Merger and Acquisitions: Case of Microsoft Acquisition in Nokia | Cross Cultural Management

Running Head: CROSS-CULTURAL MANAGEMENT
0
Student Name:
Student
University:
Cross-cultural
Management
Merger and
Acquisitions:
Case of
Microsoft
Acquisition in
Nokia

CROSS-CULTURAL MANAGEMENT 1
Executive Summary
Cross-cultural management is essential in every country, business or society
where differences occur between individuals. In terms of companies, this issue of
cross-culture occurs when two different companies in same or different industry
come together in terms of partnership. This is the major challenge to understand
and enhance communication between people for avoiding the issue of cultural
differences affecting the merging severely. It generated some cultural barriers
and differences along with communication issues between both the companies.
Though, there are both positive and negative effects after this merger and
acquisition (M&A) where companies focus on building relationship and achieving
success in the market by making this decision beneficial and not a failure. This
consisted negotiation strategies along with successful implementation and
looking at the company’s performance till now. So, the step should be taken to
lower the pressure of innovation and competitors in case of taking the step in
cross-culture merger. Thus, both the companies should innovate continuously to
reduce the impact of issues in future.

CROSS-CULTURAL MANAGEMENT 2
CONTENTS
INTRODUCTION...................................................................................................... 3
KEY MANAGEMENT CHALLENGE............................................................................. 4
Cultural differences and barriers........................................................................6
Communication Issues........................................................................................ 7
ANALYSIS............................................................................................................... 9
Positives and Negatives....................................................................................11
RECOMMENDATIONS........................................................................................... 12
CONCLUSION....................................................................................................... 13
REFERENCES........................................................................................................ 14

CROSS-CULTURAL MANAGEMENT 3
INTRODUCTION
In the society, cross-cultural management impact on the managers and
management practice along with the cultural orientations. It consists of
organization members and individual managers with their reactions, values, and
cognitive structures under cultural experience and context (Thomas, 2014). Due
to cultural differences, there is an issue for companies in relation to merger and
acquisition (M&A) having both positive and negative effects on the performance.
Though, there is growth in activities and volume of M&A along with high rate of
failure as well (Weber, Teerikangas, Rouziès, & Tarba, 2011). In recent
competitive business world, companies are working more with strategy of unit
and rule rather than divide and rule. Moreover, it has become essential for the
company to utilize resources within the optimum level that is possible through
M&A (Tellis, 2013). The case study of Nokia and Microsoft in a partnership to
work as a single cooperation as Nokia leads to failure in management due to
changing competitive climate in terms of radical innovation revolution within the
mobile industry. The broad strategic partnership was taken place between Nokia
and Microsoft considering dominance of Microsoft in software and Nokia in
hardware that is mobile phones production. Here, Microsoft acquired mobile
phone of Nokia along with division for $7.2 billion where the difference taken
place of cultural barriers that severely affected Microsoft’s deal with Nokia. In
this report, the discussion is based on the case of M&A analyzing the merging
effects of Microsoft with Nokia. Further, covering merging different cultures of
both the companies causes failure where it is essential to overcome with those
cultural barriers respective of International Negotiation.