Cultural differences play a key role in determining the success or failure of mergers and acquisitions (M&As) in the banking industry. While traditional M&A planning focuses on financial and legal aspects, cultural factors can significantly impact achieving integration targets and realizing synergies. The document discusses how cultural clashes have derailed some large M&A deals in banking. It emphasizes the need to conduct cultural due diligence during mergers to understand differences that may hinder integration, and to develop strategies to mitigate cultural risks that could threaten the M&A objectives. Managing cultural issues effectively, such as through clear communication during integration, is essential to leveraging cultural diversity as an asset rather than a liability in banking M&As.
An evaluation of financing and development of small and medium enterprises in...Alexander Decker
This document summarizes a study that evaluated the relationship between financing and the development of small and medium enterprises (SMEs) in Mombasa County, Kenya. The study found that access to financing is a major factor in the growth and development of SMEs in Mombasa County. However, most SMEs could not survive beyond three years due to a lack of adequate and relevant financing information. The study also found that Mombasa County has a weak enterprise finance information system that does not support the information needs of SMEs. Overall knowledge and awareness of financing options available to SMEs in Mombasa County were determined to be weak based on the findings of this study.
A M&A PROCESS PERSPECTIVE IN THE BANKING SECTORIulian Warter
This document discusses mergers and acquisitions (M&As) in the banking sector. It begins by noting that turmoil in the banking sector has led to structural changes and opportunities for M&As. However, many M&A deals in banking fail due to strategic factors not being properly anticipated. The document then examines various factors that influence cross-border M&A deals in banking, such as achieving economies of scale, diversifying risks, and strategic repositioning. Cultural differences and integration challenges can impact M&A performance. The key to success is properly assessing strategic and cultural fit between banks and effective integration. Overall performance of bank M&As is mixed, with failures often resulting from poor integration and cultural clashes.
Structural and relational influences on credit availability to small and mic...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Is there a tradeoff between outreach and sustainability of micro finance inst...Alexander Decker
This document analyzes whether there is a tradeoff between outreach and sustainability for microfinance institutions (MFIs) in India. It examines the correlation between various measures of outreach (average loan size, number of women borrowers) and measures of sustainability (operational self-sufficiency). The study finds a weak correlation between average loan size/number of women borrowers and sustainability, but a strong positive correlation between number of active borrowers (breadth of outreach) and sustainability. This suggests that for these Indian MFIs, breadth of outreach and sustainability may be complementary rather than in conflict. The document provides context on the debate around balancing social and financial goals for MFIs.
DIVERGENCE IN COMMERCIAL BANK LENDING DIMENSIONS: EMPIRICAL STUDY ON ETHIOPIAIAEME Publication
Quite a number of studies in the past in various countries accentuated the significance of demographic variables in lending decisions of bank-officials. Do the dimensions of commercial bank lending diverge by gender, age-group, banking experience, sector of the bank, and designation held by bank-officials in Ethiopia? This is the key issue that is tried to be answered by empirical testing in this study. For the purpose of this descriptive study of cross-sectional design, data were collected by means of a pilot-tested questionnaire from bank-officials across the country between February and July 2015.
This document discusses several ethical issues in the finance sector. It begins by introducing the topic and noting that ethics are often not considered in finance where the goal is seen as making money. It then examines issues like lack of transparency, conflicts of interest, and how financial crises can exacerbate unethical behavior. The roles of economics, society, and regulators in influencing ethics are also evaluated. The document concludes by emphasizing the need for upholding values like honesty, fairness and morality in the financial sector.
Demand of External Finance by SMEs in Addis AbabaElias Eriksson
This document summarizes a study on the demand for external financing among manufacturing SMEs in Addis Ababa, Ethiopia. The study uses quantitative data from Ethiopian manufacturing firms from 2012-2013 to examine what factors influence their use of bank loans. It also conducts qualitative interviews with SME managers to understand their financial behaviors and perceptions of external financing. The results show that firm size and fixed assets are positively correlated with having a bank loan, while profitability and age may be negatively correlated. Interviews reveal that small, labor-intensive firms rely more on informal financing due to perceived barriers to banks, like high collateral requirements. The author recommends improving foreign currency flows, contract enforcement, and lowering perceived barriers to banks to
Determinants of Coffee Farmers Cooperatives’ Demand for Institutional Credit:...Premier Publishers
This study explored determinants of coffee farmer cooperatives’ demand for institutional credit under the Ethiopian context. The data was collected from 100 farmers primary cooperatives and analysed using descriptive statistics and Heckman two-step selection econometric model. The study reveals that the vast majority of the study cooperatives have potential demand for credit, while the revealed demand was found to be relatively low. Different sets of variables were found to influence cooperatives’ potential and actual demand for institutional credit in different ways. In order to address constraints preventing farmer cooperatives from effectively demanding and accessing institutional credit, recommendations are made in relation to the borrower cooperatives, lending banks and government policy.
An evaluation of financing and development of small and medium enterprises in...Alexander Decker
This document summarizes a study that evaluated the relationship between financing and the development of small and medium enterprises (SMEs) in Mombasa County, Kenya. The study found that access to financing is a major factor in the growth and development of SMEs in Mombasa County. However, most SMEs could not survive beyond three years due to a lack of adequate and relevant financing information. The study also found that Mombasa County has a weak enterprise finance information system that does not support the information needs of SMEs. Overall knowledge and awareness of financing options available to SMEs in Mombasa County were determined to be weak based on the findings of this study.
A M&A PROCESS PERSPECTIVE IN THE BANKING SECTORIulian Warter
This document discusses mergers and acquisitions (M&As) in the banking sector. It begins by noting that turmoil in the banking sector has led to structural changes and opportunities for M&As. However, many M&A deals in banking fail due to strategic factors not being properly anticipated. The document then examines various factors that influence cross-border M&A deals in banking, such as achieving economies of scale, diversifying risks, and strategic repositioning. Cultural differences and integration challenges can impact M&A performance. The key to success is properly assessing strategic and cultural fit between banks and effective integration. Overall performance of bank M&As is mixed, with failures often resulting from poor integration and cultural clashes.
Structural and relational influences on credit availability to small and mic...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Is there a tradeoff between outreach and sustainability of micro finance inst...Alexander Decker
This document analyzes whether there is a tradeoff between outreach and sustainability for microfinance institutions (MFIs) in India. It examines the correlation between various measures of outreach (average loan size, number of women borrowers) and measures of sustainability (operational self-sufficiency). The study finds a weak correlation between average loan size/number of women borrowers and sustainability, but a strong positive correlation between number of active borrowers (breadth of outreach) and sustainability. This suggests that for these Indian MFIs, breadth of outreach and sustainability may be complementary rather than in conflict. The document provides context on the debate around balancing social and financial goals for MFIs.
DIVERGENCE IN COMMERCIAL BANK LENDING DIMENSIONS: EMPIRICAL STUDY ON ETHIOPIAIAEME Publication
Quite a number of studies in the past in various countries accentuated the significance of demographic variables in lending decisions of bank-officials. Do the dimensions of commercial bank lending diverge by gender, age-group, banking experience, sector of the bank, and designation held by bank-officials in Ethiopia? This is the key issue that is tried to be answered by empirical testing in this study. For the purpose of this descriptive study of cross-sectional design, data were collected by means of a pilot-tested questionnaire from bank-officials across the country between February and July 2015.
This document discusses several ethical issues in the finance sector. It begins by introducing the topic and noting that ethics are often not considered in finance where the goal is seen as making money. It then examines issues like lack of transparency, conflicts of interest, and how financial crises can exacerbate unethical behavior. The roles of economics, society, and regulators in influencing ethics are also evaluated. The document concludes by emphasizing the need for upholding values like honesty, fairness and morality in the financial sector.
