◊✲ࣀ࣮ࢺA Culture Clash in International Merger and Acquisition:
A Case Study㕥 ᮌ ┾ ዉ ⨾SUZUKI, Manami(ἲᨻ኱Ꮫ)(Hosei University)す ᕝ ⱥ ᙪNISHIKAWA, Hidehiko(ἲᨻ኱Ꮫ)(Hosei University)

Abstract
The purpose of this study is to explore culture clashes when a Japanese company ismerged with a non-Japanese company. We focus on two types of culture, national
culture and corporate culture involving culture clashes in international mergers andacquisitions. We interviewed a Japanese director who previously worked in a Japanesecompany that was merged with and acquired by a non-Japanese company. Theinterview was conducted in two stages (the pre-stage, and the post-stage) of theinternational merger and acquisition (IM&A). For success in IM&As, the current casestudy suggests the importance of pre-merger research of target companies andunderstanding individual national and corporate cultures. The results show thatJapanese companies do not necessarily have high cultural adaptive abilities. The
present case study suggests recruitment standards for local employment and promotionof international enterprises in non-Japanese companies after their international
mergers and acquisitions with Japanse companies.

Keywords
Culture Clash, International Merger and Acquisition, Intercultural Communication

Introduction
The purpose of this study is to explore culture clashes when a Japanese company ismerged with a non-Japanese company. According to a 2004 Japan External Trade
Organization (JETRO) report, since the late 1990s, tKH QXPEHU RI RYHUVHDV ILUPV·
1147international mergers and acquisitions (IM&As) with Japanese companies has
LQFUHDVHG2YHUVHDVFRPSDQLHV·GLUHFWLQYHVWPHQWLQ-DSDQKDVDOVRLQFUHDVHGVLQFHWKH
1990s, although the recent increase rate is not very large. The number of Japanesecompanies involved in overseas business in fiscal year 2009 was 18,599 (The Ministry of
Economy, Trade, and Industry, 2010a). On the other hand, according to a Ministry of
Economy, Trade, and Industry (METI) survey of 2,796 foreign companies (including 845
U.S. companies, 212 Chinese companies, 1,209 European companies, etc.) in fiscal year
2009, the number of new entries of foreign companies decreased, while the number ofwithdrawals increased significantly (the Mnisitry of Economy, Trade, and Industry,
2010b). An analysis of WKH IRUHLJQ DIILOLDWHV· ZLWKGUDZDOV LV QHFHVVDU\ IURP YDULRXV
aspects (e.g., economic, social, and cultural aspects). With regard to Japanese
FRPSDQLHV· EXVLQHVV DQG FURVV-cultural communication in international joint ventures
or IM&As, there are many case studies of Japanese companies expanding abroad(Yoshihara, 2010), however, few focus on culture clashes in non--DSDQHVH HQWHUSULVHV·merger and acquisition (M&A) of Japanese companies.
The uniqueness of the present study is its focus on culture clashes and cultural
adaptive ability both before and after IM&As. Most M&A research has focused on issues
after IM&As (e.g., Barmeyer and Mayrhofer, 2008; Boxall and Purcell, 2003;
Louhiala-Salminen et al., 2005). Culture clashes and cultural adaptive ability are
significant factors in the success of M&As, particularly IM&As (Kelly et al., 1999; Riad
and Vaara, 2011; Van den Steen, 2010; Weber et al., 1996).
Within a framework of sociocultural theory, which was developed based on Russian
SV\FKRORJ\ DQG /6 9\JRWVN\·V RULJLQDO LGHDV ´SK\VLFDO DV ZHOO DV V\PEROLF RU
psychological) tools are [considered to be] artifacts created by human cultures over
WLPHµ(Lantolf, 2000, p.1). Symbolic tools include gestures, music, or numbers. Above all,language is regarded as the most important symbolic tool for human cultures (Vygotsky,
1986, 1987). Thus, the current study focuses on language use, particularly interculturalcommunication in an internationally merged company in order to examine culture
clashes.
The present study interviewed a Japanese director who previously worked at aJapanese company merged with and acquired by a non-Japanese company. Most
EnglishforSpecific

Purposes(ESP)

studieshave

examinedcross-culturalcommunication among employees in merged companies in European contexts; however,the present study explores business communication both before and after the IM&A
from the perspective of the Japanese director. Olk and Earley (2000) argue that it isimportant to examine interpersonal relationships in order to understand strategic
alliances, particularly in the development phase.

