Cultural Differences and Communication Issues in International Mergers and Acquisitions: A Case Study of BenQ Debacle

Abstract

BenQ, a Taiwanese-based company, grabbed the international headlines on June 7, 2005, when it acquired the money-losing mobile phone division of Germany’s Siemens and launched the brand, BenQ-Siemens. Subsequently the acquisition proved to be a strategic mistake, as the two companies could not successfully integrate. This article tracks BenQ’s acquisition of Siemens, from the perspective of BenQ, through a qualitative case study. The analysis focuses mainly on culture and communication issues in what became an unsuccessful acquisition. The results indicate that the German Siemens and Taiwanese BenQ are different in important ways, from national culture to organizational culture. BenQ’s failed acquisition of the Siemens handset was a wakeup call, providing a valuable lesson to other companies planning to create their own global brand recognition. The issue here is the extent to which the two companies’ incompatible cultures made it unlikely that they could add value and create synergy. This study concludes that an international merger and acquisition has a better chance of success when managers consider the host country’s culture and allocate enough time and resources for assimilation. Furthermore, managers need to communicate and clearly define objectives and performance expectations during the integration and implementation process.

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