Demand of External Finance by SMEs in Addis AbabaElias Eriksson
This document summarizes a study on the demand for external financing among manufacturing SMEs in Addis Ababa, Ethiopia. The study uses quantitative data from Ethiopian manufacturing firms from 2012-2013 to examine what factors influence their use of bank loans. It also conducts qualitative interviews with SME managers to understand their financial behaviors and perceptions of external financing. The results show that firm size and fixed assets are positively correlated with having a bank loan, while profitability and age may be negatively correlated. Interviews reveal that small, labor-intensive firms rely more on informal financing due to perceived barriers to banks, like high collateral requirements. The author recommends improving foreign currency flows, contract enforcement, and lowering perceived barriers to banks to
Determinants of Coffee Farmers Cooperatives’ Demand for Institutional Credit:...Premier Publishers
This study explored determinants of coffee farmer cooperatives’ demand for institutional credit under the Ethiopian context. The data was collected from 100 farmers primary cooperatives and analysed using descriptive statistics and Heckman two-step selection econometric model. The study reveals that the vast majority of the study cooperatives have potential demand for credit, while the revealed demand was found to be relatively low. Different sets of variables were found to influence cooperatives’ potential and actual demand for institutional credit in different ways. In order to address constraints preventing farmer cooperatives from effectively demanding and accessing institutional credit, recommendations are made in relation to the borrower cooperatives, lending banks and government policy.
Department of accounting and finance, mekelle university, ethiopiaAlexander Decker
This document summarizes a study that assessed the determinants of micro and small enterprises' (MSEs) access to finance in Asella, Ethiopia. The study used a survey of 134 MSEs and binary logistic regression to identify factors that affect MSEs' ability to access credit from formal financial institutions. The results showed that older operators, higher levels of education, possession of fixed assets, larger employment size, and positive attitudes towards lending procedures and repayment periods increased the likelihood of obtaining credit. Considering the important role of MSEs, all stakeholders should help improve their access to financing.
This document summarizes a study investigating the vertical linkages between formal and informal financial institutions in the Philippines. Specifically, it examines how expanding formal credit to informal lenders, like traders and millers, may impact loan terms for borrowers in the informal sector. The study finds that the effects depend on the nature of competition between informal lenders. If lenders cooperate strategically through threats of reprisal, then greater access to formal credit could allow lenders to collude and worsen terms for informal borrowers. The document provides context on the Philippine financial system and evidence of existing connections between formal banks and informal lenders like traders. It also presents a theoretical framework to analyze how different market structures, like competition or cooperation, could
The issue of getting finances for the small businesses and entrepreneurs is always been in debate and remain unresolved in the developing countries due to unavailability of qualified venture capitalists. The developing and emerging economies set the micro finance banks for this purpose, however, it is argued that the owner and entrepreneur faces many problems like collaterals, documentation, etc. This research focuses on the role of financial banks in promoting the small business and entrepreneurial culture in the Saudi Arabia in providing credit. The research applied a mixed methodology and at the first stage, qualitative data is collected and then the results of these structured interviews were used to construct a survey
questionnaire for the quantitative analysis. The result of study shows that the levels of business cooperation and information sharing and quality of business have an important significance on the success of loan application. Furthermore, the results also support that the bureaucracy of bank in terms of loan documents requirement and loan evaluation procedure can make small business hesitate when applying for loans.
This document summarizes research on the impact of debt crisis on corporate firm performance in Slovakia. It finds that 91% of changes in debt ratios of firms with 3000-3999 employees can be explained by changes in variables like profit, assets, and debt to EBITDA. A comparison of 2010 and 2013 data showed an increase in firm assets. The conclusion is that firms need to make timely changes to improve financial performance during a debt crisis.
This document introduces a new dataset on small and medium enterprises (SMEs) to fill gaps in cross-country SME data. The summary analyzes the dataset and finds:
1) Global SME lending is estimated to be $10 trillion, with 70% in high-income countries.
2) SME loans average 13% of GDP in developed countries and 3% in developing countries.
3) Differences in SME definitions across countries do not significantly impact cross-country comparisons of SME lending volumes.
The oliver twists among women microcredit borrowers, intra household decision...Alexander Decker
This document summarizes a study that investigated factors motivating women microcredit borrowers in Ghana to take multiple loans. The study found:
1) Factors impacting the decision to borrow initially were different than those impacting the decision to take multiple loans, though some variables like household size impacted both decisions.
2) Women who relinquished control of loans to spouses or needed spouse's permission were less likely to take multiple loans.
3) Poorer respondents were also less likely to take multiple loans than wealthier counterparts.
4) The conclusion was that intra-household power dynamics in male-dominated households prevented some women from accessing the full benefits of multiple loans.
Determinants of financial literacy levels among employees of kenya ports auth...Alexander Decker
This document summarizes a study that examines the determinants of financial literacy levels among employees of Kenya Ports Authority in Kenya. The study found that overall financial literacy levels among employees were low. Financial literacy was affected by gender, age, education levels, wealth factors, and sources of financial information and advice. However, it was not affected by occupation status, occupation type, or personal income. The study recommends that employers and policymakers develop strategies to increase financial literacy, such as providing reliable sources of financial advice.
CULTURAL DUE DILIGENCE AS COMPETITIVE ADVANTAGE IN CROSS-BORDER MERGERS AND A...Iulian Warter
This document discusses the importance of cultural due diligence in cross-border mergers and acquisitions. It notes that managing cultural differences is crucial for M&A success but is often overlooked. Cultural due diligence helps identify cultural factors that could impact integration and develop strategies to prevent conflicts. The document reviews how cultural clashes have undermined mergers and acquisitions in the past. It argues cultural due diligence is needed to understand risks and opportunities from differing national and corporate cultures during M&As.
Ivo pezzuto "Turning Globalization 4.0 Into a Real and Sustainable Success fo...Dr. Ivo Pezzuto
The new era of globalization, propelled by the rapid technological advancements and widespread concern for sustainable development goals, seems to be headed for a bright and promising future, driven by an unprecedented groundbreaking potential. It’s a very exciting moment for dynamic, highly competitive and innovative firms and startups to engage these days in international business, thanks to a vibrant and highly interconnected global business environment, eagerly driven knowledge-sharing communities, and ease of access to smart and seamless enabling technologies. Yet, globalization is currently facing also very serious challenges whose root causes seem to be deep and complex and if they are not fully understood and properly addressed by political leaders and multilateral institutions, they may potentially threaten to derail the existing world order. This article aims to provide a broad overview of the major opportunities and challenges of the new era of globalization and to stimulate reflections, debates, and possible new visions and strategic directions in order to create a more sustainable, socially inclusive, competitive, innovation-driven, and prosperous future for all stakeholders in the global market.
This document presents the results of a mixed-methods study examining the relationship between educational attainment, debt, and debt relief in Austria. The study used quantitative analysis of survey data to detect relationships between education levels and characteristics of individuals' debt profiles. Qualitative interviews with experts and laypeople revealed why those with different education levels have the debt profiles they do and how they handle debt. The quantitative analysis found only ambiguous relationships between higher education and higher debt levels. However, the qualitative interviews demonstrated the relevance of education for how people deal with debt.