2
148

Theoretical Background: Management Perspectives
With regard to multinational enterprises, the localization (regionalization) vs.
globalization, and adaptation vs. standardization of management of human resources or
products have been examined in the field of international business studies (Jones, 2011;
Yoshihara, 2002). The business of multinational enterprises is influenced by the threefactors: economics, politics, and culture. Jones (2011) investigates the influence ofmultinational enterprises (e.g., the beauty industry) on culture (e.g., the beauty ideal).
The research on global business suggests that international business cooperation
includes the possibility of misunderstanding about the ways of thinking, protocols forbehavior, or communication (Phatak, 1995; Yasumuro, 2007).
Successful business cooperation, including mergers, requires partner companies to
KDYH VHQVLWLYLW\ WR WKHLU SDUWQHUV· FXOWXUHV KDYH FRPPLWPHQW DQG GHYHORS WUXVW
between the companies and individuals involved in the alliance (Child and Faulkner,
1998; Child et al., 2005; Faulkner and de Rond, 2000). Kanter (1994) indicates three key
factors in the success of alliances: (1) Self-analysis of each alliance company; (2)Chemistry, particularly the rapport between the chief executives of the two companies;
DQG   &RPSDWLELOLW\ RI WKH WZR FRPSDQLHV· FXOWXUHV SKLORVRSKLHV DQG EXVLQHVV
customs. Strategic management theory suggests the importance of selection of asuitable partner for the success of alliances (Child and Faulkner, 1998; Faulkner and deRond, 2000; Geringer, 1991).
With regard to the context in Japan, most studies are case studies of Japanesemultinational corporations (e.g., Ajinomoto, Toshiba, Honda) that have been expanding
their markets or business overseas (Yasumuro, 1982; Yoshihara, 1992, 2002, 2003,2011). These studies have been conducted from Japanese corporation-centeredperspectives. Yoshihara has examined the relations of language and communication tobusiness. Yoshihara (2011) argues the advantages and disadvantages of Japanese
FRPSDQLHV· XVH RI -DSDQHVH $V DQ DGYDQWDJH KLJKHU-level quality and quantity ofcommunication and information among Japanese employees are given. One of thedisadvantages is the lack of utilization of international human resources. Yoshihara(2011) suggests that Japanese multinational corporations should employ interpreters ortranslators to take advantage of the use of English in their business, even considering
the cost required.
Furthermore, Yoshihara (2011) and Yasumuro (1982) propose that working overseas
would be more effective than intensive language learning or studying abroad for-DSDQHVH HPSOR\HHV· DFTXLVLWLRQ RI WKHLU XVDJH RI LQWHUQDWLRQDO EXVLQHVV (QJOLVKYasumuro (1982) suggests that Japanese multinational corporations should take on adifferent management style (regionalism) from the American style, i.e., centralization of
KHDGTXDUWHUV· SRZHU +RZHYHU QR VWXGLHV KDYH H[SORUHG WKH SHUVSHFWLYHV RI ORFDO
companies that have merged with or been absorbed by multinational enterprises.

3149

Theoretical Background: Organizational Culture Perspectives
Culture clashes and cultural adaptive ability are significant factors in successful
IM&As (Kelly et al., 1999; Riad and Vaara, 2011; Van den Steen, 2010; Weber et al.,1996). According to Weber et al. (1996), two types of culture, national culture and
FRUSRUDWH FXOWXUH LQYROYH FXOWXUH FODVKHV LQ ,0 $V 1DWLRQDO FXOWXUH UHIHUV WR ´WKH
FROOHFWLYHSURJUDPPLQJRIWKHKXPDQPLQGµDQGFRUSRUDWHFXOWXUHUHIHUVWR´WKHEHOLHIV
and values shared E\ VHQLRU PDQDJHUV UHJDUGLQJ DSSURSULDWH EXVLQHVV SUDFWLFHµ 9DQden Steen, 2010, p. 1718).
Avoiding culture clashes between top management in M&As is crucial for theirsuccess (Weber et al., 1996). Senior managers may be regarded as representatives of anational culture and they largely influence the formation of the corporate culture(Weber and Schweiger, 1992; Weber et al., 1996). The characteristics of top management
FXOWXUH FODVKHV LQ 0 $V DUH GHVFULEHG DV ´   VWUHVV GLVWUXVW DQG DQQR\DQFH RQ WKHpart of the acquired team in working with the acquiring team; (2) negative attitudes on
the part of the acquired team toward the acquiring organization; and (3) negative
DWWLWXGHV WRZDUG FRRSHUDWLQJ ZLWK WKH WRS PDQDJHPHQW WHDPµ :HEHU HW DO pp.1217-1218). Weber et al. (1996) suggest that a cultural fit is significant for success in
M&As and they indicate that pre-research on a cultural fit and attention to the processof a cultural fit in post-merger integration are essential for management.
Van den Steen (2010) finds that the costs of culture clashes appear immediately after
IM&As and influence mainly the operational efficiency of the merged companies, while
the benefits of culture clashes come out much later and influence the fit with theenvironment. Bronder and Pritzl (1992) suggest assessment criteria for the culture fit:quality orientation, cost orientation, innovation orientation, technology orientation,customer orientation, international orientation, environmental orientation, andemployee orientation. Boxall and Purcell (2003) indicate that the cultural fit is one of
the key factors in successful M&As and that failure occurs not only during pre-M&As
but also during post-M&As.

