Role of Global Managers in Mergers & Acquisitions with relation to

Cultural Integration
Rukmani Seth1
Pallavi Sridhar2

Abstract:
Mergers and Acquisitions have become the order of the day in the business world during recent
times mainly for growing in the global market. Success of a merger essentially depends on
execution of the integration plan which necessitates the evolution of the human side of
integration. Thus, Human Resource Management and Development plays a crucial role in a
successful merger. Issues such as human resource planning, compensation selection and
turnover, performance appraisal system, employee development and employee relations ideally
ought to be addressed by the Human Resource departments. With M&As especially at the
international level, a global vision is required in order to break down geographic and competitive
boundaries. Thus, the role of a global manager comes in. There is a need for the right human
resource strategies to give global managers the tools and support they need to make the merger a
success.
The aim of this paper therefore, would be to establish the crucial role played by the HR managers
aligned with that of a global manager during M&As and trace the depths to which their roles
penetrate in achieving a successful merger especially when international mergers are on the rise.

Introduction:

“It’s the people that build organisations and strategies made without keeping them in mind can
be fatal for its future. Integration and transition challenges have the capability of making or
breaking M&A deals” – Hewitt Study

Global Management is a capability that multinational businesses value and need in the
international marketplace. Companies that operate across international borders need executives

1
Studying in 4th Year, Business Law Hons, B.B.A LL.B(Hons), National Law University, Jodhpur
2
Studying in 4th Year, Business Law Hons, B.B.A LL.B(Hons), National Law University, Jodhpur

Electronic copy available at: http://ssrn.com/abstract=1729634

and managers who understand cross-cultural customs and business practices and how to promote
efficiency and optimize profitability in a global environment.3
Global Management has an indisputable significance in cross border Mergers and Acquisitions
(M&A). The dynamics of M&As may give an impression that the merger between two
companies concludes successfully when all the financial aspects and all the legal requirements
and documentation have been fulfilled. However, success of an M&A essentially depends on
execution of the integration plan which necessitates the evolution of the human side of
integration. Thus, Human Resource Management in M&As plays a crucial role in its success.
From the due-diligence stage through the identification and appraisal of people to the
management of culture issues and communication, people issues impact every step along the
way. Such issues are essential and integral to the process and must not be treated as an
afterthought. It's unrealistic to assume that one business can absorb another without being
altered. When two companies merge, one may change more than the other, but both will change
and most often than not, the Human resource department will have to address this change. The
dynamics get more adverse and complicated when the M&A is cross border in character.
Dimensions such as legal, cultural, financial, employment systems, economic organization and
control and corporate governance regimes differ in varied proportions in every country.
Interestingly, each of these dimensions has an implication on the human resource of the
organizations involved. Thus, integration is the most critical phase in an M&A and the most
apparent problem that has to be overcome is cultural variation. It is the role of a global
management team to integrate culturally diverse organizations without the impact of a culture
shock.

The Concept of Global Management:

There can be no one “Universal Global Manager”. In fact, companies that engage in mergers and
acquisitions at an international level require three kinds of specialists – business managers,
country managers and functional managers and the corporate manager to supervise them all.4

3
http://degreedirectory.org/articles/What_is_Global_Management.html (Visited on 20 August, 2010)
4
Christopher Bartlett, Sumantra Ghoshal, What is a Global Manager?, Harvard Business Review, 2003, pp. 101-
108,