Multi Country Data Sources for Access toFinanceDr Lendy Spires
This document reviews various multi-country data sources related to access to finance and microfinance. It identifies four main categories of data gaps: 1) measuring financial inclusion outreach, 2) understanding the costs and barriers to accessing financial products, 3) learning how customers use financial services, and 4) tracking funding flows to microfinance. While some data sources provide information on specific topics, comprehensive and standardized data is still lacking. Definitional issues and lack of coordination between surveys hamper comparisons across countries.
The document summarizes key findings from the Third Annual Independent Workforce Report by MBO Partners on the state of independent workers in America in 2013. Some of the main points include:
- There were 17.7 million independent workers in the US in 2013, up 5% from 2012 and 10% from the base year of 2011. Independent workers generated over $1.2 trillion in total income in 2013, up 20% from 2012.
- Independent workers continue to be satisfied with their work, with 64% highly satisfied. Most plan to continue working independently. Independence is becoming a long-term structural shift in the workforce.
- Independent workers make a significant economic impact through their income and spending. They also
Succession process among africa owned business europe 1John Johari
This document discusses family businesses and succession problems. It begins by establishing that family businesses make up a significant portion (70-80%) of businesses in Europe and employ 40-50% of the workforce. One of the major problems family businesses face is transferring ownership and management to the next generation, and only 30% of businesses survive to the second generation due to unsolved succession issues. The document then provides context on family businesses in the EU and former socialist countries like Slovenia, where they have emerged as an important part of the economy since the transition in the 1990s. It establishes that succession planning is a crucial issue for family businesses that requires supportive infrastructure and policies.
Adaptation and barriers of e commerce in tanzania small and medium enterprisesAlexander Decker
This document discusses barriers to e-commerce adoption among small and medium enterprises (SMEs) in Tanzania. It identifies six categories of barriers: technical, organizational, social, legal/regulatory, skills/knowledge, and infrastructure. A survey was conducted of SMEs that do and do not use e-commerce to determine the most significant barriers in the Tanzanian context. The results showed that technical barriers were the most important overall, while lack of internet security was the highest individual barrier. The findings imply more efforts are needed to encourage e-commerce adoption among SMEs in Tanzania, especially for more advanced applications.
CULTURAL DUE DILIGENCE AS COMPETITIVE ADVANTAGE IN CROSS-BORDER MERGERS AND A...Liviu Warter
This document discusses the importance of cultural due diligence in cross-border mergers and acquisitions. It begins by providing context on the rise of cross-border M&As and challenges of integrating different corporate and national cultures. It then discusses how cultural due diligence aims to identify cultural differences and similarities to understand intercultural risks and opportunities. The document argues that cultural due diligence influences post-M&A integration and performance, though there is lack of consensus on its exact process and depth. It provides examples of how cultural clashes negatively impacted past deals and underscores managing cultural differences as crucial for M&A success.
A M&A PROCESS PERSPECTIVE IN THE BANKING SECTORLiviu Warter
This document discusses mergers and acquisitions (M&As) in the banking sector. It begins by noting that turmoil in the banking sector has led to structural changes and opportunities for M&As. However, many M&A deals in banking fail due to strategic factors not being properly anticipated. The document then examines various factors that influence cross-border M&A deals in banking, such as achieving economies of scale, diversifying risks, and strategic repositioning. Cultural differences and integration challenges can impact M&A performance. The key to success is properly assessing strategic and cultural fit between banks and effective integration. Overall performance of bank M&As is mixed, with failures often resulting from poor integration and cultural clashes.
INTERCULTURAL NEGOTIATION IN MERGERS AND ACQUISITIONS. THE INTEGRATION OF THE...Liviu Warter
This document summarizes a research article about intercultural negotiation in mergers and acquisitions. It discusses how culture impacts negotiation between parties in cross-border M&As. Culture can influence negotiation at the cognitive, belief/value, and identity levels. There are many factors that influence the negotiation process, including structural, strategic, and cultural factors. Intercultural negotiation aims to clarify goals, define relationships, communicate issues, develop options, and reach agreements between different cultures. The integration of cultural dimensions into negotiation is complex as culture incorporates many components.
INTERCULTURAL NEGOTIATION IN MERGERS AND ACQUISITIONS. THE INTEGRATION OF THE...Iulian Warter
This document summarizes a research article about intercultural negotiation in mergers and acquisitions. It discusses how culture impacts negotiation between parties in cross-border M&As. Culture can influence negotiation at the cognitive, belief/value, and identity levels. There are many factors that influence the negotiation process, including structural, strategic, and cultural factors. Intercultural negotiation aims to clarify goals, define relationships, communicate issues, develop options, and reach agreements between different cultures. The integration of cultural dimensions into negotiation is complex as culture incorporates many components.
Managing Cultural Integration in Cross-Border Mergers and AcquisitionsDenison Consulting
Cross-border M&A has become one of the leading approaches for firms to
gain access to global markets. Yet there has been little progress in the
research literature exploring the role that culture may play in the success
of these ventures. Poor culture-fit has often been cited as one reason why
M&A has not produced the outcomes organizations hoped for (Cartwright & Schoenberg, 2006). Cross-border M&A has the added challenges of having to deal with both national and organizational culture
differences. In this chapter we review the literature on cultural integration
in cross-border M&A and provide a framework designed to help manage
the integration process throughout the M&A lifecycle. This framework
presents culture assessment and integration as a crucial component to
reducing poor culture-fit as a barrier to M&A success.
1. Mergers and acquisitions often fail due to cultural integration challenges that are not adequately addressed. Assessing organizational culture differences between companies and developing a shared new culture is critical for integration success.
2. Cultural clashes during the integration process can lower employee commitment, complicate integration, and increase risks if not properly managed. Developing a clear strategy for cultural integration is important to mitigate these hazards.
3. Systematic cultural due diligence and assessment tools can help identify cultural compatibility, differences to address, and opportunities for developing an optimal new culture during the integration process following a merger or acquisition. Effective change management and leadership are needed to guide the cultural transformation.
This document summarizes a research paper that investigates the role of non-bank financial institutions (OFIs), including credit unions, in economic growth. It analyzes data from 76 countries from 1981 to 2005. The paper finds that measures of OFI assets and credit are positively and significantly related to real GDP growth, even after controlling for bank credit. Measures of credit union loans and assets are also positively linked to economic growth. While bank credit is positively related to growth, the relationship is not statistically significant over the sample period. The findings suggest that OFIs play an important role in promoting economic growth.
Department of accounting and finance, mekelle university, ethiopiaAlexander Decker
This document summarizes a study that assessed the determinants of micro and small enterprises' (MSEs) access to finance in Asella, Ethiopia. The study used a survey of 134 MSEs and binary logistic regression to identify factors that affect MSEs' ability to access credit from formal financial institutions. The results showed that older operators, higher levels of education, possession of fixed assets, larger employment size, and positive attitudes towards lending procedures and repayment periods increased the likelihood of obtaining credit. Considering the important role of MSEs, all stakeholders should help improve their access to financing.
This document summarizes a study investigating the vertical linkages between formal and informal financial institutions in the Philippines. Specifically, it examines how expanding formal credit to informal lenders, like traders and millers, may impact loan terms for borrowers in the informal sector. The study finds that the effects depend on the nature of competition between informal lenders. If lenders cooperate strategically through threats of reprisal, then greater access to formal credit could allow lenders to collude and worsen terms for informal borrowers. The document provides context on the Philippine financial system and evidence of existing connections between formal banks and informal lenders like traders. It also presents a theoretical framework to analyze how different market structures, like competition or cooperation, could
The issue of getting finances for the small businesses and entrepreneurs is always been in debate and remain unresolved in the developing countries due to unavailability of qualified venture capitalists. The developing and emerging economies set the micro finance banks for this purpose, however, it is argued that the owner and entrepreneur faces many problems like collaterals, documentation, etc. This research focuses on the role of financial banks in promoting the small business and entrepreneurial culture in the Saudi Arabia in providing credit. The research applied a mixed methodology and at the first stage, qualitative data is collected and then the results of these structured interviews were used to construct a survey
questionnaire for the quantitative analysis. The result of study shows that the levels of business cooperation and information sharing and quality of business have an important significance on the success of loan application. Furthermore, the results also support that the bureaucracy of bank in terms of loan documents requirement and loan evaluation procedure can make small business hesitate when applying for loans.