Theoretical Background: English Communication Perspectives
In the field of second or foreign language education, how to teach English
communication in business, medical services, or law (legal) scenarios to speakers ofother languages has been studied and developed. For example, textbooks for practice oftypical dialogues in business scenarios have been developed based on corpus study ofBusiness English (BE) discourse (Belcher, 2009; Hutchinson and Waters, 1987).
Research on Business English as a Lingua Franca (BELF), business communication
between different groups of people, each speaking a different first language, aims at
clarifying problems of the use of BELF and analyzing individual needs and attempts toconnect theory and practice in international business (Belcher, 2009).
,QWKHILHOGRI(QJOLVKIRU6SHFLILF3XUSRVHV (63 ZKLFKUHIHUVWR´WKHUROHRI(QJOLVK
4150

in a language course or programme of instruction in which the content and aims of the
FRXUVH DUH IL[HG E\ WKH VSHFLILF QHHGV RI D SDUWLFXODU JURXS RI OHDUQHUVµ (Richards &Schmidt, 2010, p.198), some research has investigated English communication in amerger (Larsson and Risberg, 1998; Louhiala-Salminen et al.,2005; Very et al., 1998).

The studies have examined the following issues: English as a lingua franca (ELF),
which refers to ´WKHFRPPXQLFDWLRQLQ(QJOLVKWKDWWDNHVSODFHEHWZHHQVSHDNHUVZLWKGLIIHUHQWILUVWODQJXDJHVµ(Ellis, 2008, p.960); acculturation, ´DSURFHVVLQZKLFKFKDQJHV
in the language culture, and the system of values of a group happen through interaction
ZLWKDQRWKHUJURXSZLWKDGLIIHUHQWODQJXDJHFXOWXUHDQGV\VWHPRIYDOXHVµ 5LFKDUGV
and Schmidt, 2010, p.5); and how to reach agreement and understanding between thetwo parties or people. For example, Louhiala-Salminen et al. (2005) examine two casesof an international merger: Finnish and Swedish paper companies and banks. They
investigate the similarities and differences in the patterns and practices of business
communication in the merged companies after the IM&As through interviews anddiscourse analyses of e-mails and meetings that are the most frequent communicative
HYHQWVLQWKHPHUJHGFRPSDQ\6SHHFKHYHQWV´DUHJRYHUQHGE\UXOHVand norms for the
XVHRIVSHHFKZKLFKPD\EHGLIIHUHQWLQGLIIHUHQWFRPPXQLWLHVµ 5LFKDUGVDQG6KPLGW
2010, p.544). Speech events have been analyzed mainly in the field of sociolinguistics to
examine specific communication styles in different cultures or communities. All of thestudies are case studies in European company mergers. Furthermore, the studies haveexamined communication in merged companies without considering power relations
between the two companies (i.e., merging and merged companies) and levels (i.e.,
executive-level, or middle-management level, or lower-level) of employees in the merged
companies. These descriptive studies have focused on national cultures between the twocompanies in an IM&A.
The merger case studies suggest that an international merger is more challenging
than a domestic merger and that communication and co-FRQVWUXFWLRQRI´DQHZFXOWXUH
IRUWKHQHZPHUJHGFRPSDQ\µ /RXKLDOD-Salminen et al., 2005, p.418) are important fora successful international merger (Louhiala-Salminen et al., 2005). Louhiala-Salminen
et al. point out that it takes time for the process of a successful merger to play out.

