Integration Management of Western Acquisitions in Japan

Abstract

In recent years, Japan has seen a sharp increase in foreign cross-border merger and acquisition (M&A) transactions. Among the larger cross-border M&A transactions in Japan, a few multinational companies are already struggling with their acquisitions. In this study, we systematically analyzed and compared the unsuccessful DaimlerChrysler-Mitsubishi acquisition with the successful RenaultNissan acquisition. We collected secondary data and conducted interviews with both Japanese and foreign managers. Despite some similar starting conditions, these acquisitions developed widely divergent outcomes. In this study, we have focused on post-acquisition integration and separated it into human integration and organizational integration. Findings indicate that human and organizational integration are strongly interwoven in Japan, with human integration being a necessary prerequisite for organizational integration. These findings highlight the importance of the human factor in the success of acquisitions. Active communication, participation, assertive leadership, commitment and the creation of a sense of urgency have been found to facilitate human integration. With regard to organizational integration, the autonomy of the integration management and independence from any keiretsu network have been identified as important factors.

The Challenge of Integration: A Review of the M&A Integration Literature

“…; Ellis et al . ; Froese and Goeritz ; Piske ; Schweiger and DeNisi ; Searle and Ball ). Distributional justice refers to equality between the involved firms, but is a double‐edged sword.…”

“…While research has found that differences in national culture can affect the integration positively as well as negatively, differences between the organizational cultures are often harmful (Cheng and Seeger ; Froese and Goeritz ; Pepper and Larson ; Vaara ; Vaara et al . ).…”

“…Managing the acculturation process is particularly important in the case of large cultural differences (Barmeyer and Mayrhofer ; Choi et al . ; Olie ) and strong hierarchies (Barmeyer and Mayrhofer ; Froese and Goeritz ), but the possibilities for managers to do so are limited (Quah and Young ; Riad ). The process of acculturation, caused by heterogeneous organizational or national cultures, requires substantive change in values, beliefs and attitudes as well as in the social identity of the employees involved, possibly resulting in acculturative stress, difficult communication and collaboration, low employee retention, resistance to change and other frictions (Frantz ; Larsson and Lubatkin ; Lupina‐Wegener ; Nahavandi and Malekzadeh ).…”

International human resource management of Japanese multinational corporations: Challenges and future directions

“…Born-global firms from Japan would be less constrained by the Japanese context, and thus their IHRM could be quite different from that of traditional Japanese MNCs. As for cross-border M&A, we know little about what happens in IHRM if a Japanese firm is acquired by a foreign MNC (Froese and Goeritz, 2007), or if Japanese MNCs acquire and integrate foreign firms.…”

Success and failure in managing foreign acquisitions in South Korea and Japan: Lessons from Renault, General Motors, and DaimlerChrysler

“…In addition, as Renault successfully integrated Nissan in Japan (see Froese & Goeritz, 2007) and shortly thereafter Samsung in Korea, it will show why Renault has been successful in integrating target companies. Finally, it will compare cross-border acquisitions in Japan with those in Korea.…”