The international merger between British Airways and Iberia was recently announced. This integration will give birth to the world’s third largest airline. Achieving this result however was not an easy process. Through many discussions around aspects such as the funding of their pension scheme, British Airways and Iberia eventually found a way to overcome them and reach an agreement.
Now that the European Commission and Merger Regulations Agency has validated the deal, nothing stands between this merger. The new entity, based in London, will be called International Airlines Group and the shareholders of British Airways will own 55% of the company. The Iberia and British Airways brands will continue to exist while the group will now be able to offer flights to more than 200 destinations around the world, carrying over 60 millions passengers each year.
While this merger will bring many advantages to both the companies and their customers such as cutting costs and improved competition, there are also likely to be many challenges for employees of both companies. The fact that British and Spanish cultures can be really different will very likely create pitfalls and obstacles that will be hard to overcome with a high level of cultural understanding and sensitivity that you can get from intercultural training courses.
“The Coach” vs. “El Jefe”
It is well known that most British companies have a rather ‘flat’ hierarchical organisation. In other words, there is not very much hierarchy or formality between employees and their managers. For most British workers, managers are seen to provide direction and help them to achieve their goals. In Spain employees tend to have a completely different approach to management and organisational hierarchies. In Spain they tend to see “El Jefe” (the boss) as a paternal figure who should lead them toward the right direction by providing explicit instructions on a more micro level.
Indirect vs. Direct Communication Style
Another possible cultural difference that may impact working relationships between employees of British Airways and Iberia is the different communication styles. British tend to be fairly indirect when communicating and will use understatement. Words such as ‘perhaps’ or ‘maybe’ are commonplace and can be confusing for non native English speakers. People in the UK will also tend to avoid direct and open disagreements and displays of emotions. This communication style can be confusing for their Spanish counterparts who don’t always get the real meaning of what they are communicating and get lost in the words.
The Spanish on the other hand have a direct and affective communication style. They tend to prefer using gestures when speaking and will be more likely to say what they think than their British counterparts. As a result, their British counterparts often perceive them to be loud, interruptive and confrontational.
Uncertainty Avoidance: Is it Worth the Risk?
Another significant difference between Spanish and British culture is the attitude they each have towards risk and uncertainty. The Spanish tend to avoid unknown or difficult situations at all costs and will stick with what they know and already master. Conversely, their British counterparts are typically more comfortable dealing with new or untested solutions.
This difference can create problems on both a cultural and organisational level. Identifying and implementing new strategies or processes or how rules are applied and adhered to within the organisation are just some areas which will be affected by this cultural difference. Attitudes to risk and uncertainty will also impact the way projects are planned and measures of health and safety.
Time: Today or Mañana?
Another key difference between the UK and Spain is how time is perceived and managed. People in Spain tend to be polychronic which means they are comfortable with multitasking, do not always respect deadlines and may reprioritise their schedule at the last minute. In the UK, it’s really important to respect deadlines and they appreciate agendas and concrete plans.
Coping with all of these cultural differences is the key to a successful international merger and acquisition. Research suggests that more than 60% of international mergers and acquisitions fail because of a lack of cultural awareness and adaptation. Cultural issues need to be dealt with effectively to avoid losing large amounts of money, time, market share and brand credibility.
Cross-Cultural Training courses like Managing International Mergers and Acquisitions can equip employees with the relevant skill set and knowledge to exploit the full potential of a multicultural workplace. An increased cross-cultural awareness can dramatically reduce the chance of failure and so bring a high return on investment for the new company. Let’s hope that Iberia and British Airways will overcome their differences and find a way to work together with flying colours and make a success of their international merger and acquisition.
© Communicaid Group Ltd.2010