This document summarizes research on the impact of debt crisis on corporate firm performance in Slovakia. It finds that 91% of changes in debt ratios of firms with 3000-3999 employees can be explained by changes in variables like profit, assets, and debt to EBITDA. A comparison of 2010 and 2013 data showed an increase in firm assets. The conclusion is that firms need to make timely changes to improve financial performance during a debt crisis.
This document introduces a new dataset on small and medium enterprises (SMEs) to fill gaps in cross-country SME data. The summary analyzes the dataset and finds:
1) Global SME lending is estimated to be $10 trillion, with 70% in high-income countries.
2) SME loans average 13% of GDP in developed countries and 3% in developing countries.
3) Differences in SME definitions across countries do not significantly impact cross-country comparisons of SME lending volumes.
The oliver twists among women microcredit borrowers, intra household decision...Alexander Decker
This document summarizes a study that investigated factors motivating women microcredit borrowers in Ghana to take multiple loans. The study found:
1) Factors impacting the decision to borrow initially were different than those impacting the decision to take multiple loans, though some variables like household size impacted both decisions.
2) Women who relinquished control of loans to spouses or needed spouse's permission were less likely to take multiple loans.
3) Poorer respondents were also less likely to take multiple loans than wealthier counterparts.
4) The conclusion was that intra-household power dynamics in male-dominated households prevented some women from accessing the full benefits of multiple loans.
Determinants of financial literacy levels among employees of kenya ports auth...Alexander Decker
This document summarizes a study that examines the determinants of financial literacy levels among employees of Kenya Ports Authority in Kenya. The study found that overall financial literacy levels among employees were low. Financial literacy was affected by gender, age, education levels, wealth factors, and sources of financial information and advice. However, it was not affected by occupation status, occupation type, or personal income. The study recommends that employers and policymakers develop strategies to increase financial literacy, such as providing reliable sources of financial advice.
CULTURAL DUE DILIGENCE AS COMPETITIVE ADVANTAGE IN CROSS-BORDER MERGERS AND A...Iulian Warter
This document discusses the importance of cultural due diligence in cross-border mergers and acquisitions. It notes that managing cultural differences is crucial for M&A success but is often overlooked. Cultural due diligence helps identify cultural factors that could impact integration and develop strategies to prevent conflicts. The document reviews how cultural clashes have undermined mergers and acquisitions in the past. It argues cultural due diligence is needed to understand risks and opportunities from differing national and corporate cultures during M&As.
Ivo pezzuto "Turning Globalization 4.0 Into a Real and Sustainable Success fo...Dr. Ivo Pezzuto
The new era of globalization, propelled by the rapid technological advancements and widespread concern for sustainable development goals, seems to be headed for a bright and promising future, driven by an unprecedented groundbreaking potential. It’s a very exciting moment for dynamic, highly competitive and innovative firms and startups to engage these days in international business, thanks to a vibrant and highly interconnected global business environment, eagerly driven knowledge-sharing communities, and ease of access to smart and seamless enabling technologies. Yet, globalization is currently facing also very serious challenges whose root causes seem to be deep and complex and if they are not fully understood and properly addressed by political leaders and multilateral institutions, they may potentially threaten to derail the existing world order. This article aims to provide a broad overview of the major opportunities and challenges of the new era of globalization and to stimulate reflections, debates, and possible new visions and strategic directions in order to create a more sustainable, socially inclusive, competitive, innovation-driven, and prosperous future for all stakeholders in the global market.
This document presents the results of a mixed-methods study examining the relationship between educational attainment, debt, and debt relief in Austria. The study used quantitative analysis of survey data to detect relationships between education levels and characteristics of individuals' debt profiles. Qualitative interviews with experts and laypeople revealed why those with different education levels have the debt profiles they do and how they handle debt. The quantitative analysis found only ambiguous relationships between higher education and higher debt levels. However, the qualitative interviews demonstrated the relevance of education for how people deal with debt.
Multi Country Data Sources for Access toFinanceDr Lendy Spires
This document reviews various multi-country data sources related to access to finance and microfinance. It identifies four main categories of data gaps: 1) measuring financial inclusion outreach, 2) understanding the costs and barriers to accessing financial products, 3) learning how customers use financial services, and 4) tracking funding flows to microfinance. While some data sources provide information on specific topics, comprehensive and standardized data is still lacking. Definitional issues and lack of coordination between surveys hamper comparisons across countries.
The document summarizes key findings from the Third Annual Independent Workforce Report by MBO Partners on the state of independent workers in America in 2013. Some of the main points include:
- There were 17.7 million independent workers in the US in 2013, up 5% from 2012 and 10% from the base year of 2011. Independent workers generated over $1.2 trillion in total income in 2013, up 20% from 2012.
- Independent workers continue to be satisfied with their work, with 64% highly satisfied. Most plan to continue working independently. Independence is becoming a long-term structural shift in the workforce.
- Independent workers make a significant economic impact through their income and spending. They also
Succession process among africa owned business europe 1John Johari
This document discusses family businesses and succession problems. It begins by establishing that family businesses make up a significant portion (70-80%) of businesses in Europe and employ 40-50% of the workforce. One of the major problems family businesses face is transferring ownership and management to the next generation, and only 30% of businesses survive to the second generation due to unsolved succession issues. The document then provides context on family businesses in the EU and former socialist countries like Slovenia, where they have emerged as an important part of the economy since the transition in the 1990s. It establishes that succession planning is a crucial issue for family businesses that requires supportive infrastructure and policies.
Adaptation and barriers of e commerce in tanzania small and medium enterprisesAlexander Decker
This document discusses barriers to e-commerce adoption among small and medium enterprises (SMEs) in Tanzania. It identifies six categories of barriers: technical, organizational, social, legal/regulatory, skills/knowledge, and infrastructure. A survey was conducted of SMEs that do and do not use e-commerce to determine the most significant barriers in the Tanzanian context. The results showed that technical barriers were the most important overall, while lack of internet security was the highest individual barrier. The findings imply more efforts are needed to encourage e-commerce adoption among SMEs in Tanzania, especially for more advanced applications.
CULTURAL DUE DILIGENCE AS COMPETITIVE ADVANTAGE IN CROSS-BORDER MERGERS AND A...Liviu Warter
This document discusses the importance of cultural due diligence in cross-border mergers and acquisitions. It begins by providing context on the rise of cross-border M&As and challenges of integrating different corporate and national cultures. It then discusses how cultural due diligence aims to identify cultural differences and similarities to understand intercultural risks and opportunities. The document argues that cultural due diligence influences post-M&A integration and performance, though there is lack of consensus on its exact process and depth. It provides examples of how cultural clashes negatively impacted past deals and underscores managing cultural differences as crucial for M&A success.
