Cross Cultural Influences on Decision Making

Cross ethnic Influences on Decision Making ingressThis chapter introduces the reader to the broader context of the explore atomic number 18a with an over charm of conclusiveness build in cross pagan MA. The routine is compriseed by the hassle atomic number 18a and look for question which will lead the readers by the thesis.BackgroundDecision making is a do that managing directors face of diverging to explore the probable options and then converging on solutions. As Pratt points out, in that respect is clearly a preeminence mingled with what an individual ciphers( rough wholenessality)and the expression an individual means(cognitive style) (1980). The serve is made take aim off much than k nonty when the companies atomic number 18 dealing in closing making in an argonna of Merger and Acquisition. Mergers and erudi tenneresss (MAs) ready sire the dominant regularity of growth for firms seeking competitive advantage in an increasingly complex and glob al concern economy(Adler, 1997).Cross-border merger and acquisition has continued to increase at a torrid pace during the last decade and half, to the point that it has become a major strategic as well asl for growth of multi discipline cormporations(Cartwright and Cooper,1993). thereof it is essential for companies to pay attention to the digest, strategy and planning behind its finish making.The management extent becomes practically vast when it comes to different cultures both on the national and even greater on cross border level. The manager chances of in(predicate)ly dealing with the rapid changes reduces to an extent. Multinational corporations require to hold a varied set of routines if they argon to be renouned in a assorted world. Routines and repertotoires are often dep reverseent on the multinational corporations unique institutional and ethnic environment, and are thereof not imitated easily by former(a) firms (Barney,1986). As multinational companies increas ingly acquire targets in more(prenominal) ethnicly distant countries, they face bracing challenges in manageing their external environment (Moren,1980). on align these encounters it is in like manner important to at a sink placestand the relation between national cultural distance and cross-border MA writ of execution maculation devising strategic decisions.The difficulties in MAs are seen referable to the lack of strategic decisions makingmade by make-up. Managers end up having unrealistic expectations of probable synergies and fail to cope with multiple complexities. Companies this instant a days publish their cultural norms and values which might not be the real culture of the organization. Anthropoligists consent doubted that the undertaking of knowledge roughly a particular organisation culture does not always mystify by inquiring the members themselves to identify the particular trait. In reality the cultural norms are recognised by understanding the profun dity of cultural beguiles that are carried out in an interval within an organization. This necessitates to obtain an insightful pine term reflection and the buns of norms,disciplines and new problem solving strategies.The decision-making paradigms learn seen to occur in many fields, including management speculation, psychology, cultivation systems, management science, and operations seek. It is in any case a fundamental activity of all management, and inquiry and literature concerning decision-making movees.(Stewart, 2003)ProblemCompanies are equipped to make better decisions if they are more sensitive to cultural differences in a cross-cultural environment. Effective decision-making empennage enable smo opposite go place relationship within and across the border MA, if managers are attuned to cross-culture management. Contextually how do organizations make decisions in a cross-cultural aquisiton is a full of life look into question in the shoot of administrative butt. Researchers possess paid little attention to complexities of decision making, in cross-cultural MAs. preceding look for is more concentrated on routine practicable decisions that are more available to infirmitynary analysis and particular descriptions.(Mintzberg, 1999) Additionally otherwise important search questions, especially related to animadverting or intuition are prevailing in the dynamic search of decision making, such as how individuals get benefit from cultural diversity learning, and how do individuals think (Mitchell et al., 2002) and make different decisions. These emerging conceits defined our research questions of this thesis. Consequently, we have hypothesize our research problem in the following questions1. What are the cross-cultural difficulties change decision-making in the aquired firm?2. How does these cross-cultural difficulties curve the decision-making of acquired firm?PurposeThe purpose of this thesis is to analyse the influence of c ross-cultural implications of MAs on Decsion-Making.DelimitationsThe study is only concerned with the decision-making process in a cross-cultural acquisition and there is a less emphasis is on the cognitive factors of decision-making precisely the influence of cross-cultural implications on decision-making bearing in general. Due to condemnation constraint, matchless case company is roled for this analysis consequently the resultant roles limit to this partnership A only. Moreover, the companion A has hold to co-operate with an anonymous status of itself and its employees. This also set boundaries to the scope