Electronic copy available at: http://ssrn.com/abstract=1729634

Business managers are the strategists, architects and coordinators. Their aim is to strategize in
order to further the company’s global-scale efficiency and competitiveness. Thus, it becomes
important to coordinate activities and link capabilities across barriers. Therefore, he has to
achieve an efficient distribution of assets and resources while protecting the competence at hand.
Country managers are the sensors, builders and contributors. He ensures presence of sensitivity
and responsiveness towards the local markets despite an international presence. The need for
local flexibility may put the country manager in conflict with business manager. Thus, global
management is about preventing the same. If the country manager is given the requisite
opportunity to identify and take steps to hone the skills by identifying the core competence of the
employees of that particular country, it can lead to fruitful results. For instance, for Phillips, its
first color television was made in Canada, stereo model in Australia and tele-text in the United
Kingdom.5
Functional managers are scanners, cross-pollinators and champions. At a time when information,
knowledge, and expertise have become more specialized, an organization can gain huge benefits
by linking its technical, manufacturing, marketing, human resources and financial experts
worldwide.6 He can transfer piecemeal information into strategic intelligence. It therefore,
becomes all about ensuring a continuous communication between all concerned people at various
levels across countries.
Corporate managers are leaders, talent scouts and developers. They integrate the many levels of
responsibility, playing perhaps the most vital role in transnational management. They balance the
negotiation between the above three managers and develop them as well. Thus, they work
towards aligning all cross-border strategies.

Human Resource Management and Cross Border M&As:

Human Resource Management (HRM) has the potential to play an important role in M&A
integration, by managing personnel conflict, reinforcing the new HRM system and corporate
culture and providing leadership and communication to reduce turnover. The role of HRM in an

http://www.business.illinois.edu/aguilera/Teaching/Bartlett%20Ghoshal%20What%20is%20a%20global%20manag
er%202003.pdf (Visited on 20 August, 2010)
5
Id. p. 105
6
Supra Note 2. p. 106
M&A will be conditional upon the strategic rationale chosen by the merging firms. In particular,
HRM strategies in the integration stage of an M&A should be tightly aligned to the undertaken
M&A strategy in a manner that enhances the likelihood of successful M&A outcomes – this is
known as the strategic fit between M&As and HRM.7 Most M&As aim to retain key talent,
capture market share, or diversify into new markets. Strategies behind an M&A can be with
regard to creating more efficiency by eliminating excess capacity; partly the human resource,
expanding geographically by acquiring smaller companies across the world and retaining local
managers, expanding product lines by acquiring companies which have related production,
gaining access to new R&D knowledge or technological capabilities by acquiring innovative
firms rather than producing the knowledge in-house and creating a new industry from existing
industries whose boundaries are eroding.8 Such a merger with or an acquisition of an
international firm with an objective of improving both effectiveness and efficiency in the global
marketplace will require a focus on the developmental practices of human resources, which
would include effective leadership structure, mentoring, training and creative compensation
incentives with special consideration to cultural differences among other things. Underestimating
or failing to address basic HR challenges that arise during merger or acquisition leaves
companies vulnerable to legal incompliance, exposed to potentially large hidden costs and
undeclared expenditures and at huge risk of losing key employees.9
M&A activity presents a different set of challenges for the human resource and global managers
in both organizations. The merger activity is found to have serious impact on the performance of
the employees during the period of transition. It leads to stress on the employee caused by the
differences in human resource practices, uncertainty in the environment, cultural differences, and
differences in organizational structure and changes in the managerial styles. Thus, the
fundamental tension in modern global management as regards cross border M&A is the need to
standardize organization design, systems and procedures10 especially in the sphere of HRM.

7
Ruth V. Aguilera, John C. Dencker, The role of human resource management in cross-border mergers and
acquisitions, Int. J. of Human Resource Management, 15(8), December 2004, 1355–1370
8
Bower, J.L., Not all M&As Are Alike and that Matters, Harvard Business Review, Reprint R0103F (2001)
9
Hewitt Associates Asia-Pacific Business Head Consulting Analytics Nishchae Suri
10
Leon Gettler, The New Global Manager Needs To Understand Different Work Cultures, The Age, February 6,
2008, http://www.theage.com.au/business/the-new-global-manager-needs-to-understand-different-work-cultures-
20080205-1qcq.html
Common Problems faced in the HR front in cross border M&As:
A global manager will have to look into the following issues while effecting a merger or
acquisition11:
1. Cultural Shock: The exposure to a new culture during mergers leads to a psychological state
called culture shock. The employees not only need to abandon their own culture, values and
belief but also have to accept an entirely different culture. This exposure challenges the old
organizational value system and practices leading to stress among the employees. Dissimilar
cultures can produce feeling of hostility and significant discomfort which can lower the
commitment and cooperation on the part of the employees. In case of cultural clash, one of the
cultures i.e. dominant culture may get preference in the organization causing frustration and
feelings of loss for the other set of employees. In case of hostility in the environment the
employees of two organizations may develop “us” versus “them” attitude which may be
detrimental to the organizational growth.
According to a KPMG12 study, 83% of all mergers and acquisitions have failed due to failure to
address problems of cultural differences.13 An instance is the failure of Wal-Mart in Germany
primarily due failure to address the contrast in the cultures followed in U.S and Germany.14 Even
the Renault-Nissan merger was going to suffer the same fate; however, on realizing the problem,
they rectified it and once again were on a profit-making path.15

