (1991), Steelcase Culture Code, Solomon and Schell: Managing Across Cultures (2009)
    11. 11. What went wrong? Team Process Video Theory Managerial Lessons Long-Term versus Short-Term View Opposition • Leads to disagreements (e.g. agenda, shareholders) • Both parties listened to the each other’s opinion Problem  Better communication on the goals (elaborate the agenda of the company together)  Understand the other party’s concern and show you will really take it into consideration Solution
    12. 12. What went wrong? Team Process Video Theory Managerial Lessons Uncertainty avoidance • Different views on what to do with aging factories • Different incentives for managers: bonuses vs market share Problem  Be aware of topics that are nationally sensitive (unions, economic situation)  Better understand the habits and fears of the management and employees Solution
    13. 13. What went wrong? Team Process Video Theory Managerial Lessons Cultural context Although smooth meeting, different perceptions about the outcome of the meeting subsequently led to diverging views Problem  Align their vision (E.g. Establish a common summary of the negotiation)  Ensure a better follow-up with pre-established deadlines Solution
    14. 14. General Learning Points for Managers Source: Marks & Mirvis ,1998; Hofstede, 1980; Forbes, 2013, Chakrabarti et al., 2009., Lane et al., 2005 Team Process Video Theory Managerial Lessons Awareness of the “Merger Syndrome” • 3 aspects, personal, organisational & cultural reactions not taken into account in the beginning  “Hostile Takeover” Well-defined Vision of the Transaction Context • Mapping  Bridging  Intergrating = smooth M&A process • Preparation neccessary for deal of such size “Cultural Distance” Hypothesis • success of the M&A deal extensive effort in understanding the CULTURE on the other side of the table Utilisation of Success Potential • Success rate of cross-border M&A found to be higher than for domestic M&A
    15. 15. Thank you! “It is never too late to give up your prejudices” ―Henry David Thoreau
    16. 16. Questions?
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