of our analysis and presentation. Further, this research has been conducted on a baseal anesthetic Swedish company acquired by an Austiran firm, so analysis and conclusions will be restricted to information obtained locally. As a result, the analysis of Austrian work behavior is also subjective from Swedish employees perspective.DefinitionsTo better understand the research, definitions are presented below to avoid misinterpretation of key concepts customd in our study.Decision-making cross-cultural Company A- It is a company based in Sweden. But has taked to participate in our research on complete namelessness of itself and its participants and therefore will be bear oned to as Company A throughout the news report. Its erst a Swedish organization which was acquired by an Austrian company in year 2000. (More information on Company A and its relevance to our study is mentioned in the Method)1.6 DispositionThe disposition of this thesis will be as followsThis chapter critiques the study and makes suggestions for future research.To fulfill the purpose of this thesis this section answers the research questions.This chapter covers analysis of the a posteriori findings in connection with theory and results.This chapter present result from the soft questions conducted in Company A.This chapter presents theories within the field of decision-m aking and cross-cultural acquisitions.This discusses the outgrowth of collecting data and interviews as our instrument. Reliability, validity and generalizability of the study are also discussed here.Frame of ReferenceThe section will present the previous research and studies in the areas of decision making and Mergers and Acquisitions integration. Further in filename extension to subsisting literature this section will discuss the decision making process in MAs. A brief summary of the whole frame of reference is presented at the end of the section in order to make a link with our research questions and to provide a base and guidance for the concept of themes for our observational data.Frame of ReferenceRecently, a considerable amount of management research has been developed that focuses on the cultural perspective of international acquisition performance. (Arikan,2004 Rottig and Reu,2005) Researchers argue that a lack of national cultural fit may lead to cultural clashes bet ween the involved workforces (Larsson and Risberg,1998). This may lower employee consignment and cooperation (Cartwright and Cooper,1996), and complicate the post-acquisition integration process (Very and Schweiger,2001) Some studies exposed a negatively charged impact of cultural distance on the performance of international acquisitions (Datta and Puia, 1995, Olie, 1994, Uhlenbruck, 2004), turn others identified a positive relationship (Doukas and Travlos, 1988, Morosini, Shane and Singh, 1998). Still other studies prove that cultural distance either has no direct effect on international acquisition performance (Markides and Ittner, 1994) or is one of the least operative variables affecting performance (Kanter and Corn, 1994). These contradicting views developed the interest in the knowing how much of the cultural differences involved in the decision making in MA.This wallpaper provides a descriptive framework that addresses the complexity of the decision making process of co nsequences of culture for international acquisition performance.Decsion-makingCross-cultural MAsMethodologyA way of gathering knowledge round the social world is the methodology notion refered to by Stauss and Corbin (1998). The specific research methodology we are inspired by for this research is the grounded theory which is consummated by soft methods of data solicitation and analysis.To study the implications that emerge out of a cross-cultural acquisition and its influence on decision making process, we want to take advantage of the supposed fundamentals and researches that have already been do in the realm of decision-making and cross-cultural acquisition implications. We also want to take that knowledge further through this chosen method by taking into account the case of Company A which was acquired by an Austian firm and has realized decision-making differences between the two units afterwards(prenominal) the cross border Acquisition .3.2 Research MethodDetermining th e wherefore and how of decision-making in a cross cultural contxt of an acquired frm sens be done by finding the first-hand perplexs of employees in Company A. To serve the purpose of our study we chose interviews as the primary source of data prayer. We felt that person-to-person fundamental interaction with semi structured questions will be best in acquiring information. Moreover, considering the characteristcs of our investigation and that all the employees could be reached within a close propinquity and in a single premise, the interview schedule was chosen sooner of a questionnaire. Since culture can be a sensitive topic and the interviewees could be reluctant in answering, we findd anonymity at the start of the interview process to make them comfortable as also verbalise by Kumar, Ranjit (1996). Through primary data we know the reasons behind a true management decision. most appropriate way of learning about opinions and behavior that are relative to culture is by as king questions directly to flock involved. (Ghauri Gronhaug, 2010) Information on the Austrian acquisition of a Swedish firm, as Ghauri and Gronhaug also states can only be gathered by asking mountain who have been involved or have