The strategy (also) has a cultural dimension
Chinese leaders who use a Taoist strategic language, Russian acquirers whose methods are part of the long history of the Russian empire, Indian magnates whose choices reflect an “Indian way” of leadership…
Beyond their universal aspects, strategic decisions are also marked by cultural conceptions. This is what more and more studies are observing, from a perspective that Chinese researchers call comparative strategic management.
An eminently strategic area: post-acquisition integrations
Recent research has analyzed the types of integration implemented by multinationals from different countries following acquisitions in France. A highly strategic topic, post-acquisition integrations can be approached using numerous MBA-type tools and methodologies, often considered universally applicable and applied.
However, the decisions and implementation of these strategies actually turn out to be very diverse, and strongly correlated with the country of origin of the acquiring companies and their managers. Let us take a few examples from this research:
Strategic decisions that reflect cultural conceptions
China.
Chinese companies most often opt for partnership approaches with the entities they acquire. They leave these entities relatively autonomous, gradually building technological or commercial synergies with them. These synergies intensify over time if they prove conclusive. Chinese leaders thus implement a vision of change as a continuous and gradual process, both subtle and constant. As Chinese leaders say, transformation is a discreet art, a management of “subtle things.”
Some even use the vocabulary of water, which, slowly seeping into the earth, transforms it internally without there being a clear “before” and “after.” In this, they are in fact taking up terminologies and reflections typical of Taoism, familiar to all Chinese people for more than two thousand years.
Russia.
In contrast, Russian companies make very different decisions in similar situations (sector, economic performance, etc.).
Most Russian acquirers implement specific types of integration, characterized by strong and direct control by the acquired entity’s managers and weak operational cooperation. The acquired entity and its managers find themselves in a state of forced obedience to the new owners, without the acquisition developing new opportunities. This type of integration, described as “subjugation,” strikingly echoes Russian political practices and imagination, both historical and contemporary, marked by a conception of domination where power relations are exacerbated.
India.
Indian acquirers are characterized by “preservation” approaches. Most companies acquired by Indian groups are preserved as they are, both in their structure and their activities. They are connected to the acquirer in a distant and minimal way through financial reporting and potential synergy opportunities. They are integrated into the business models of these Indian companies, most often a family-style conglomerate, in which multiple entities coexist and evolve autonomously. In this way, they experience the Indian managerial approach, summarized by the expression Business sutras: a great organizational diversity with a mosaic of entities. Again, this characteristic echoes cultural regularities of India, a mosaic of regions historically made up of several hundred political entities with sometimes loose ties.
United-States.
This diversity of approaches is all the more striking because none of them illustrates the typical model characteristic of large American groups: absorption. In this model, often presented as rational and universal, the aim is to quickly align the target’s practices with those of the acquirer, ideally within a short period of time. This “American model” therefore also proves to be culturally marked.
The cultural dimension in business therefore does not only concern soft aspects of communication, management or cooperation (teams, projects, etc.), but also influences areas that appear to be purely hard, such as strategy.
References
Luo, Y., Sun, J., & Wang, S. L. (2011). Comparative strategic management: An emergent field in international management. Journal of International Management, 17(3), 190–200.
Marchand, M. (2017), Do All Emerging-Market Firms Partner with Their Acquisitions in Advanced Economies? A Comparative Study of 25 Emerging Multinationals’ Acquisitions in France. Thunderbird International Business Review, 59(3), 297–312.
Pattanaik, D. (2013). Business Sutra : A Very Indian Approach To Management. Aleph.
Shrivastava, P., & Persson, S. (2014). A Theory of Strategy – Learning From China. From walking to sailing. M@n@gement, 17(1), 38-61.