2. National difference across market economies: Problems in this arena arise when two firms
of equal stature in their home countries integrate. This aspect of a merger would be best
understood by illustrating the Daimler Chrysler merger. Daimler-Benz (German) paid executives
much less than did Chrysler (American), making it necessary to adjust the various performance

11
Amit Pande & Sandeep K Krishnan, Knotted forever, http://stdwww.iimahd.ernet.in/~sandeep k/merger.pdf
(Visited on 20 August, 2010)
12
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services,
http://www.kpmg.com/global/en/Pages/default.aspx (Visited on 20 August, 2010)
13
Gene Gitelson, et. Al, The Impact of Culture on Mergers and Acquisitions,
http://www.itapintl.com/facultyandresources/articlelibrarymain/the-impact-of-culture-on-mergers-a-
acquisitions.html (Visited on 20 August, 2010)
14
Andreas Knorr et. Al, Why Did Wal-Mart Fail In German?, Institute for World Economics and International
Management, http://www.iwim.uni-bremen.de/publikationen/pdf/w024.pdf (Visited on 20 August, 2010)
15
http://www.worldservicesgroup.com/presentations/paris/Presentation%20for%2011%20April%20final%20pres
entation.ppt (Visited on 20 August, 2010)
systems. The acquired firm belonging to a coordinated market economy like that of Germany,
was rigid to any change. Daimler executives felt that it would be impossible to raise the pay of
German executives to the level received by the American executives, in no small part because of
pressures that would arise from German works councils. Also, Daimler had a bureaucratic
organization that relied heavily on rules and procedures to manage employees. By contrast,
Chrysler had a more decentralized decision-making apparatus and was more flexible. The worst
of the problems arose when there begun severe communication problems between the two firms.
Daimler Benz failed to convey their intention to handle the top management on their own,
causing many executives to leave midway due to pent up misunderstanding, thus, highlighting
the role of both trust and communication in the merger process, particularly in M&As across
market economies.16

3. Altering the size of Employment: HR issues are critical when it comes to downsizing the
firms to ascertain the appropriate employee strength. If the merging companies are related, even
the top management have to face the axe as the arena of functioning is similar for which a wide
management may be unnecessary.17 Retention issues may be a cause for discomfort depending
upon the national context. Liberal Market Economies have fewer institutional constraints as
compared to Coordinated Market Economies which in contrast, offer greater legal protection to
employees and also possess a long-term view of employment relations among actors in these
labour markets.18 Retaining and inducting employees is also of supreme importance especially
when firms are acquired in pursuance to expansion and gaining access to RnD. For example, in
Microsoft’s purchase of the Japanese firm TITUS, Microsoft strongly supported the management
team they acquired, with a similar outcome in Cisco System’s acquisition of the Israeli firm
Pentacom. Mergers may not give the acquiring firm time to assimilate and systems must fall on
track immediately. One firm that does an exceptional job in assimilating new employees is Cisco
Systems. It disregards integration costs in order to assimilate the right employees and is also

16
Vlasic, B. and Stertz, B., How Daimler–Benz Drove off with Chrysler. (New York: Morrow, 2000)
17
Walsh, J.P., Top Management Turnover Following Mergers and Acquisitions, Strategic Management Journal, 9
(1988), 173–83
18
Child, J., Faulkner, D. and Pitkethly, R., The Management of International Acquisitions (Oxford University Press,
New York, 2000)
willing to pursue a hands off policy with respect to certain practices if the systems of the
acquired firm are superior to those of Cisco.19