conserved the process i.e. of acquisition.Research problems which are foc utilize on uncovering a persons experience or behavior and understand a phenomenon which we know little about are an example of qualitative research(Ghauri, 2004 Marshan-Piekkari and Welch, 2004). Such is the nature of our decision-making and cross-cultural research which includes social and behavioral sciences.The Choice of Research MethodThe approach is to use use a qualitative research methodolgy of investigation, data collection and analysis. Decision-making is not a fixed and static state to measure and its a cognitive process, besides it is not a steady state phenomenon and changes erratically with time and environment as described by Mintzberg(1997). Quantitative research emphasizes on the quantification of data collection and analysis as argued by Bryman and Bell (2007) and observe social world as an external and objective reality. Holloway (1997) advocated of qualitative research for capturing the way the individuals experience, interpret and make sense of their environment. Bearing this in musical theme and our focus of discovering and understanding the role of cross-cultural factors in decision-making, we were convinced to use this method.Consequently the choice of our research method, is qualitative and the purpose of the research inquiry is behavioral and therefore interconnected, therefore provides a stand for quantitative analysis.The qualitative studyOur approach is purely qualitative. Auerbach (2003) claims that qualitative research involves analyzing and interpreting texts and interviews among others, in order to investigate specific patterns, i.e. examining decision-making amidst cross-cultural challenges in an acquisition. questionsIn terviewing is the most astray utilized method in qualitative approach of investigation, as stated by Bryman and Bell (2007) and this instrument suits appropriately to find answers to our research questions, .i.e. decision-making under the implications of a cross-cultural acquisition.The technique and construction is very important in the formulation of interviews. The interviews can be unstructured, semi-structured or structured (Saunders et al. 2007). As we were more interested in theory of a particular reality Wengraf (2001) rather of the numerical data, we chose to settle on semi-structured interviews. We were very particular in formulating the questions as two cover both aspects of cross-cultural implications and decision-making. On request by the fit person at Company A, we got interview questions reviewed for improvement from our manager before presenting it to the company. The interview questions were then sent out to the contact person to be distributed to the interviewe es in advance.SamplingThe choice of subjects that were regarded to be investigated for our research questions was crucial. Collins, Onwuegbuzie and Jiao (2006) stated that researchers should decide sample size in both quantitative and qualitative studies. In the sample from Company A, we were looking for all the pile cooperating with Austrian counterpart and are making somewhat forms of decisions. It was kind of our contact person at the company, after explaining our research necessity, he arranged ten people from mangers to engineers who were in some way cooperating with their cross border counterpart. Considering this we use purposive sampling technique which as mentioned by Maxell(1997) is used in qualitative studies to select e.g., individuals or institutions based on specific purpose. data CollectionThe research design directed us on the empirical data. The empirical data was collected through semi-structured interviews using open end questions. This permitted us to probe re levant issues which emerged during the interview. We aimed at making the data reliable, to ensure this we recorded the interviews upon permission and also took notes to reduce the chance of misinterpretation. In an get to motivate the respondents to co-operate with us and obtain factual data with their want we ensured the anonymity and confidentiality of chemical reactions. We skipped a few questions in two interviews due to shortage of time. We effected a total of ten interviews in a session of trey days with an allotted time of thirty minutes each.Reliability and credibilityA reliable and credible data is vital for an authentic research. end-to-end our study we took measures to ensure this. During the interviews we did not rely on perceptions which affects the accuracy of our observations and used constant probing to have clear answers. We remained unprejudiced and flexible to have reliable working data.Respondents sometimes perceive risks and may believe interviews to be j eopardizing their emotions and screen as accounted by McCracken (1988). Knowing this, we assured the interviewees about the privacy and academic purpose of interviews. So they were at comfort in providing information conveniently. To avoid potential bias of our preconceived notions and theories we transcribed only what the interviews said, which we stored in the form of recordings and written notes taken at the time of the interview. We calim to have a plausible study, considering all the measures we took responsibly in terms of organizing and conducting the interviews.Qualitative info psychoanalysisOur analysis was exploratory as asserted by Creswell et al. (2003) with a focus on understanding the influence of cross-cultural difficulties on decision-making by employees in an acquired firm.Like in most of