Time to start focusing on smooth M&A transitions
Updated: 2007-06-26 17:32
Baker said that creating a cohesive and capable management team is really a challenge. "This requires significant investment in and focus on cultural integration, team development and joint business planning and needs a great deal of adjustment by both Chinese and foreign managers," he said.
The senior advisor urges partners to create cultural integration program plans and begin leadership development and management integration program "before" the ownership transfer, in a bid to guarantee the immediate implementation and business vision of the leadership team on the first day of the joint venture.
Implementing a corporate culture project as soon as possible and investing in cultural integration for both foreign and Chinese managers are fundamental for a successful amalgamation.
"It is also helpful to provide English language training to all senior Chinese managers and their wives," Baker added.
At the employee level, the MNCs will assess productivity and profitability and reduce the number of staff accordingly.
"Begin your skills assessment immediately after the transfer of ownership so that training programs can be implemented as soon as possible for all high-potential staff and others that you want to retain," Baker said, adding that typically around 25 to 30 percent of staff will need to be removed to meet the MNCs' goals.
Executives should take measures to strengthen communication between staff of partner enterprises and maintain transparency, in terms of objectives of M&A, shareholding structure and future business orientation, to all employees.
A win-win is always an ideal and expected outcome of M&As, which requires the efforts of the two sides on an equal and fair basis, insiders said.
Wahaha and Danone's conflict is not finished, but it should provide lessons to other business involved in M&As. "No matter the final result, it is already a case from which both Chinese and foreign enterprises can draw numerous lessons on how to cooperate and compete," Tang said.
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