A M&A PROCESS PERSPECTIVE IN THE BANKING SECTORLiviu Warter
This document discusses mergers and acquisitions (M&As) in the banking sector. It begins by noting that turmoil in the banking sector has led to structural changes and opportunities for M&As. However, many M&A deals in banking fail due to strategic factors not being properly anticipated. The document then examines various factors that influence cross-border M&A deals in banking, such as achieving economies of scale, diversifying risks, and strategic repositioning. Cultural differences and integration challenges can impact M&A performance. The key to success is properly assessing strategic and cultural fit between banks and effective integration. Overall performance of bank M&As is mixed, with failures often resulting from poor integration and cultural clashes.
INTERCULTURAL NEGOTIATION IN MERGERS AND ACQUISITIONS. THE INTEGRATION OF THE...Liviu Warter
This document summarizes a research article about intercultural negotiation in mergers and acquisitions. It discusses how culture impacts negotiation between parties in cross-border M&As. Culture can influence negotiation at the cognitive, belief/value, and identity levels. There are many factors that influence the negotiation process, including structural, strategic, and cultural factors. Intercultural negotiation aims to clarify goals, define relationships, communicate issues, develop options, and reach agreements between different cultures. The integration of cultural dimensions into negotiation is complex as culture incorporates many components.
INTERCULTURAL NEGOTIATION IN MERGERS AND ACQUISITIONS. THE INTEGRATION OF THE...Iulian Warter
This document summarizes a research article about intercultural negotiation in mergers and acquisitions. It discusses how culture impacts negotiation between parties in cross-border M&As. Culture can influence negotiation at the cognitive, belief/value, and identity levels. There are many factors that influence the negotiation process, including structural, strategic, and cultural factors. Intercultural negotiation aims to clarify goals, define relationships, communicate issues, develop options, and reach agreements between different cultures. The integration of cultural dimensions into negotiation is complex as culture incorporates many components.
Managing Cultural Integration in Cross-Border Mergers and AcquisitionsDenison Consulting
Cross-border M&A has become one of the leading approaches for firms to
gain access to global markets. Yet there has been little progress in the
research literature exploring the role that culture may play in the success
of these ventures. Poor culture-fit has often been cited as one reason why
M&A has not produced the outcomes organizations hoped for (Cartwright & Schoenberg, 2006). Cross-border M&A has the added challenges of having to deal with both national and organizational culture
differences. In this chapter we review the literature on cultural integration
in cross-border M&A and provide a framework designed to help manage
the integration process throughout the M&A lifecycle. This framework
presents culture assessment and integration as a crucial component to
reducing poor culture-fit as a barrier to M&A success.
1. Mergers and acquisitions often fail due to cultural integration challenges that are not adequately addressed. Assessing organizational culture differences between companies and developing a shared new culture is critical for integration success.
2. Cultural clashes during the integration process can lower employee commitment, complicate integration, and increase risks if not properly managed. Developing a clear strategy for cultural integration is important to mitigate these hazards.
3. Systematic cultural due diligence and assessment tools can help identify cultural compatibility, differences to address, and opportunities for developing an optimal new culture during the integration process following a merger or acquisition. Effective change management and leadership are needed to guide the cultural transformation.
This document summarizes a research paper that investigates the role of non-bank financial institutions (OFIs), including credit unions, in economic growth. It analyzes data from 76 countries from 1981 to 2005. The paper finds that measures of OFI assets and credit are positively and significantly related to real GDP growth, even after controlling for bank credit. Measures of credit union loans and assets are also positively linked to economic growth. While bank credit is positively related to growth, the relationship is not statistically significant over the sample period. The findings suggest that OFIs play an important role in promoting economic growth.
Cultural Intelligence: Bridging the Cultural Differences in the Emerging MarketsJIANGUANGLUNG DANGMEI
In the emerging markets, cross border management has become a big challenge among the organizations. Researchers
have suggested that a high IQ and emotional intelligence may not be sufficient to successfully handle the global situations,
interaction and complexity tasks for an organization due to diversity in cultures. As organizations rely on the emerging
markets for revenue growth and expansion, they need to familiarize with different cultures and need to communicate
well with other cultures. If these cultural differences are not well managed, misunderstanding and conflict may rise in
the business across the world and organizations could be at risk if management fails to deal with the cultural difference.
Fortunately, researchers have recognized that cultural intelligence is a critical factor to overcome the challenges of cultural
differences. The realities of contemporary organizations demonstrated that cultural intelligence has vital implications for
individuals and organizations in the globalization as cultural diversities require organizations to interact with people from
a variety of backgrounds. When the cultural diversity is handled properly by incorporating cultural intelligence in the
organizations, it will be a competitive advantage for the organizations. Organizations operating in the cross border business now need to incorporate cultural intelligence to overcome the challenges of cultural differences in the emerging markets.
Intercultural Communication within the Aviation Organization.docxmariuse18nolet
Intercultural Communication within the Aviation Organizations in the United Arab Emirates
Introduction
Businesses have been developing massive ideas aiming at expanding their markets. The expansion is expected to go beyond the boundaries of the countries of origin of those businesses. The whole world comprises of different nations with different cultural backgrounds. On the other hand, communication is central to the day to day running of businesses. In order to win a customer’s attention in your product, there is the need to establish polite and gainful relations with the customers that are made through communication. Organizations in the Aviation industry are some of the organizations that expect to deal with different cultures most of the times since they offer their services across the world. Therefore, these organizations are characterized by intercultural communication within the organizations themselves and also with their customers. Intercultural communication is a form of communication used to share information throughout different social groups and cultures. According to Pillar (2011), intercultural communication describes communication procedures and problems that naturally appear within societies that are composed of people from different ethnic backgrounds. Intercultural communication is helpful in business since it builds cultural intelligence in customer service and other business communication practices (Knapp, 1987). The study will help in developing an understanding of intercultural communication in the aviation industry in the United Arab Emirates (UAE). The understanding will help in fine tuning the customer service towards meeting customer requirements.
Purpose of the study
The main purpose of the topic is to see the communication in regard with intercultural communication within organization in UAE. Private aviation organizations in the UAE include Empire aviation group, Dana ExecuJet, Gama Aviation, Medex Aviation, Prestije Jet, Emirates Aviation Services, FJR Private Flight. To ease the analysis, three private aviation organizations Aerovista, Emirates Aviation Services and the Etihad will be chosen in this research . The paper aims at finding out the effectiveness of internal intercultural communication in the United Arab Emirates Aviation industry.
Rationale of the study
The study is important since UAE is multi-cultural, and her aviation industry comprises of people from various cultural identities. Therefore, effective inter-cultural communications are important for the industry to function properly. The study will help in understanding the most commonly used mode of communication within the UAE. It will also generate more knowledge on the reasons for the commonality of a certain language or mode of communication. The cultural group with the largest number of customers will also be identified. The question of the way communication is carried out between the UAE aviation companies and their clients and .
The document provides background on Luiss Business School's (LBS) strategy to understand companies' changing needs in terms of managerial competencies. It summarizes LBS's history and current programs. It then outlines the external factors like economic/demographic changes and globalization that are shaping business needs.
LBS's strategy focuses on innovation, internationalization, and public sector management. It aims to balance academic research with practical training. Interviews with companies revealed demands for skills like entrepreneurship, managing multicultural teams, and adapting to an aging workforce. This input will inform potential revisions to LBS's MBA program to better serve companies in the changing environment.
You have asked people to rate a product on a 1 to 10 scale. You ha.docxjeffevans62972
You have asked people to rate a product on a 1 to 10 scale. You have divided your results into two samples: people from urban areas, and people from rural areas. You wish to show that there is a difference between the two groups in how they rate the product. You have no prior belief about which will be more than the other, however. The appropriate statistical test in Excel produces the results shown below. Answer these questions:
(a) State the null hypothesis and the alternative hypothesis. Be sure it is clear which you are saying is the null and which is the alternative.