Research Questions
As reviewed in the previous section, most studies of M&As have focused on
post-M&As. Research on Japanese multinational companies has focused on theiroverseas business activities. In other words, the research has investigated the active
and aggressive positions of Japanese companies in international business. Few studies
have inquired into cases of foreign companLHV·0 $VRI-DSDQHVHFRPSDQLHVZKHUHWKH
-DSDQHVHFRPSDQLHV·SRVLWLRQLVSDVVLYH&XOWXUHFODVKHVDQGFXOWXUDODGDSWLYHDELOLW\are significant factors for the success of IM&As. Languages are the most important5151

artifacts of culture and communication (see Vygotsky, 1986; Wertsch, 1985). Thus, thepresent study forms and examines the research questions:
1) What problems of culture clash arise in the process of a non--DSDQHVH FRPSDQ\·V
IM&A of a Japanese company?
2) Does a Japanese company have cultural adaptive ability when it is in a passive
position, when being merged and acquired by an overseas company?
3) What factors are important for a successful IM&A when a non-Japanese company
merges and acquires a Japanese company?

MethodParticipant and Interview
The present study is a qualitative study that examines the case of a non-Japanesecompany (Company X) merging with and acquiring a Japanese company (Company J).
The present study focuses on the culture clashes that the Japanese company
experienced in the IM&A. The current study also focuses on language use in the IM&A
and its management. For data collection we interviewed a Japanese person who waspreviously a director in Company J. We cannot identify the type of industry of the
FRPSDQLHV DQG WKH SDUWLFLSDQW·V SHUVRQDO LQIRUPDWLRQ LH DJH JHQGHU  GXH WR
confidentiality issues. We interviewed the individual for approximately two hours on
October 17, 2011 and June 27, 2012. Schwandt (2001) suggests that ´>V@RFLDODFWLRQFDQ
best be understood from the accounts and perspectives of the people involved, and thus
WKH IRFXV LV RQ DQ LQGLYLGXDO VXEMHFWLYH GHILQLWLRQ DQG H[SHULHQFH RI OLIHµ S  7KHinterview consists of two stages (the pre-merger stage, and the post-merger stage) of the
IM&A. Subsequently after the interview, we pointed out the themes of the interview(culture clashes and cultural adaptive ability) and decided to analyze four categories ofcommunication: (1) communication in meetings, which are considered to be significant
business speech events in sociolinguistics; (2) communication outside of meetings
during working hours; (3) communication outside of working hours, which is common in
Japanese business (e.g., drinking with clients or colleagues after work); and (4)language policy in the IM&A company.

Case Study,QWKLVVHFWLRQZHUHSRUWRQKRZD-DSDQHVHFRPSDQ\·VFRPPXQLFDWLRQDQGFXOWXUH
have changed during the process of an IM&A (i.e., at the two stages of the pre- andpost-IM&A), and we then report on the changes in language policy of management andhuman resources in the IM&A.

Background
Company J, a Japanese company where a participant in this study previously worked
6152

as a director, was a domestically well-known company that fell into financial difficulties.
The CEO of Company J confidentially planned to merge with a non-Japanese company,
Company X. The employees of Company J, including the participant in the present
study, did not know of the IM&A plan at that time. Company J preferred an IM&A to adomestic M&A (DM&A).

Corporate Culture of Company J&RPSDQ\-·VFXOWXUHZDVYHU\OLEHUDOZLWKDQHQYLURQPHQWWREHIUHHWRWU\VRPHWKLQJQHZ &RPSDQ\ -·V HPSOR\HHV FRXOG VD\ ´1Rµ HYHQ WR WKHLU VXSHUYLVRUV ZKLFK LV WKHopposite of what is generally considered acceptable with regard to the Japanese
QDWLRQDOFXOWXUH LH-DSDQHVHSHRSOHUDUHO\VD\´1Rµ 2QWKHRWKHUKDQG&RPSDQ\;·V
culture is more collective than that of Company J (the Japanese company) in
management. Company X applied a policy of standardization in management, whereby
management became top-down oriented with their top executives applying strong
leadership.

