The recent announcement that Deutsche Bahn has acquired Arriva paves the way for the creation of one of the largest transport groups in Europe.
Deutsche Bahn operates in 130 countries around the world and is widely known in Europe for its operation of Germany’s national rail services and some key passenger and freight rail services in the UK. Arriva, a large transport services organisation, provides bus and rail services in twelve countries throughout Europe. The resulting merged group will therefore encompass a significant number of European cultures and languages.
This multicultural environment is likely to present challenges for the newly merged group that Deutsche Bahn and Arriva need to recognise and deal with in order for the merger to be a success. Developing multicultural project teams, managing virtual communication across Europe, negotiating organisational cultures and dealing with a number of different languages are just some of the challenges they may face. These challenges lie in different cultural values and behaviours that result in diverse business practices.
Examples of challenges rooted in cultural differences might be the greater amount of administration that is preferred in German companies, an indication of the Germans’ tendency to avoid uncertainty and risk and keep control of details. Another example is the high levels of hierarchy displayed by businesses in France while in Denmark there are more flat hierarchies and it is not unusual for decisions to be made by consensus. The indirect communication style in the UK is another example of cultural difference which may cause confusion for Germans. Conversely, the British may perceive the German preference for a direct communication style to be aggressive or rude. These are just a few examples of how cultural difference can impact international business and M&As.
Research has shown that 60-80% of international mergers fail because the companies involved have not put measures in place to deal with cultural differences like these or integrate both national and organisational cultures. Developing a ‘third culture’ that is understood and accepted by employees throughout the company is one of the best ways of ensuring a successful international merger. Communicaid’s cross cultural awareness training courses for mergers and acquisitions can help employees to develop the cultural awareness and intercultural sensitivity required to understand their colleagues’ cultural values and preferences. This in turn will provide them with the opportunity to develop an integrated approach to the company’s culture, essential for any international merger’s long-term success.
Armed with an understanding of these cultural differences, managers working for Deutsche Bahn or Arriva can really harness the broad diversity that this newly formed venture has to offer. Undertaking an intercultural training course such as Managing International Teams or Managing International Mergers and Acquisitions will give international managers involved in a merger or acquisition the insights they need to develop an effective working culture that plays to the strengths of their multicultural teams and maximises the cultural benefits of their company’s acquisition.
© Communicaid Group Ltd. 2010