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Name: SHEN, Hsia-chun

Student ID: 1A152G41-8

HRM Final Report


The M&A of NEC Electronics Corporation (divided from NEC Corporation) and
Tokin Corporation took place in 2002. It also affected the subsidiary in Taiwan that
changed its name into NEC TOKIN TAIWAN CO., LTD. The backgrounds of the
two corporations were both passive components for electronic manufacturing, and the
merger did not cause repeat of the products. For M&A cases, it could be a stable
growing one. This merger was firstly processed by the chairmen of two parent
companies communicating with their own companies’ people. This took a lot of time
and the chairmen faced strong pressure from the opposing opinions. For the
Electronics Department at that time, it meant to be divided from the parent company
and to set up an independent company with another firm.

Even the founders of both companies had common Japanese background,

however, the two companies had formed their own unique corporate cultures through
several decades of development. The Japanese manager of the acquired company had
been staying in Chinese working environment for a long time, so the ideas and
behaviors of him are closer to Chinese style. He had more self-judging ability and his
relationship with workers is more like friends. However, the corporate culture of the
acquiring company tended to be group works. The employees were good at doing
business negotiations by using their group resources, therefore, the characteristics of
the corporate culture tended to be closed and cared more about the classes within the

The acquiring company had considered the organizational culture as the most
important part in the company since the beginning of merger. Even though the
different styles of the leaders, the corporate culture after the merger was supposed not
to have any big problems since both of the companies had belonged to Japanese
groups. As a matter of fact, the characteristics such as the hierarchic and
institutionalized management, the national superiority, the pursuit of high quality

Name: SHEN, Hsia-chun
Student ID: 1A152G41-8

research and development, and the final decision making is group decision
making……all backed up for the anticipation. During the interviews, all of the
respondents thought that the corporate culture of the acquiring company was built on
the base of control and power. The organizational level and the authority were defined
clearly. Most of the nature of the work had been standardized and formulated. In
addition, the respondents all considered the acquiring company as “bureaucratic
culture”. The acquired company had centralized dictatorship management and did not
want to change it, which also belonged to bureaucratic culture. In this case, both the
acquiring company and the acquired company had the characteristic of bureaucratic
culture. Just as the abovementioned, this type of corporate culture was usually built
on the base of control and power, where the organizational level and the authority
were also clear enough for people to follow. And most of the nature of the work had
been standardized. People acted cautiously and conservatively. They tended to avoid
risks and reject to any significant changes. Since both of the companies were
categorized to bureaucratic culture, the integration of corporate culture was much

In some of the M&As, the companies will assign some professional crews or
groups in charge of the integration. Also, it happened in this case. The head quarter in
Japan set up crews in charge of the integration. The crews included: senior managers
in the acquired company, middle and low level staffs in the acquired company, new
managers after the integration, and the M&A team members.

The human resource situations in the acquiring company and the acquired
company were also different before the merger. The acquiring company was actually
just a department divided from the parent company. And the members of it were
mainly business people and business assistants. On the other hand, the acquired
company had been a complete company before the merger. And since they are
responsible for different products, there were not too many repeat positions or
redundant crews. However, layoffs happened after several years due to the
redistribution of the business volume. The manager also reassessed to make human
resources of the two different companies reach a balanced level.

Name: SHEN, Hsia-chun
Student ID: 1A152G41-8

From the M&A case between NEC Electronics Corporation and Tokin
Corporation, we can see that the characteristics of the acquiring company and the
acquired company definitely decide the future direction of the firm after the merger.
What’s more, the corporate cultures may be different even the two parent companies
have the same national background. This may result from the companies’ past
development or the different leadership styles.


Name: SHEN, Hsia-chun
Student ID: 1A152G41-8

Many people may argue that a foreign subsidiary has no reasons to share its own
unique and valuable knowledge with other units of the corporation since there is no
interest teaching others and there may be some competition between these units within
the corporation. These units may complete for resources, or even for survival by the
headquarters’ review. And the subsidiary managers are evaluated only by their own
unit’s performance rather than other units’. However, as we all know, there will be a
benefit of the whole firm if each subsidiary of it could share their own knowledge to
the rest of the corporation rather than to keep them as secret. Therefore, how to shape
a context for knowledge sharing within a firm is an important issue.
For individuals, social status and reputation are important factors for individuals
to share their knowledge with other people. Sharing knowledge with others gives
people better reputation and higher status in the society. In my opinion, these also
work in corporation case. However, there are two questions involved in social status
and reputation. The first one is whether the other unit acknowledge the knowledge
source or not. The second one is whether the top management recognize those who
share the knowledge or not. In other words, knowledge sharing can exist in the
multinational firms where reputations can be built and people know who is sharing
the knowledge.
Norms of reciprocity are also crucial for making knowledge sharing possible. A
foreign subsidiary will be more motivated to share knowledge with others if it knows
that others will reciprocate in the future. As a matter of fact, it takes money and time
to teach and share knowledge with other units. Because of that, a foreign subsidiary
decides whether to share the knowledge or not by a realistic consideration. Therefore,
trust is also important within a multinational firm.
The last but not the least important, close relationships and communication.
Based on some empirical researches, things like interpersonal communication and
communication links between the sender unit and the receiver unit are also the keys
to reach internal multinational corporations knowledge transfer, especially for tacit
knowledge sharing. The lack of wide-ranging communication and direct relationships
among people from different units represses knowledge sharing. On the contrary,
strong relationships between units or departments reinforce it.

Reference: textbook chapter 9