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Successful M&A:
How to Bridge Corporate Cultures




                                 Sep.2009
                              Original Edition
                 1
Index

 Background, Significance& Scope of the Project
 Action Plan & Milestone
 Survey Output & Case Study
 Culture Integration Model
 Summary




                            2
M&A in Auto Industry




                       3
M&A Result




              65%
             Failed!




                4
Facts of M&A Failure

                               Facts of M&A Failure

      85%
                       80%




                                          45%                   45%

                                                                                      30%



  culture conflict   no M&A plan     lack of understanding management problem   poor M&A experience
                                   of industry and company




                                           5
Project Scope & Our Approach


    find ways and make a  M&A Culture
    Bridge Model to Smoothen Culture
    Conflict in M&A and give our Suggestion
    to the Executives.




                           6
Corporate Culture Definition

          Substance culture:Products & Other Parts which
          Employees Made


          System culture:Organization Policy & System

          Behavior culture:Employees Behavior in Daily
          Work


          Spirit culture:Vision, Value ,Mission which will be the
          core parts in corporate culture




                               7
Index

 Background, Significance& Scope of the Project
 Action Plan & Milestone
 Survey Output & Case Study
 Culture Integration Model
 Summary




                            8
Action Plan
    Phase                     Content description                       Approach                Due date

                 M&A Definition & Process

                 Corporate Culture Definition
                                                                                                 7th May.
 Sort & define                                                Research all kinds of materials      2009
                 Define “How to Bridge Corporate Cultures”
                                                             about corporate culture in M&A
                 Key factors to measure M&A success

                 Find survey targets                          Complete survey map

                 Complete survey questionnaire                Survey Questionnaire
                                                                                                11th June,
    Survey                                                    Survey from C-level to line          2009
                 Survey Allocation
                                                             workers
                 Share survey results in team members         Data analysis

                 Establish Model and find solution
                                                                                                15th July.
  Deep dive      Discuss with executives and get feedback     Make an appointment
                                                                                                  2009
                 Complete a list of suggestion                Action plan

                 Complete presentation materials
                                                                                                30th Sep.
   Present                                                                                         2009
                  Rehearsal



                                                      9
Index

 Background, Significance& Scope of the Project
 Action Plan & Milestone
 Survey Output & Case Study
 Culture Integration Model
 Summary




                            10
Survey Map



                  • Shanghai
                    Headquarter
                    GM
                  • Shanghai Branch
                    GM
                  • Wuhu JV
                    GM
                  • Nanjing JV
                    GM
                  • Hefei JV
                    GM
                  • Shenyang Branch
                    GM




             11
Other Company Cases




                  12
Index

 Background, Significance& Scope of the Project
 Action Plan & Milestone
 Survey Output & Case Study
 Culture Integration Model
 Summary




                            13
Culture Bridge Model


     Before
              • Survey & Assessment
      M&A




     During
              • Build & Maintain
      M&A




     After
              • Cultivate & Enhance
     M&A




                          14
Key Issue in Culture Bridge

                       精神文化
            Spirit                   Substance
           culture                    culture
                       Business
                       Operation




                 Human           Communica
                Resources           tion



          Behavior                     System
           culture                     culture
制度文化                    制度文化



                            15
Culture Bridge Model

               Survey&                  Build&           Cultivate
              Assessment               Maintain         &Enhance


Business      •Business Model
                                •M&A Team            •Set down Targets
Operation   • Management
                                •Business Kick off   •Establish System
            System


                                •Introduction for
Human                                                •People
            •HR System          new ones
Resources                                            Development
            •Behavior Feature   •Performance
                                                     •People Localized
                                Management


Communic    •Executives         •Internal
                                                     •Lesson Learned
ation       Discussion          Communication



                                  16
Process Analyzing Map

                     Form/Tools                People       M&A Team

     Integration
        Plan




                                                                 Output
                                   Culture Bridge
             Input
                                                                       Lesson&
                                                                       Learned
  Culture
Assessment


                                                        Index
                              Process



                                          17
工具/表单      人员



                                           文化整合      输出


  Process                         输入


                                       流程
                                                  衡量指标




            面试面谈
            Communi
            人员交流
             cation


Business
                        People
流程建立                              Achieve
   &
体系完善
Operation                 &        Target

                       Business
            各类培训
             Human
            Resource
            业绩管理




                         18
工具/表单      人员



                                             文化整合      输出


Input                                输入


                                          流程
                                                    衡量指标




 Business Plan
                            Organization
        Relationship        Structure

          Culture Assessment
                   Human
                   Resources


                       19
Culture Assessment Process

    Kick off                 Decision
                 Report
    Meeting                   Make

       CEO
                 Sharing
    Interview

                  Focus
     Survey
                  Team



                    20
Culture Assessment Facts

     Validity       Efficiency      Insight


                                        Org
         Mind          Process
                                     Structure


                                     Strategic
      Performance      Action
                                      Target



        Coterie      Relationship    Tradition


                        21
Analyze Module


                             Mind                       Validity
                             5

Insight       Tradition      4         Performance
                             3

          Strategic          2
                                              Coterie              Foreign-Founded
           Target            1
                                                                   State-Owned
              Org
                                             Process
           Structure
              Relationship          Action

                                                Efficiency


                                        22
工具/表单      人员



                                           文化整合      输出



Form & Tools
                                   输入


                                                  衡量指标
                                        流程




                    People
               Integration Plan
                   Business
               Integration Plan
                  Operation
                   Process
                Training Plan