(b) Which statistical test is appropriate? [Your choices are one mean, one proportion, two means for related samples, two means for independent samples, or two proportions]
(c) Can you conclude that there is a difference between the two groups? Explain why or why not.
Introduction
Global leaders are a rising class of leaders that are capable of working in universal and global connections. Introductory exploration demonstrates that global leaders are a remarkable breed with identifiable attributes (Mendenhall, 2013). They have a particular interest in the world and enthusiasm for individuals is not the same as themselves. This hobby motivates visionary activities and associations that encompass national limits. Besides, genuine global leadership perceives the effect of their activities on surrounding groups and the entire society. They comprehend that individual success is subordinate upon the thriving of others and that they assume a part in changing their organizations, as well as the social orders in which they work. Osland, Oddou, Bird, & Osland, (2013) Shows worldwide pioneers conceived, as well as can make. Global leadership gets to be who they are by developing specific methods for taking a gander at the world, contemplating issues and opportunities and acting with respectability in a quest for arrangements. Research demonstrates that global pioneers offer three typical qualities: they have a collective mentality that permits them to unite cross-culture over limits, they are international business people headed to make new solutions and seize opportunities, and they are universal nationals enlivened to add to the groups they touch. Initiative in a various and multicultural environment: creating mindfulness, learning, and abilities (Caligiuri, & Tarique, 2012).
Over the previous decade, global and residential associations have perceived the essential requirement for their leaders to wind up skillful in culturally diverse connections. The move to a worldwide economy and the expanding expansion of the workforce in the United States bolster the progressing requirement for exploration and preparing here. Capable multicultural leaders are vital to an association's accomplishment in the global business sector. Mendenhall, (2013) gave a content understudies in administration or business and can likewise be valuable to differ qualities and improve the diplomatic skill of a.
Understanding International Business in the Context of Cultural LensesIOSR Journals
This paper is based on the premise that for business organizations to succeed in our globalized, competitive international environment without a „globalized‟ culture, business managers need to have a sound and practical knowledge of cross boarder cultures. Believing, as Dewey (1938) long ago recognized that “there is nothing more practical than a good theory”, the paper identified from the professional literature and discussed seven theories of culture. The understanding of these cultural models would help the business manager to become more intelligent, culturally more sensitive to cultural differences, develop cultural competence and became more effective and efficient as he/she works to overcome cultural complexities that can negatively affect business and business profits.
Discovery of key factors that may influence the success of multinational ICT ...Anand Sheombar
This document summarizes a research paper that investigated key factors influencing the success of multinational ICT companies in Base of the Pyramid (BOP) markets in Africa. The research analyzed 10 case studies of ICT projects through literature reviews, case reports, and interviews. Three key factors emerged: 1) BOP strategy and business model, 2) partnerships, and 3) product and service development. The paper argues that successful contributions in developing countries made through ICT depend partly on the health of relationships between partners.
Implication of cultural differences in international projects critique reviewAdib Chehade
The paper “Implication of Cultural Differences in International Projects” is written by Jewels and Albon published in 2013; has been selected to make critique review taking into consideration the rising importance of cultural differences in international projects. In the chosen paper, some gaps exist that have been mentioned. The findings of the paper have been supported, and some have been contradicted by the help of literature that has been done by other researchers. The paper has limitations in term of general application because only one case study has been considered. Considering only one case is not enough to make authentic conclusion, and experts feedback is not taken which again raise the question of the authenticity of the study. Through the critique review effort to make the better conclusion has been done that can be applied to general international projects.
Is there a tradeoff between outreach and sustainability of micro finance inst...Alexander Decker
This document summarizes a study that examines whether there is a tradeoff between outreach and sustainability for microfinance institutions (MFIs) in India. The study uses correlation analysis of data from 85 Indian MFIs in 2009 to analyze the relationship between measures of outreach and operational sustainability. The study finds a weak correlation between average loan size (a measure of depth of outreach) and operational sustainability, as well as between the number of women borrowers (another outreach measure) and sustainability. However, it finds a strong positive correlation between the number of active borrowers (breadth of outreach) and operational sustainability. Therefore, the study does not find evidence of a tradeoff between outreach and sustainability for these
CCM17,2154Cross Cultural Management AnInternation.docxcravennichole326
CCM
17,2
154
Cross Cultural Management: An
International Journal
Vol. 17 No. 2, 2010
pp. 154-169
# Emerald Group Publishing Limited
1352-7606
DOI 10.1108/13527601011038723
Received February 2009
Revised June 2009
Accepted August 2009
Interpretive schemes in
cross-national alliances
Managing conflicts and discrepancies
T.K. Das
Department of Management, Zicklin School of Business, Baruch College,
City University of New York, New York, USA, and
Rajesh Kumar
Division of Strategy, Nottingham Business School,
University of Nottingham, Nottingham, UK
Abstract
Purpose – The purpose of this paper is to propose a framework for understanding how alliance partners
interpret alliance functioning and how these interpretations shape their subsequent behaviors. Also, to
discuss how interpretive schemes in cross-national strategic alliances impact upon the management of the
problems arising from the cultural conflicts and discrepancies inherent in such alliances.
Design/methodology/approach – Proceeding from the notion that interpretive schemes have
important implications for the evolution of cross-national alliances, the paper describes the two
fundamental interpretive schemes that relate to sensemaking – that of sensemaking of and in chaos, and
examines how an appreciation of these interpretive schemes enable us to better manage cultural conflicts
and discrepancies that inevitably arise in cross-national alliances.
Findings – The framework makes clear that the two types of interpretive schemes ! ‘‘sensemaking of
chaos’’ and ‘‘sensemaking in chaos’’ ! need to be appreciated as interpretive frames that are present
among the alliance managers to effectively interact and influence partner firms.
Practical implications – Briefly, the two types of the interpretive schemes call for different strategies
for developing them. Alliance partners embedded in different national cultures rely on interpretive
schemes to make sense of the conflicts and discrepancies that emerge in cross-national alliances.
Originality/value – The paper responds to the need of managers with alliance responsibilities for a
framework to help develop the most effective ways of managing interpretive schemes in alliances for
productive interactions and performance.
Keywords Conflict management, Strategic alliances, Cross-cultural management
Paper type Conceptual paper
Introduction
In this article we analyze the impact of national culture on the dynamics of cross-
national strategic alliances. In recent years alliances have become an important tool in
a firm’s competitive strategy. A large number of these alliances bring together
companies that have been exposed to different institutional environments. These
differences are particularly salient in alliances that have been formed between Western
and Asian companies. In a landmark study, Hamel (1991) observed that Asian firms
out-learned their Western counterparts, and, in the process, strengthened their
competitive position. A classic ex ...
Is commercialization of microfinance responsible for over indebtednessAlexander Decker
This document analyzes whether commercialization of microfinance institutions (MFIs) is responsible for over-indebting their poor borrowers, using the case of the 2010 microfinance crisis in Andhra Pradesh, India. It finds that while commercialization led to exponential growth in MFI loan portfolios, the over-indebtedness was primarily caused by internal inefficiencies and unethical practices of MFIs, such as aggressive lending practices. However, commercialization contributed indirectly by incentivizing MFIs to engage in such practices in order to maximize profits. The crisis highlighted issues with the commercialization of microfinance and the need for policies to ensure sustainability and protect borrowers.