4. Variance in organizational structures: Since the organizational structures are different,

different designations for the employees are used. During the integration of acquired
organization the acquiring organizations need to develop a mechanism to remove the differences
in the grading systems bring them at equal level, as many a times the compensation is related to
the grade of employee in the organization. Merger of Daimler and Chrysler is one of the most
prominent examples of a failed merger on account of difference in the organizational structure.20
While one was more formal and planned out, the other had a stress free, unrestrictive style.21
Wal-Mart's German debacle is an appropriate example to elucidate this point. Many German
Walmart chain outlets were brought and a successful U.S. Executive was sent over to Germany
to manage affairs in a similar fashion. Unfortunately, the chain had to close down in less than 10
years and the loss is majorly attributed to the almost complete absence of cultural integration in
the sphere of organizational structure. The U.S. methods of leadership and relationship building
with customers failed to work in the terrains of Germany. German employees believed in a
respectable and unapproachable manager who was the top of hierarchy rather than a manager
who would pep talk the sales-boys every morning. The no dating policy among the employees
brought in a lawsuit against the company. German Customers felt a huge intrusion into their
privacy when sales persons would drip sweet language in their greetings and their persistent offer
to help the customers with their bags.22 These and other culture clashes made for unhappy
employees, few repeat customers, and a dismal bottom line.23

5. Employee Relations: When two organizations come together via a deal, it needs to be
ensured that steps are taken to bring together the employees of both organizations. Equality
19
Ibid
20
T. Malikkarjunappa et. Al, Why Do Mergers and Acquisitions Quite Often Fail?, AIMS International, 1(1),
January, 2007, pp. 53-69 at 62.
21
Niyati Ojha, Failure Mergers, http://jurisonline.in/2008/11/failure-mergers/ (Visited on 20 August, 2010)
22
Charlene M. Solomon and Michael S. Schell, Managing Across Cultures: The Seven Keys to Doing Business with
a Global Mindset,(United States of America, 2009)
23
Anne Fisher, How to be a better Global Manager, Fortune Magazine, July 9, 2009,
http://money.cnn.com/2009/07/08/magazines/fortune/how_to_be_better_global_manager.fortune/index.htm
needs to be the key. For example, the acquisition deal between Kraft and Cadbury has seen lot of
bumps on account of the dismissal of various key employees of the latter by the former.24 On the
other hand, Infosys Australia has a good experience. Infosys redefined the Australian notion that
there is only way to manage. Infosys Australia arose out of a fully owned Australian business
after it was acquired by Infosys Technologies in 2004. The company initiated programs to make
its Indian and Australian employees to understand how to work with one another. Infosys based
its program on the work of Dutch management theorist Dr Geert Hofstede. Sean Fernando,
Infosys Australia general manager of human resources, said the research identified three critical
areas of difference between Australians and Indians: uncertainty avoidance, dealing with
authority and decision-making. While Australians required high level of certainty even with
regard to travel plans, Indians did not mind uncertainties and took to the attitude that “they can’t
control everything in life”. In dealing with authority, while Indians preferred taking instructions
from their leader in the team, Australians preferred consultation. The training program brought to
light these differences enabling the employees to consciously work upon it.25

General Role of HRM in M&As as part of Global Management:

The tasks related to M&A can be divided into pre-merger, merger and post-merger activities and
the following key HR initiatives:26
1. Development of preliminary organizational designs and identification of the top three levels
of management
2. Assessment of critical players and deployment of appropriate resources in the new company
3. Retention of key people and separation of redundant staff
4. Development of an integrated rewards strategy for the combined companies
5. Communications strategy, development and implementation
6. Integration of payroll benefits and Human Resource-Information System

