CHINESE LEADERS NOW HAVE ONE THING IN MIND. They want TO BELONG TO THE FORTUNE 500 WORLDWIDE LEADING GROUPS.

    The race has started and they go out with different strategies:

- TCL’s Chairman Li Dong Sheng and Jason Sun, Cellon’s chairman went the cross border acquisition route in acquiring European companies

- Dongfeng Motor’s CEO Miao Wei, whose very large group was in a different situation, has chosen to invite a successful foreign company, Nissan Motor, to share 50 % of its equity. The declared intention there is to promote the adoption of best management practices and provide a strong performance orientation for the benefits of all stakeholders.

- A third route in a Service business has been recently followed by China Southern Airlines’Chairman Yan Zhi Qing who will probably join the fast growing SkyTeam Alliance created by Air France, Delta and Korean Air.

Why corporate culture aspects are so important?

    So far experience shows that more than 50% of these cross-border mergers and acquisitions lead to disappointments: reshuffling of the management teams, change of CEO, and finally sell off or dismantling of the entity. Leading CEO’s (among others Jack Welch from General Electric, Carlos Ghosn at Nissan in Japan) point out the first and foremost reason being the ‘corporate culture’ problems, and the second reason the lack of a proper integration strategy. The problem actually results from the combination of two key aspects: the impact of change, which is vastly underestimated and a clash of the respective cultures of the corporations involved.

What are the difficulties that Chinese leaders will find on their way?

    Two typical symptoms characterize the “post-merger blues” phase:
- the departure of key people, or even entire teams
- secondly the drop of motivation and performance.

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