Similar to IMPLICATIONS OF M&AS FOR BANKING INDUSTRY. FROM CULTURAL FIT TO CULTURAL CLASHES (20)
Is commercialization of microfinance responsible for over indebtedness
IMPLICATIONS OF M&AS FOR BANKING INDUSTRY. FROM CULTURAL FIT TO CULTURAL CLASHES
1. IMPLICATIONS OF M&AS FOR BANKING INDUSTRY. FROM
CULTURAL FIT TO CULTURAL CLASHES
Iulian WARTER
“Alexandru Ioan Cuza” University
Faculty of Economics and Business Administration
Iaşi, Romania
iulian@warter.ro
Liviu WARTER
“Alexandru Ioan Cuza” University
Faculty of Economics and Business Administration
Iaşi, Romania
liviu@warter.ro
Abstract
Despite continued global uncertainty, mergers and acquisitions (M&As) in
banking industry remain essential instruments for growth initiatives in the coming
years. Traditional pre-merger planning and analysis usually focus on legal and
financial aspects. Nevertheless, numerous merging banks fail to anticipate intercultural
aspects that could affect the real value of such transactions. However, banks also need
to understand that cultural factors can critically affect the achievability of all planned
targets. Incorporating cultural due diligence into the pre-merger phase of M&As is key
to success.
The biggest challenge in cross-border banking M&As is to know how far to
pursue integration and how far to maintain cultural diversity as a synergy driver. In
some cases, clashes of cultures within the merged entity appear to have been the reason
for bank M&A failure, but few studies have analyzed these specific aspects.
Our paper analyses the intercultural issues impact on the outcomes of
international banking M&As in order to avoid the M&As disasters.
Key words: mergers and acquisitions (M&As), intercultural, cultural
differences, banking industry.
JEL Classification: F23, G34, G21, M14.
1. INTRODUCTION
Not many industries have encountered as much tactical turbulence in
the latest years as has the banking sector. In response to the change of the legal
and regulatory framework, the structure of the banking industry has been
profoundly displaced. The globalization is changing the dynamics of M&As in
the banking sector, linking borrowers and lenders, issuers and investors,
managers and consultants around the world.
Culture has become an integral part of the general discussion on
mergers, and thus a core element of the social construction of the phenomenon
(Gertsen et al., 2004).
2. Increasingly, banks are more interested in cross-border M&A deals,
looking to expand to new markets and access new customers. Whatever the
goals driving a M&A, a successful deal by no means guarantees a successful
integration in the post-merger stage. Merging two different banks in different
countries means merging two different bank cultures. The bank culture defines
its relationship and mode of communication with stakeholders and customers, a
set of behaviors, beliefs and values, how banks operate and predict the risks.
Gesteland (2012) defines business culture as a unique set of
expectations and assumptions about how to do business.
Mergers, acquisitions, joint ventures, and alliances across national
borders have become frequent, but they remain a regular source of cross cultural
clashes (Hofstede et al., 2010).
The bank culture can drive value in a transaction and help meet the
specific transaction objectives but, also, cultural mismatches can threaten the
success of any M&A. Rather than regard it as an incidental consequence of a
M&A, acquirers need to see it as a decisive issue, able to attenuate risk and
drive synergies.
For instance, the story of the rise and fall of ABN Amro Bank, one of
Netherland’s prides of the last century is about cultural mismatches. ABN Amro
was formed through the merger between past rivals ABN Bank and Amro Bank.
The substantial cultural gap between the two banks appeared to be addressed
properly during pre- and post- merger stages, but the difference between ABN
and Amro remained present until the fall of the myth.
It is generally believed that culture plays a determinant role in
investments. Zait et al. (2014) remark that in such operations, meeting among
businessmen, managers and other professionals in the field is, first of all,
meeting in specific circumstances, among more or less different cultures.
For example, when an European bank makes a cross-border acquisition
in an emerging market such as South America, we are dealing with a much
more complex situation and the cultural differences are more difficult to
reconcile against M&A objectives. The differences in norms, language, and
thinking patterns can create more uncertainty and greater potential for
misunderstanding and conflict.
An interesting view (Desai et al., n.d.) shows that research suggests that
up to 65% of failed mergers and acquisitions are due to 'people issues', i.e.
intercultural differences causing communication breakdowns that result in poor
productivity.
2. CULTURAL FIT VS. CULTURAL CLASHES
Corporate culture has definitely become one of the most actively
debated issues distinguishing successful from uninspired performers in the
banking sector. Culture is something every bank has, even if it is weaker or
stronger. It is central to the bank environment in which people have to work.
3. Berkman (2013) contends that in the context of a merger of two
businesses, one of the intangible issues directly affecting the success of the
transaction down the road is whether the business cultures mesh well.
Today’s M&A success rate hovers around 30 to 40 percent, with
clashing cultures cited as at least a contributing factor in most cases. And yet,
despite the lessons of history, many due diligence teams glance past the topic,
preferring instead to focus on items that can be easily quantified (Recardo &
Toterhi, 2014).
In a paper on the relationship between synergy potential and cultural
differences, Weber et al. (2011) reveal that only the fit between the selected
integration approach and the appropriate integration approach, taking into
account the specific level of synergy potential and problems of implementation
due to cultural differences, can minimise the problems created by culture clash
and harness the potential synergy
Shenkar (2012) reveals that the implicit assumption that differences in
cultures produce lack of “fit” and hence an obstacle to transaction is
questionable. First, not every cultural gap is critical to performance. Second,
cultural differences may be complementary and hence have a positive
synergetic effect on investment and performance.
Cultural differences are what the banks consider to be the most
prominent problems when initiating cross-border M&As. In order to have a
successful M&A, the top managers involved need to understand the objectives
of the M&A, the intercultural issues, and the management of human resources
(Warter & Warter, 2015).
The empirical evidence suggests that the culture of a bank can be
strongly influenced by one or more individuals at the top of their financial
organizations, either to push forward and improve upon a culture that already
exists or to radically change it.
Strong leadership can be particularly decisive in M&A, where easy-
going decision-making can obstruct deals and ambiguousness from the top of
the bank can impede or deflect well-defined integration strategies.
Another scholar (Fiordelisi, 2009) claims that on the whole, integration
deals often require that the banks involved in the deal change their corporate
culture: the workforce may have to change their mindset, cultures and
behaviour. In addition, M&A deals involve transformation in the organization
structure and, consequently, power redistribution among the managers of the
two banks: the conflict of interest and loyalty may deter the success of the
M&A deal.
A greater difference in management style may lead to more significant
cultural clashes and to difficulties in the integration. It is therefore important for
foreign acquiring companies to be more cautious in introducing changes in
these two management areas (He, 2009).
Culture clash in bank M&A activity is marked by negative attitudes on
the part of the acquired top managers toward the acquiring top managers. These
4. approaches reduce the engagement of the acquired top managers to successful
integration of the merging banks and impede their cooperation with the
acquiring top managers.
Moreover, when there is intense and frequent contact between the top
managers of banks involved in merger, cultural differences increase the
likelihood of conflict between the two top management teams involved in the
merger.
In a recent paper (Brogiato, 2012) is mentioned that the problems that
can arise in the post-M&A phase are linked with the clash between the two
different organizations.
Cultural clashes may severely damage the joint action and engagement
of the top management that may be significant in determining the success of the
post-merger integration and ultimately the merger itself.
On the basis of their studies, Stahl et al. (2013) showed that four main
unresolved issues were identified: linking pre- and post-merger processes, the
role of culture, the role of prior acquisition experience, and how to assess
performance.
Warter & Warter (2014) conclude that even in scientific research
culture, through the influence on behaviour, attitudes, and positions towards
action is a major factor of facilitating, blockage, success or failure.