24
Stephen Huard, Mergers & Acquisitions - An Opportunity To Improve Employee Relations or Pull off Some Krafty
Moves?, Employment Law News, http://www.clarkslegal.com/Article/548 (Visited on 20 August, 2010)
25
Leon Gettler, The New Global Manager Needs To Understand Different Work Cultures, The Age, February 6,
2008, http://www.theage.com.au/business/the-new-global-manager-needs-to-understand-different-work-cultures-
20080205-1qcq.html
26
http://findarticles.com/p/articles/mi_m4467/is_10_54/ai_66499153/pg_7/?tag=content;col1 (Visited on 20
August, 2010)
Effecting the Change:27
In the pre-merger state, the first step is the identification of a team leader who can guide the
company through the contract. This is where the role of the country manger comes in. The HR
has to conduct:
a) A due diligence study involving scrutinizing the organisational culture of the companies
involved and analyze the outcome of the new mould. This is crucial when cross border mergers
are involved as the smooth blend of the two cultures is inevitable for the victory of the venture.
b) An evaluation of the employee compensation and severance policies, the industrial relations,
labour laws in the concerned countries regarding compensation and severance of contracts and
the existing HR policies has to be conducted.
c) An investigation into the existing employee litigations and their possible outcomes before the
finalization of the deal.
d) An identification of the key talents is a major task at this stage as this decides the organization
structure and employment policies of the new firm.

On the merger, the HR has to appoint an integration manager who is capable of taking up the
job of easy transition. This is where the corporate manager coordinates the efforts between the
country and business manager.
1. He has to create a new organization structure deciding on the key players of the top
management.
2. He has to create the company policies and remuneration structure taking into account the
labour laws prevalent in the country. The new structure must be capable of retaining the key
players wiping out their sense of insecurity. The degree of insecurity will be more in cross border
mergers.
3. The retention plans can be structured only after the identification of the key players. The
merger might follow a policy wherein the employees are terminated from the service over the
period of months.

27
http://www.chrmglobal.com/Articles/520/1/HR-Activities-In-Mergers-And-Acquisitions.html (Visited on 20
August, 2010)
4. The HR has to then take measures to give advance notice to the employees whose service will
be terminated. Removing the fear is crucial as it can otherwise impact the performance
adversely. A well defined plan must be communicated to all the employees for smooth
changeover.
5. Cross culture training and joint workshops must be conducted to help the employees in having
an insight to each others’ work styles.

The post merger activities include proper evaluation of the new culture and identifying the
loopholes and taking corrective action. Keeping watch over the employees can guide the HR in
solidifying its policies relating to leadership and employee retention. Measures to strengthen the
employee relationships and improving their performance must be undertaken by the HR in the
post merger period. This is where the functional manager plays a key role ensure timely
dissemination of information.

Importance and Implications of Cultural Integration in Cross-Border

Mergers and Acquisitions:
What global managers need in dealing with cultural integration in cross-border M&As is the
awareness of the vast cultural differences in their business places, the understanding of difficulty
in managing employees across borders and adequate tools to help them succeed in this endeavor.
Cultural due diligence has become a very significant requirement. It has emerged as one of the
dominant barriers to effective integrations. In one study, culture was found to be the cause of
over 80% of failed integrations.28 Culture is the long-standing values and unwritten rules that
shape employee attitudes and behaviors. The implications of culture include its implicitness and
resilience, how it shapes attitude and influences people’s behavior. Thus, the global managers
should develop a global mindset to begin with i.e. a thought process which is cross functional
and cross organization enabling a boundary less organization.

28
Isaac Dixon, Culture Management and Mergers and Acquisitions, Society for Human Resource Management case
study, March 2005
There can be various methods to culturally integrate29 like localization wherein the subsidiary
unit acquired in the other country is considered to be a separate entity and the strategies and
decisions of the subsidiary are made according to the local conditions without interference from
the core company. Another method is to Transplant the culture of the parent company. In this
model, the parent company appoints its people to manage the target company in order to
guarantee communication between the parent and subsidiary, and the parent supervises and
controls the subsidiary this method calls for a good global manager. The third model is cultural
innovation by integration. In this model, the cultures of parent and subsidiary companies coexist;
a new culture and management pattern are formed through the integration of the two cultures and
providing an opportunity for maximizing cultural innovation.