Communication at the Pre-IM&A StageAt the beginning of the merger, superficially there was no culture clash. However,there was a differing recognition of the project to examine the possibilities of an IM&A
between Company J and Company X. The mission of the project was to make plans for
management after the IM&A (i.e., the size of downsizing). The results of the project
were significant for both Company X and Company J. The pre-IM&A project had two
LPSRUWDQWSXUSRVHV  &RPSDQ\;KHDGTXDUWHUV·GHFLVLRQRQWKH,0 $RI&RPSDQ\-
DQG  &RPSDQ\;·VPDQDJHPHQWSODQDIWHUWKH,0 $RI&RPSDQ\-$SSUR[LPDWHO\
the same number of employees of Company X and Company J participated in the project.
&RPSDQ\;·VHPSOR\HHVDVNHG&RPSDQ\-·VHPSOR\HHVWRFUHDWHEDVHGDWDIRUWKH,0 $
plans of the project. Only English was used in the project. Communication between
Company X and Company J employees took place in meetings during working hours.
There was no communication outside of meetings or of work. Company X employees
QHYHUZRUNHGRYHUWLPHDQGGLGQRWVHHPLQWHUHVWHGLQ&RPSDQ\-·VRULJLQDOFRUSRUDWH
culture, Japanese culture, or language (Japanese).
Several people in each section of Company J participated in the project without
knowing that it was the first step in a merger with Company X. Company J employees
thought that the merger would be a 50-50 merger and not an M&A. In other words,&RPSDQ\-·VSURMHFWPHPEHUVWKRXJKWWKDWWKHLUSRVLWLRQZDVHTXDOWRWKDWRI&RPSDQ\
X. The results (report) of the project became part of official documents that Company X
employed for their decision on business administration after the IM&A (e.g., the size of
GRZQVL]LQJLQ&RPSDQ\- ,QRWKHUZRUGV&RPSDQ\-·V&(2DQGHPSOR\HHVZHUHQRW
aware that the results of the project would have the official force and validity that were
important for Company J employees after the merger. Therefore, each section of7153Company J did not necessarily select the best people for the project. Furthermore,
English ability was given priority in the selection for Company J members of the projectrather than work performance.
Company X did not have sufficient knowledge of the Japanese market and used the
project for their decision-making in the IM&A with Company J. At the pre-stage level ofthe IM&A, there was the possibility that Company X might reject the IM&A, based on
the results of the project. Company J (from the top to the lower-level employees) madethe merger with Company X their highest priority because they had pride of being oneof the leading domestic companies in the industry and they did not want a domestic
merger with a lower-rank domestic company. Moreover, Company J thought that they
could change the contract for the IM&A (i.e., agreement at the pre-stage project level)with Company X after the IM&A. Company J did not become accustomed to the contract
business culture and customs of Company X, which are not common in Japanesebusiness and management. Following the pre-merger project, Company J realized&RPSDQ\;·VPDQDJHPHQWVW\OHDQGFRUSRUDWHFXOWXUHDQGH[SHULHQFHGZKDWLVNQRZQ
as culture clash. However, as described earlier, Company J made the merger with
Company X a priority, and showed the data that Company X had expected in the
pre-stage project. The data in the pre-stage project did not necessarily illustrate&RPSDQ\ -·V DFWXDO VLWXDWLRQ 7KXV DW WKH YHU\ ILUVW VWDJH RI WKH ,0 $ WKHUH ZHUH
large differences in recognition of business customs and culture between the twointernational companies, which gave rise to misunderstandings and culture clashes
after the IM&A. 7KH SDUWLFLSDQW EHOLHYHV WKDW WKH WZR FRPSDQLHV· PLVXQGHUVWDQGLQJV
regarding the pre-stage project were a major failure for Company J. The participant
thought that the IM&A was a failure because the current merged company had lost
&RPSDQ\-·VXQLTXHVWUHQJWKDQGEHFRPHMXVWRQHRI&RPSDQ\;·VW\SLFDOILUPV
Moreover, the participant suggests that the two parties should share the goals of amerger from the beginning stages. In the present case, Company J should have been
dissolved into Company X, retaining the strength of Company J beyond the power
relations between the strong (merging Company X) and the weak (merged Company J).
The participant also indicates that it is necessary to attempt to understand culturaldifferences in both macro- (corporate) and micro- (individual and personal) levels and to
make efforts for better cross-cultural communication.

Communication at the Post-IM&A Stage
Macro-level culture clash
Company X headquarters determined that the culture clashes between Company X
and Company J rose to the surface following the IM&A of Company X. After the IM&A,
Company J noted that they could not change the plan for the IM&A made by the
pre-IM&A project. Company J realized that there was a strong power relationshipbetween the two companies as the merging and merged companies, and that it was not
8154