When banks with different product offerings merge, the integration
process is less likely to give rise to the need for downsizing, which could result
in loss of human capital and demoralized employees (Kim & Finkelstein, 2008).
In his study on integration in M&As, Whitaker (2012) observes that
culture clashes also make most employees anxious and in many cases downright
miserable.
It is possible that the stereotypical information about how people in
another culture tend to behave might prove to be wrong in a particular setting
and with a particular individual from that culture (Lee et al, 2013).
Yet, the negative impact of cultural differences is thus expected to be
smaller for M&As within the same group of companies (internal acquisition)
than for external acquisitions (Arvanitis & Stucki, 2014).
Rosenbaum & Pearl (2009) believe that the financing team is tasked
with providing an objective assessment of the target’s leverage capacity. They
conduct due diligence and financial analysis separately from (but often in
parallel with) the M&A team and craft a viable financing structure that is
presented to the bank’s internal credit committee for approval.
Other scholars, such as Zander & Zander (2010), consider that it is
imperative to face the complexity of integrating international acquisitions today
while retaining sight of crucial questions such as what type of cultural
differences specifically influence knowledge transfer when opening up the grey
box.
5. Cultural differences give combining firms the opportunity to obtain
distinct routines and capabilities, which can lead to a richer bundle of
knowledge (Reus, 2012).
3. CULTURAL DIFFERENCES: AN ASSET OR A LIABILITY?
There may be distinct beginnings of a bank’s culture, which,
individually or together, can form a strong competitive advantage. Top
management and employees identify with a “proud” history and the cultural
attributes associated with it.
A cultural audit can help the firms anticipate the effect of organizational
cultural differences and adjust the integration process accordingly (Sarala et al.,
2014).
All the difficulties in the M&A stages, especially integration phase,
may be more easily overcome with a strong historical anchor embedded in the
corporate culture. In the case of bank M&A failure, the demoralization effect on
corporate culture can far exceed the direct impact of the failure itself.
Much has been written about the financial, strategic, and integration
aspects of M&A, but the findings are contradictory and the reasons for
variations in M&A performance have remained unclear, probably because of
the focus on pre-merger variables, thereby neglecting cross-cultural conflicts
between people in the post-merger period (Weber et al., 2012).
M&A is a multilevel, multidisciplinary, and multistage process which
requires a pluralist approach, as Warter & Warter (2014) argue. M&A
researchers have focused generically separately on pre-acquisition factors and
post-acquisition influential factors. Neither scholars nor practitioners have a
comprehensive understanding of the factors involved in the M&A process and
their interrelationships.
It is generally believed that strong culture differences between the two
merging banks are negatively associated with merger effectiveness.
Another interesting remark is offered by Walter (2004). He argues that
whereas many of the factors determining whether an M&A transaction in the
financial services sector is accretive to shareholders have been explored
extensively in the literature, little attention has been paid to issues surrounding
corporate culture. This is a “soft” factor that arguably explains some of the
differences observed between expected and actual shareholder value gains and
losses. In some cases, clashes of cultures within the merged entity appear to
have been the reason for M&A disasters. The author concludes that corporate
culture has certainly become one of the most actively debated issues
distinguishing successful from lackluster performers in the financial services
sector
Cultural differences can lead to distinctive effects in merger situations.
On the one hand, a cohesive and powerful culture can be an asset for an acquirer
by making clear what behavioral norms and values will prevail in the merged
bank. On the other hand, a strong culture on the side of the acquirer may make
6. integration more difficult to achieve, especially if the acquired has, also, a
strong culture.
The conclusion of the authors on these contradictory results is that in
essence, cultural differences seem to matter but it is not clear whether these can
be handled in a beneficial way, with some studies showing they can be a source
of competitive advantage and others arguing that too great a difference may
seriously impair mutual understanding and integration (Gomes et al., 2013).
Still others (Weber et al., 2012) indicate that much has been written
about the financial, strategic, and integration aspects of M&A, but the findings
are contradictory and the reasons for variations in M&A performance have
remained unclear, probably because of the focus on pre-merger variables,
thereby neglecting cross-cultural conflicts between people in the post-merger
period.
A more “optimistic” approach (Stahl & Voigt, 2005) consider that
cultural differences can be a source of value creation and learning in M&A, but
they can also create obstacles to reaping projected synergies by exacerbating
social integration problems and diminishing the firms’ capacity to absorb
capabilities from the other party.
Marks et al. (2014) conclude that cultural differences are not
necessarily harbingers of doom in M&A. The authors’ experience with more
than a hundred deals over the past twenty-five years suggests that, when
effectively managed, cultural distinctions can enrich the integration process and
lead to a stronger combination of the two companies.
Although all the mergers are in the same industry (i.e. banking sector)
and the same country, there was evidence of significant cultural differences
between different geographic regions, particularly but not exclusively between
the North and South, which influenced the M&A process (Gomes et al., 2012).
An interesting opinion (Vaara et al., 2013) reveals that special attention
should be focused on how managers may overemphasize the role of cultural
differences and even deliberately blame cultural differences for failure. At the
same time, other causes of integration problems might pass unnoticed and be
left unaddressed.
We agree with Weber et al. (2011) when they show that a chosen
integration approach, based on its specific configurational fit that is congruent
with the three characteristics of each M&A (synergy potential, cultural
differences, and cultural dimensions) can lead the acquiring company to a
superior performance.
4. CONCLUSION
Culture has emerged as one of the significant obstacles to effective
M&A integration.
Foregrounding the cultural differences allows the acquirer to plan
coherent integration strategies to manage the impact of a cultural mismatch and
7. focus resources on the main M&A objective: a stronger combination of the two
banks.
The answers to the questions regarding cultural fit vs. cultural clashes at
the beginning of the integration process will define the real value that can be
extracted from the merger or acquisition and help sustain the balance between
shareholder satisfaction, synergy delivery and customer gladness.
Given that culture will casually obstruct a proposed transaction, it
becomes the responsibility of top management to prevent culture from
undermining their targets. It is vital to avoid stereotypes due to the fact that,
often, banks top managers have a positive expectation of their ability to master
the human and managerial relationships.
It is easy to make the incorrect decisions in the pre-merger stage but
trying to fix a failed integration, in the post-merger stage, is a very difficult task.
Bank management should pay as much attention to some actions during
premerger stage such as:
Cultural due diligence to identify and mitigate immediate cultural risks
Use of cultural differences as a clear driver of value in the transaction
Communication rules to avoid key staff and/or customers’ loss.
The cultural differences can lead to difficulties of communication and
misunderstandings. Hence, persistent communication throughout the integration
stage is an essential part of success in bridging the cultural gap, especially when
attempting to forge a new culture for the merged/acquired bank.
Such a complex activity as a bank M&A, often does not afford the time
for an exhaustive cultural diagnosis or a long-term culture change strategy with
unclear perspectives of achieving desired aims. A more focused approach, based
on identifying the high-risk points in the integration process and putting the
appropriate leaders in place, can help reduce the ways in which culture
amplifies these risks.
The problematic interaction between the acquiring and the acquired
bank (due to cultural differences) or low coordination and collaboration
between top managers and staff (as a result of the culture clash following the
merger) may play a pivotal role in the bank M&A success or failure.
Leaders and managers involved in banking M&As need to identify
integration strategies, in the pre-merger phase, to combine organizational and
national cultures and motivate staff in order to enhance successful M&As.
References
[1] Arvanitis, S. & Stucki, T., (2014). How Swiss small and medium-sized firms assess
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