Cultural influences during an integration effort have the potential to be broad and far reaching.
Broken into these dimensions, it’s easy to see the role culture plays in issues that quickly affect
the bottom line and integrations that fail to achieve desired synergies. By understanding the
similarities and differences between the two companies early in the game, it is possible to avoid
a divorce before the marriage vows are taken. Should incompatibility be too great, it may even
be wise to call off the wedding. Thus, the global management seeks to reconcile the following
issues between organizations to culturally integrate them:
1. Decision-making Styles: While one organization engages in decision-making process
through consensus, the other may do so through a top-down model. Such a difference can lead to
slow decision-making, failure to make decisions, or failure to implement decisions and all during
a time when rapid decision-making is imperative. Customer and employee loyalty can erode
quickly if a company is perceived as unable to make decisions. The HP-Compaq merger still
suffers due to improper reconciliation with regard to such differences.

2. Leadership Style: The style could vary from being dictatorial in one and consultative in the
other organization or clear or diffused. A shift in leadership style can generate turnover among
employees who object to the change. This is especially true for top talent, who are usually the

29
Zhanwen Zhu, Haifeng Huang, The Cultural Integration in the Process of Cross-border Mergers and
Acquisitions, International Management Review, 3(2) (2007)
most mobile employees. The HP-Patagonia merger suffered from the problem of the former
having a traditional leadership style contrary to the latter.30

3. Ability to change: This refers to the willingness to risk new things, compared with focus on
maintaining current state and meeting current goals. Differing attitudes and aptitudes toward
change can cause unwillingness, resistance, or passivity when it comes to implementation of new
strategies and working through the inevitable difficulties of creating a new company.31

4. How people work together: This varies based on formal structure and role definitions or is
based on informal relationships. If the values and behavior of newly merged or newly connected
functional units are inconsistent, then processes and handoffs may break down with each unit’s
employees becoming frustrated by their colleagues’ failure to understand or even recognize how
work should be done. The Stud Backer-Packard merger failed on account of problems in this
regard.32

It's important to identify cultural areas of dissonance so that people can dispel misconceptions
and begin creating a culture that's right for the new organization. That's often left until after the
merger is finalised, which is risky because culture mismatches can be the Achilles' heel of many
deals.33 One can't consider culture compatibility without touching on the different views that the
acquirer and the acquired have about the new company. The acquirer assumes that the new
company will closely resemble the original but with greater mass and capabilities. The acquired
company expects that many of its strengths will be crucial to the new company. However, that is
not the case and thus, this needs to be addressed.

Skills that a Global HR Manager needs to possess for an effective M&A:

30
Knowledge Warton, HP and Patagonia- Two Similar, Yet Different Leadership Styles, http://knowledge.
wharton.upenn.edu/article.cfm?articleid=1153 (Visited on 20 August, 2010)
31
X Song, Why Do Change Management Strategies Fail?-Illustrations with Case Studies, Journal of Cambridge
Studies, 4(1), 2009 pp. 6-15
32
Varsha Virani, Mergers and Acquisitions-A Case of System Failure, http://www.indianmba.com/Faculty_Co
lumn/FC632/fc632.html (Visited on 20 August, 2010)
33
Prof. Harshada Mulay, Maximizing Deal Value Role of Human Resources in Mergers & Acquisitions,
http://www.indianmba.com/Faculty_Column/FC470/fc470.html (Visited On 20 August, 2010)
 Success in achieving the firm’s objectives cannot be realized without systematically studying and
understanding the cultural environment within which they operate.34 By using the appropriate
behavior in the corresponding cultural environment, global managers can enhance subordinate
motivation, which, in turn, can lead to organizationally desired outcomes such as enhanced
performance.35 A research paper of the Harvard Business School36 elucidates the soft skills to be
possessed by global managers to effectively manage cultural change. They can be summarized as
follows:
i. “Letting go of the headquarters mindset” - Mary Teagarden, an academician, suggests that
most global corporations suffer from what is called a “headquarters mindset” whereby
companies assume that they can do things abroad in the same manner as they do them
domestically. She says that organizations need to ensure that prospective global managers
should have the opportunity to build a basic understanding of the new cultures in which they
will be immersed so as to realize what differentiates people and what unites them. This quality
would prove to be critical especially in cross-border mergers.
ii. “Working around the differences that matter” - Footwear industry veteran Pat Devaney, a
senior vice president of production, sourcing, and development for Deckers Outdoor, Inc.,
emphasizes that understanding how people think, work, eat, and interact in a foreign
workplace is crucial to building a successful operation. Global Managers need to be well
prepared for these cultural nuances. They should be able to perceive how the employees from
a different culture will receive information and interpret it back for those who work for them.
iii. “Openness to new ideas” – Globalization is not a one-way street. International managers
should be integrated to develop global expertise. They should be ready to try and implement
ideas suitable in one country into another country with the adequate amount of changes
paying heed to the local environment. Teagarden also emphasizes on cross fertilization of
global mangers in different national environments to help them appreciate and incorporate
good management and good business from those varying environments.