a 50-50 merger. The local heads of Company X, some of whom were involved in the
pre-stage project and the heads of Company J were ordered to precisely execute the
IM&A plan from the pre-stage project by the headquarters of Company X.
,Q RUGHU WR IRUFH &RPSDQ\ - WR MRLQ &RPSDQ\ ;·V international group, dozens of
employees of Company X from all over the world were dispatched to Company J, whichgave rise to miscommunication and confusion in the process of the IM&A of Company J.
&RPSDQ\ ;·V QRQ-Japanese employees who came to work in the merged company
were surprised to find that the Japanese top management had not carried out the IM&A
plans that were decided in the meetings of the pre-stage IM&A. However, they could notreport the culture clashes to the headquarters of Company X for fear of being laid off.
Some of them were involved in the pre-stage project and had responsibility for the
results of the project. Communication between the non-Japanese employees who weredispatched by Company X and Japanese employees who had worked there before the
IM&A had only taken place in meetings. However, Japanese employees from the top to
the middle levels shared their opinions with each other through communication inmeetings either during or outside of working hours.
The results of the pre-stage project did not discursively report (cover) the specificcharacteristics of the Japanese market, business customs, management of human
UHVRXUFHV HJUHODWLRQVKLSVZLWKODERUXQLRQV DQG&RPSDQ\-·VKLJK-quality control of
their products.

Executive-level communication
All executives of Company J including the participant had English-speaking mentors
who were sent from Company X. Japanese executives and their mentors worked
together during working hours. They also had an interpreter. The three people werealways together like a team in their office. The participant thought that the systemfailed in communication because the Japanese executives and English-speaking
mentors were not able to communicate, using their own words. Their communication
was always mediated by their interpreter, who was fluent in both English and Japanese,but did not necessarily possess specific knowledge or understand the terminology of theindustries of Company X and Company J. Moreover, listening to the interpretation
between the two was sometimes boring. The participant thought that it even disturbed
their attention to the topic of the discussion and was an obstacle to the communicationand mutual understanding between the two parties. The interpreter was not an expert
in the industry.
Many ex-executives of Company J left the merged company. For some Japanese
executives in the merged company, as a means of communication, Japanese is used at
ERDUGRIGLUHFWRUVPHHWLQJVEXWIRUFRPPXQLFDWLRQZLWKLQ&RPSDQ\;·VLQWHUQDWLRQDO
group, English is used and almost all the present top executives of the merged company
have high English competence.
9
155

Basically, communication between the top executives of Company X and Company J
took place only in meetings. The participant felt that the Japanese executives did not
express their own opinions in meetings. They just nodded while non-Japanese top
managers were speaking in English, and the non-Japanese executives thought that theJapanese executives understood them and agreed with them. The participant thoughtthat the Japanese attitudes gave rise to misunderstanding and miscommunication
between Japanese and non-Japanese executives.
The participant thinks that in order to achieve a successful international merger,
staff members of the two companies need discussion, using their own words without aninterpreter, even though the English of the non-native staff may not be fluent. The
participant feels that there are limitations to communication mediated by aninterpreter.

The

participantsuggeststhat,

ratherthanmentors,

nativeEnglish-speakers should accompany Japanese executives and that Japanese executives
should have the opportunity to speak English and express his or her own ideas inEnglish in their daily life, in much the same way as international sumo wrestlers who
acquire Japanese naturally.

Middle manager-level communication
Some Japanese middle manager-level employees were sent to the country where&RPSDQ\ ;·V KHDG RIILFH ZDV ORFDWHG DQG RWKHUV WRRN (QJOLVK FRXUVHV LQ -DSDQ
Japanese was used in daily business activities. By the time several years had passed
since the IM&A, all the general managers of the merged company were able to speak
English. While Japanese was used in meetings in Japan, English was mandatory inintercultural communication ZLWKLQ&RPSDQ\;·VLQWHUQDWLRQDOJURXSOther employee communication
The merged company gave other general workers the chance to take English courses,
in response to their requests. Regular employees of Company J used only Japanese attheir working places.

Change of Standard for Employment
Company X adopted English ability-oriented employment and human resourcesmanagement. First, employees of Company J who had high English proficiency were
promoted in the merged company. However, the promotions ended in failure, because
success in business requires ability in work as well as English. Many Company J
employees who had high working aptitude left the newly merged company. In otherwords, Company J lost many of their assets at that time.
Next, under the initiative of Company X, new employees were hired from outside
Company J, which also ended in failure. The employees whom Company X hired hadchanged their jobs with foreign-affiliated companies in Japan several times like
10
156

migratory birds and lacked accomplished work abilities or specific skills, as well as
knowledge of the industries of Company X and Company J.

Successful Employment in the Merged Company
Employment of new graduates, which is common in Japan, based on the
FRQYHQWLRQDO &RPSDQ\ -·V WZR HPSOR\PHnt criteria (assessment of personality andability for work) and English ability, was successful. Those employees who were selected
for their work and English abilities (i.e., selected based on their standards of both work
and English ability) played important roles in the merged company after the IM&A.
From these experiences, the participant believes that ability in both work and English
can ensure success in international enterprises.