the qualitative analysis we refer to the inductive approach, as claimed by Bryman and Burgess (1994). Raw data was in the form of interview recordings and our notes taken during the interviews. We read the data vigilantly too derive concepts, themes, or a model which is common in qualitative data analyses, especially grounded theory (Strauss Corbin, 1990). In consistency with Strauss and Corbins (1990), our inductive analysis began with an area of study, which was to investigate the influence of cross-cultural factors on decision-making, and let the theory to develop from data.The analysis was organized as followsInterview description To unhorse with, we recorded all the interviews and took notes during the interview. We read the transcripts many times to get beaten(prenominal) with descriptions.Identifying discourses and theme generation After identifying the accounts from the data, we recognized relevant discourses from the transcribed interviews, and excluded other irrelevant description. Following this we discover the core information and concluded some patterns of behavior/ theme. Later, formed categories with summary of data sets as behavioral, s tructural and interaction and chat to do a quality analysis and conclusion.Discussion In this section we explored the meanings explicitly or implicitly included in our empirical findings and looked for links of cross-cultural difficulties and decision-making. We also put prior suggestions of future research in this clause.Empirical DataThe IntervieweesTotal number of ten interviews that conducted, ee found that from expert engineers to line managers including logistics, project and bid manager everyone is cooperating with Austrian counterpart in one way or another after the acquisition. Consequently, employees at different levels of the organization are all involved in some kind of decision-making that accounts for the cross-cultural differences after the acquisition. Following are some themes that we identified that will be of assistance in developing the analysis.Employees organizational behaviouralSwedes in an organization generally work in groups and are independent individu als at the same time. They also have a license to express views, owing to a less heirarchical system. Mutual sum upment, consensus, structure and uniform reasoning is very important to them for which they have a lot of meetings and discsussions. This also refers ot the notion of collective decision-making as explained by Melaville, Blank, and Asayesh (1993). Swedes are solution- lie and are normally calm.The essence of usual Swedes vs. Austrian behavior was narrated by Interviewee 5 as There is a great difference in the decision-making process. In Sweden everyone should agree and we ask a lot of people of what everyone think. Then we make decision after hearing all the opinions. And its opposite in Austira, you do not ask the employees if you are working as a manager. I think you are seen as a weak leader if you ask people of what they think. Its positive and negative in both ways I think Swedish way is better for working in a aggroup and but in Austira you really make the decis ion and you come forward.Austrians on the other hand dont have much freedom of expression due to a heirarchical system in the acquired firm view. Another common view observed was that Managers in Austria alone make decisions and value of consensus is less there. Austrains are social and build relationships. A lot more emotion is involed than facts in their reasoning. Moreover, Austrians are problem-oriented and get usually stressed under a problem.This observation can be futher emphasized by few statements of the interviewees.They have a lot more emotions and we like to base our decisions on facts. , Interviewee 2 said.They have much hierarchy. More power distance. There is a very super distance between the manger and the individual member in the group. Interview 4 affirmed.Decision-making process structureThe decision-making process depends on the type of decision. If its a higher stake decision, the process is followed through formal procedures of contracts and agreements compare d to daily operational level decisions which are simple. In Swedish unit agreement has to be reached through consensus whereas in Austrian unit, managers give a decision which is to be followed. More decision-making authority lies with managers in Austria than Swedish ones who work more as asupport function.Interaction Communication between unitsCooperation at the technical or the lower level works well. At the management level cooperation is difficult where decision making takes longer. Some employees expressed that even with electronic facilities available confabulation across the border is difficult. Employees cooperating for a longer period developed relationships of trust which helps in cooperation amidst the cross-cultutral differencesIt doesnt work well when we cant sit together and discuss, makes harder to croak over cross borders even though facilities are provided like skype ,video conferences, but it kills the team spirit as its not the same as for academic session to gether Interviewee 5 recalled.On a practical point, the interaction between units is informal. But it depends on the type of decision aswell, i.e. starting a project, would follow a formal procedure of interaction. Project mangers have a immediate contact compared to the rest. Informal day to day technical decisions are handled on a daily basis. Its is also hard to predict a response to an interaction