               Mutli-level Audit

                Best Practice

                       23
M&A Team

 Launch Manager
 BD Manager
 HR Project Manager
 Functional Support
 Consultant Firm




                       24
Lesson & Learned

 M&A Shining-points
 Lesson & Learned
 M&A Checklist




                       25
工具/表单      人员



                                           文化整合      输出


Index                              输入


                                        流程
                                                  衡量指标




ROS              CID
                        System Audit
Retention Rate



          Employee Engagement



                   26
Summary




          Begin with your heart
          From inside to outside
          From top to down


             27

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Successful M&A How To Bridge Corporate Cultures

  • 1. Successful M&A: How to Bridge Corporate Cultures Sep.2009 Original Edition 1
  • 2. Index  Background, Significance& Scope of the Project  Action Plan & Milestone  Survey Output & Case Study  Culture Integration Model  Summary 2
  • 3. M&A in Auto Industry 3
  • 4. M&A Result 65% Failed! 4
  • 5. Facts of M&A Failure Facts of M&A Failure 85% 80% 45% 45% 30% culture conflict no M&A plan lack of understanding management problem poor M&A experience of industry and company 5
  • 6. Project Scope & Our Approach find ways and make a M&A Culture Bridge Model to Smoothen Culture Conflict in M&A and give our Suggestion to the Executives. 6
  • 7. Corporate Culture Definition Substance culture:Products & Other Parts which Employees Made System culture:Organization Policy & System Behavior culture:Employees Behavior in Daily Work Spirit culture:Vision, Value ,Mission which will be the core parts in corporate culture 7
  • 8. Index  Background, Significance& Scope of the Project  Action Plan & Milestone  Survey Output & Case Study  Culture Integration Model  Summary 8
  • 9. Action Plan Phase Content description Approach Due date M&A Definition & Process Corporate Culture Definition 7th May. Sort & define Research all kinds of materials 2009 Define “How to Bridge Corporate Cultures” about corporate culture in M&A Key factors to measure M&A success Find survey targets Complete survey map Complete survey questionnaire Survey Questionnaire 11th June, Survey Survey from C-level to line 2009 Survey Allocation workers Share survey results in team members Data analysis Establish Model and find solution 15th July. Deep dive Discuss with executives and get feedback Make an appointment 2009 Complete a list of suggestion Action plan Complete presentation materials 30th Sep. Present 2009 Rehearsal 9
  • 10. Index  Background, Significance& Scope of the Project  Action Plan & Milestone  Survey Output & Case Study  Culture Integration Model  Summary 10
  • 11. Survey Map • Shanghai Headquarter GM • Shanghai Branch GM • Wuhu JV GM • Nanjing JV GM • Hefei JV GM • Shenyang Branch GM 11
  • 13. Index  Background, Significance& Scope of the Project  Action Plan & Milestone  Survey Output & Case Study  Culture Integration Model  Summary 13
  • 14. Culture Bridge Model Before • Survey & Assessment M&A During • Build & Maintain M&A After • Cultivate & Enhance M&A 14
  • 15. Key Issue in Culture Bridge 精神文化 Spirit Substance culture culture Business Operation Human Communica Resources tion Behavior System culture culture 制度文化 制度文化 15
  • 16. Culture Bridge Model Survey& Build& Cultivate Assessment Maintain &Enhance Business •Business Model •M&A Team •Set down Targets Operation • Management •Business Kick off •Establish System System •Introduction for Human •People •HR System new ones Resources Development •Behavior Feature •Performance •People Localized Management Communic •Executives •Internal •Lesson Learned ation Discussion Communication 16
  • 17. Process Analyzing Map Form/Tools People M&A Team Integration Plan Output Culture Bridge Input Lesson& Learned Culture Assessment Index Process 17
  • 18. 工具/表单 人员 文化整合 输出 Process 输入 流程 衡量指标 面试面谈 Communi 人员交流 cation Business People 流程建立 Achieve & 体系完善 Operation & Target Business 各类培训 Human Resource 业绩管理 18
  • 19. 工具/表单 人员 文化整合 输出 Input 输入 流程 衡量指标 Business Plan Organization Relationship Structure Culture Assessment Human Resources 19
  • 20. Culture Assessment Process Kick off Decision Report Meeting Make CEO Sharing Interview Focus Survey Team 20
  • 21. Culture Assessment Facts Validity Efficiency Insight Org Mind Process Structure Strategic Performance Action Target Coterie Relationship Tradition 21
  • 22. Analyze Module Mind Validity 5 Insight Tradition 4 Performance 3 Strategic 2 Coterie Foreign-Founded Target 1 State-Owned Org Process Structure Relationship Action Efficiency 22
  • 23. 工具/表单 人员 文化整合 输出 Form & Tools 输入 衡量指标 流程 People Integration Plan Business Integration Plan Operation Process Training Plan Mutli-level Audit Best Practice 23
  • 24. M&A Team  Launch Manager  BD Manager  HR Project Manager  Functional Support  Consultant Firm 24
  • 25. Lesson & Learned  M&A Shining-points  Lesson & Learned  M&A Checklist 25
  • 26. 工具/表单 人员 文化整合 输出 Index 输入 流程 衡量指标 ROS CID System Audit Retention Rate Employee Engagement 26
  • 27. Summary Begin with your heart From inside to outside From top to down 27