Discussion
With regard to Research Question 1 (Culture Clashes between a
Non-Japanese Company and a Japanese Company)
Culture clashes came to the surface after Company X (a non-Japanese company)
PHUJHGZLWKDQGDFTXLUHG&RPSDQ\- D-DSDQHVHFRPSDQ\ DOWKRXJK&RPSDQ\-·VWRS
managers and employees noticed that there was a culture clash before the IM&A (i.e., in
the process of the pre-,0 $ VWXG\ SURMHFW  7KH -DSDQHVH FRPSDQ\·V VLOHQFH DQGdiffering recognition of business contracts and customs subsequently caused a serious
culture clash in the IM&A.
Both national and corporate culture clashes were observed in the IM&A. These
culture clashes had not surfaced before the IM&A. One of the reasons was that the top
executives of Company J gave priority to the IM&A over a domestic merger andacquisition, and they thought that they could change the plans that the pre-stage
collaborative project with Company X had made before the IM&A. Company J (theJapanese company) did not become accustomed to the contract-oriented culture ofCompany X, which was considered to be one of the national culture clashes in thepresent case.
The culture clashes appeared after the IM&A. The national culture clash and the-DSDQHVH HPSOR\HHV· ODQJXDJH (QJOLVK  SUREOHPV SURGXFHG PLVFRPPXQLFDWLRQ
between the non-Japanese and Japanese employees within the merged company. The
Japanese top- and middle- level employees did not express their opinions in meetings
because they were not used to discussions at meetings and their English ability was not
sufficient for discussion with the non-Japanese employees.
The corporate culture clash occurred in the IM&A because of different conceptions ofmeetings and decision-making through discussion in meetings. Decision-making
WKURXJK GLVFXVVLRQ LQ PHHWLQJV ZDV LPSRUWDQW WR &RPSDQ\ ;·V PDQDJHPHQW ZKLOH
Company J believed that decisions made during previous meetings could easily be
11
157

FKDQJHGODWHU&RPSDQ\-·VFRUSRUDWHFXOWXUHZDVQRWWRS-down and flexible, which wastotally different from that of Company X. The financial situation within the merged
company has gradually recovered following the IM&A for several reasons. Company X
had then begun adjusting to the local market in Japan, however the Japanese economic
VLWXDWLRQ KDV FKDQJHG VLQFH WKH ,0 $ -DSDQHVH FRQVXPHUV· QHHGV DUH ZHOO VXLWHG WR
&RPSDQ\ ;·V SURGXFWV ,I &RPSDQ\ ; had taken a little more localization-oriented
PDQDJHPHQW WKH PHUJHG FRPSDQ\·V ILQDQFLDO UHFRYHU\ PLJKW KDYH RFFXUUHG PXFK
earlier.

With Regard to Research Question 2 (A Merged Japanese CompaQ\·V
Cultural Adaptive Ability)
The Japanese company and its employees did not have cultural adaptive ability in thepresent case, which differed from the results of previous research on Japanese
FRPSDQLHV· FXOWXUH DGDSWDELOLW\ LQ WKHLU LQWHUQDWional joint ventures overseas (seeWeber et al., 1996). When non-Japanese companies are contemplating an IM&A with a-DSDQHVH FRPSDQ\ WKH\ VKRXOG FRQVLGHU WKH FDQGLGDWH -DSDQHVH FRPSDQ\·V FXOWXUDO
adaptive ability of their national and corporate cultures. Regarding Japanese national
culture, Japanese do not express their opinions in official meetings. Instead, they reveal
their thoughts in unofficial meetings during working hours or outside of working hours.
-DSDQHVH VLOHQFH LQ PHHWLQJV GRHV QRW PHDQ WKDW WKH\ DJUHH &RPSDQ\ -·V -DSDQHVH
employees did not obey the decision (the plan for the IM&A) that was approved inmeetings, because they believed that they could alter the decision after the IM&A. From
WKH SHUVSHFWLYHV RI &RPSDQ\ ; WKH -DSDQHVH HPSOR\HHV· DWWLWXGHV PLJKW DSSHDUVWUDQJH DQG LQVLQFHUH %XW LI &RPSDQ\ -·V PHPEHUV of the pre-stage project team or&RPSDQ\ -·V WRS PDQDJHPHQW FRXOG KDYH H[SUHVVHG WKHLU RSLQLRQV DQG JRW RYHU WKHlanguage (English) barrier in meetings, the culture clashes after the IM&A might havebeen alleviated. However, as there was a power relationship between the two companies,&RPSDQ\-·VDVVHUWLRQVPLJKWEHOLPLWHG

With Regard to Research Question 3 (Important Factors for Successful
IM&As)The present study can provide practical suggestions for successful IM&As,
particularly IM&As of a Japanese company, based on the results.