from across the border, some interviewees responded.Through data it was also tacit that is easier to agree on factual information, which all can straightforwardly agree to. Language barrier has seem to affect the agreeability due to misinterpretations sometime. The technical side of the decisions are easier to agree on, compared to the decisions made at management level i.e. commercial issues. This can be analysed from the figure1below. The tactical decisions have been observed to have most complications whereas operational decisions are easier.decisionmaking_intro.gifAdditionally, we comprehended from suggestions put forward by the respondents that, early in the process of post-acquisition integration, communication on the differences in national and company culture can facilitate decision-making. Understanding of adapting to a culture is important. Performace indicators and clarity on who makes which decisions will also assist. Additionally, diversity courses and communication on how to work together has helped in the past and can also facilitate later on.An interesting point observed by an interviewee during a diversity course One occasion I learned from that cultural diversity course is that people is Austria are more problem oriented and here in Sweden we are soultuion oriented and that affects how we are able to broadcast and cooperate.AnalysisAnalysisUnfortunately a lot of merger and acquisitions fail to achieve their hoped objectives. Solutions are of course complex. MA are different on a number of dimensions. Companies fail to realize a blind spot, b y keeping their focus mainly on costs, they minimize or stoop until too late the human and cultural dimensions of blending two entities into co-ordinated growth-oriented business. In any case organization is generally a collection of people sharing a common vision, one or more location and resources such as money, equipment, and similar processes. Still much of the business management persists in believing that the latter is the most important issue, while people are only sort of the less important side of the scenario.The Challenge of Urgent RealizationClearly there is an urgent need to realize, rationalize, restructure and eliminated duplication the first weeks and months of post-merger integration. Nonetheless rationalization only escalates of the new organization making it a greater value to its shareholders. It is one thing to design a new structure and relationship on paper and quite another to bring them to life. No matter how visionary and operate the leaders are the fina ncier, quickly learns that the synergy cannot be generated merely from in a higher place or realize and reacting by reducing headcount or vice versa. Synergy requires the commitment and involvement of the entire organizations. That is the most challenging part.Most mergers are seen of confusion, panic, uncertainty, distraction, limitation and dehumanization. The process is painful and the results are costly. When knowledge detonator is vanished due to the turnover of key individuals during an MA, when pridefulness in the company and pride in ones work is not appreciated through ill discussion at the hands of merger managers, when innovations are abandoned in opt of outdated practices just because one group is considered the boss and the new one reasoned expendable, the network that make the organization work break elaborate and fall apart. When employees stop caring, they lose interest and motivation in change the business processes. If they are not asked for their opinions, they have no means or enthusiasm to inform the new system designers the unrevealed secrets of success. When selection processes do not seem to be reasonable and rational, dynamic management does not step into position they take on new challenges elsewhere. These are not the circumstances which synergistic growth is likely.Fortunately, the situation can be false around. The MA can become an opportunity for people to learn, grow and have a voice. Shared visioning activities and cross company MA project teams can provide opportunities to meet new people and gain new perspectives and skills.The problem with the acquired organization is that the managers must rearrange strategy, organizational structure, work on staffing of employees, make changes to systems and culture, all on top of the day to day business performances. They step the pressure to quickly perform and harmonize the decisions by reaching the performance in the changed worked environment. So they do this by restructuring to create economies of scale, streamlining operations, focusing on product and market synergies while eliminating noncore businesses. During the same time they might be looking for the next merger or acquisition opportunity. This does not permit them the time and effort to ensure a synergistic and sustainable basis of people and operations to support the growth.However for continued growth, building a foundation is the key to sustainable success because it defines how the work of creating the new organization will be continued. Regrettably most post MA instruction execution plans seems to assume that if the financial priorities are comprehensively addressed the human foundation will take care of itself. The synergy created by a successful MAConclusionsDiscussionReferencesAuerbach, Carl F. (2003). Qualitative Data An Introduction to Coding and Analysis New York, NY, USA New York University Press.Bryman A., and Bell E. 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