The Pros And Cons Of Cultural Integration

We can assert that this merger has been a success in terms of cultural integration. Of course there have been some problems, for instance on the financial field, but we will assume for this work that the cultural one has to gather our research.

Why has it been a success? To briefly sum up the background of this merger, two companies from each "world" (the Old one for Arcelor and the New one for Mittal) decide to gather their skills their infrastructures, their workforce to be smarter and more powerful into this hypercompetitive (D'Aveni, 1997) and global steel market. Several main reasons can explain this achievement, and we will deal with these in this part.

First and maybe the number one reason why it succeed, Arcelor and Mittal are both

To break down this cultural integration plan, we can begin with the first analysis: before doing anything, companies have to analyze and understand existing cultures, the European one and the Indian one (even if, as we say, both companies were a synergy of several embedded cultures). At this time, a cultural due diligence (also called an audit) is required to define possible cultural barriers, such as languages, habits, values and so on, but also differences in communication (the way a Frenchman talks can be very different from an Indian, even if they want to say the same thing). This part was handled towards all ArcelorMittal workforces,

Hence the fact that business opportunities are the first motivation: Shimizu, Hitt, Vaidyanath and Pisanto (2004) defined cross-border mergers as a way to get into foreign markets. Mittal Steel Company wanted to buy out Arcelor especially to settle in Western Europe, while it invested first in Poland. This reason explains why it was interesting for both companies to merge in a highly competitive industry as the steel one. Besides, still on the due diligence pre-merger process, globalized companies are willing to be more successful thanks to their understanding of other cultures during their prior international experience. Collins et al. (2009) demonstrated that those former experiences are key success predictors, particularly in "subsequent international acquisitions". Moreover, prior experiences in M&A is also important: Barkema et al. (1996) state that "prior experience in M&A activity and prior experience within the target country can increase the frequency and success of subsequent cross-border M&A