It is largely claimed that a large part of mergers and acquisitions fails. The reasons for these failures are numerous, but one of the most important ones, is the difficulty to deal with different management and organizational cultures. It is explained in the case study about Danone, when it acquired Bolshevik, a Russian biscuit manufacturer in 1994, they were faced with these difficulties. Indeed, Bolshevik was deeply marked by the communist environment in which it was developed and had therefore an organizational culture considerably different from the Western Danone's one. So, throughout this essay, we will try to determine how the 'Danonizing' process of the Bolshevik biscuit factory occurred. In order to do that, it is relevant to start with a description of the two companies and the takeover process. Then, we will analyse the differences between the two firms, namely, by characterizing the Russian national culture and the Bolshevik organizational one. Finally, we will present in the perspectives part, the problems and strategic elements which Danone faced.
[...] The company is really well known in Russia because the awareness is huge in the population. Bolshevik is also the largest producer of biscuits in a Russian snack market in expansion. Why and how Danone took over Bolshevik When the Soviet empire died in 1989, a lot of opportunities were available for the Western companies like Danone. They began to prospect across all over these new countries to continue the group expansion and to be present internationally. Bolshevik has contributed to the development of the country and was awarded for this reason by the Communist party in the eighties. [...]
[...] Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'.” Russia: Low France: Low The Russians have short thinking and planning horizons and greater emphasis on instant gratification. As we can see, the Russian culture has a lot of similarities with the French culture. This should normally, make the “danonizing” process of Bolshevik easier. Bolshevik's Organisational culture Two years before the Danone's acquisition of Bolshevik, Bolshevik had been privatized. [...]
[...] (2005), “New context, new leadership needs: what shall we do?”, NPQICL Pilot Research Route Assignment. Available from: http://www.ncsl.org.uk/media/F17/80/new-context-new-leadership-needs.pdf Kets de Vries, M. F. R., Florent-Tracy, E., and Pavlovsky, P. (2000), “Walking the Bear; "Danonizing" the Bolshevik Biscuit Factory (A)”. INSEAD, Fontainebleau. Kets de Vries, M., Shekshnia, S., Korotov, k. et Florent-Tracy E. (2004), “The new global Russian Business Leaders: Lessons from a decade of transition.”, INSEAD, Fontainebleau Zinsou, L. (1997), « A la conquête de l'est. Comment le groupe Danone s'est implanté en Europe de l'Est dès l'ouverture de ces pays. [...]
[...] As we can see, Bolshevik has its own whole story. Moreover the strategy of Danone was to expand into Eastern Europe in the long term thanks to the development of products that would suit the local consumers and culture. To be able to do that, Danone had to keep the name of the Russian factory. That's why, according to us, Danone made the right choice keeping the name Bolshevik. Conclusion When Danone decided to purchase Bolshevik in 1994, it was a really good decision because it was the right time to invest there and to take the control of a powerful Russian corporation. [...]
[...] This new culture should, ideally, contain the best elements of the two cultures. “The problem in mergers is that people from very different organizations (and cultures) are expected to work together, to discuss, and to solve complex strategic and operative tasks. It is very difficult to impose a new culture that does not have the acceptance of the people. This perceived attractiveness of cultures can have the following impact on the integration process:” It is also important, to take into consideration the two types of culture: the national culture and the organisational culture. [...]
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