34
Larsen, Trina, Bert Rosenbloom, Rolph Anderson., and Rajiv Mehta, Global Sales Manager Leadership Styles:
The Impact of National Culture, Journal of Global Marketing, 13(2), 1999, 31-48.
35
Adler, Nancy J., International Dimensions of Organizational Behavior, (Cincinnati: South-Western/Thomson
Learning, 4 th edn, 2002)
36
Building Better Global Managers, Harvard Management Update, 11(3), March 2006.
iv. “Ability to balance consistent corporate practices” – A company while globalizing has to
induce its corporate philosophy into the new market while respecting the existing regional
uniqueness. Companies should ensure that their global managers neither approach the new
market with their own stereotypical corporate philosophy nor succumb to cultural
intimidation. Teagarden suggests that the new manager's global assignment should begin by
having him work on a virtual team—that is, managing an overseas process or project while
still being stationed in one's home country.
v. “Emphasizing the importance of Emotional Intelligence”- . Emotional intelligence as a social
skill may be critical to effective global leadership. This skill is an ability to find common
ground and build rapport with others.37 It is necessary for international business operators to
acquire the knack for developing good relations with the influential and effective people in
other countries. Companies seeking to strengthen their international leaders’ effectiveness
may consider utilizing training programs directed at this particular leader attribute. Scholars
and practitioners alike have called for emotional intelligence training to help employees
recognize the underlying elements of cultural differences and backgrounds38
vi. Other general skills: On a general basis, global managers should also develop para-
managerial skills such as self motivation and resilience to face disappointments constructively
in a foreign atmosphere, the psyche of looking at problems as opportunities and challenges
and an insatiable appetite for learning, flexibility, and openness in order to succeed as an
efficient global manager.39

Conclusion:

The issue of HRM in a cross border M&A is an issue of global management and is succinctly put
by S. Devarajan, Managing Director of Cisco Systems Global Development Center in Bangalore,
India. He says,

37
Anne H. Reilly, Tony J. Karounos, Exploring the Link between emotional Intelligence and Cross-Cultural
Leadership Effectiveness, Journal of International Business and Cultural Studies, 1, February 2009
38
Ilangovan, Aarthi, Wesley A. Scroggins, and Elizabeth J. Rozell, Managerial Perspectives on Emotional
Intelligence Differences between India and the United States: The Development of Research Propositions,
International Journal of Management, 24(3), 2007, 541-548.
39
Dr. Adalat Khan, Global Management Skills, American Chronicle, July 31, 2007
"Managing in a global environment means you manage people who are separated not only by
time and distance but also by cultural, social, and language differences. The main challenge
here is to integrate and coordinate these individuals in ways that will ensure success. You need
to build a relationship and have frequent interaction and communication among your team
members".

The idea of this paper was to essentially bring out the importance of understanding the existence
of cultural variation and the need and ways to go about culturally integrating two firms which
come together in a cross border merger or acquisition. Though there is no empirical evidence,
scholars attribute maximum importance to human resource management during M&As to make
it a success. Existing patterns show that very few firms which integrate give HRM its due
importance. Though an M&A is motivated by strategic reasons, ultimately, it’s the strength of
the human resource which can pull it through.