The importance of decision-making on a merger.
Company J in the present study chose an international merger rather than a domestic
one. We can imagine that selection of a domestic merger in a financially difficult time
would be difficult for CEOs from the emotional aspect because they have been opposedin the same domestic market competitively just before the merger. The participant in
WKHSUHVHQWVWXG\VDLGWKDW&RPSDQ\-·VHPSOR\HHVIURPWKHXSSHUDQGORZHUOHYHOVGLG
12158

not want a DM&A because of their pride as a leading domestic company. However, as
Louhiala-Salminen et al. (2005) suggest, generally an international merger is moredifficult to successfully implement than a domestic merger. The present study shows thedifficulty of an IM&A because of business cultural differences at the very beginningstage of the merger. The final decision on a merger needs to be made with thoughtful
pre-simulation of merging and meticulous study of the candidate companies, including
history, culture, identity, and business style. Furthermore, businessmen and businessscholars should exchange their knowledge and experience for the success of M&As. For
H[DPSOHLI&RPSDQ\-·VWRSH[HFXWLYHVFRQGXFWHGDFDVHVWXG\RI&RPSDQ\;·VSUHYLRXVIM&A, they might have made a different decision on their merger (Collins et al., 2009).
&ROOLQV HW DO   ILQG WKDW D FRPSDQ\·V SUHYLRXV H[SHULHQFH ZLWK ,0 $ LV PRUH
predictive of subsequent IM&A success or failure.

Ideal employees in an international company.
Not only Japanese companies but also international enterprises tend to consider thata person with high English ability can be an asset for their overseas business activities.
However, the results of the present study suggest that work capability is important andmay be more of a priority than ability in English. This does not mean English
proficiency is not necessary for successful international business. But it is important todetermine the threshold level of English and the minimum requirement of English
ability in specific business fields.

Language in Japanese multinational enterprises.
The participant in the Japanese company in the current case study suggests thatJapanese employees should use their English without using an interpreter as a meansof FRPPXQLFDWLRQ LQ D PXOWLQDWLRQDO HQWHUSULVH 7KH SDUWLFLSDQW·V VXJJHVWLRQ GLIIHUVIURP <RVKLKDUD·V  VXJJHVWLRQ WKDW -DSDQHVH FRPSDQLHV VKRXOG HPSOR\interpreters and translators. Their differences may stem from different contexts. As
reviewed earlieUPRVWVWXGLHVRI-DSDQHVHFRPSDQLHV·LQWHUQDWLRQDOEXVLQHVVKDYHEHHQ
done from the Japanese company-centered perspectives in the case of expanding theiroverseas business. However, cases of Japanese companies being merged with andacquired by foreign enterprises will increase in the future. Further research is needed toestablish an ideal model of communication in specific contexts such as Japaneseenterprises overseas or foreign enterprises in Japan.

0HWKRGVIRUHPSOR\HHV·DFTXLVLWLRQRIEXVLQHVV(QJOish.
The participant in the present study suggests that Japanese employees should acquirebusiness English in their overseas work, which confirms the findings of Yoshihara(2011) and Yasumuro (1982). The use of business English at Japanese companies andmultinational corporations in Japan will be increasingly required in the future.
13
159

Empirical research on the effectiveness of overseas work or only use of English in theworkplace on non-QDWLYH VSHDNHUV· HJ -DSDQHVH HPSOR\HHV·  DFTXLVLWLRQ RI EXVLQHVVEnglish is necessary to establish effective methods for non-QDWLYH (QJOLVK VSHDNHUV·acquisition of business English.

Power relations and international communication in business.
It is challenging to establish mutual cross-cultural communication in businesssituations with a relationship of power. In the present study, Company X, thenon-Japanese company, had absolute power over Company J because Company X
merged with and acquired Company J. Louhiala-Salminen et al. (2005) suggest that themutual understanding of the two parties is essential for a successful cross-bordermerger. However, the two parties in an IM&A need to realize the difficulties in reality
because of the existence of power relations between them and consider the benefits aswell as the costs of an international merger before making their decision. Company X
attempted to use mentors as a bridge between them and Company J. Further studies of
the role of mentors as well as interpreters (e.g., their discourse analyses) are needed in
the future with regard to the success of IM&As.

Conclusion
The present study examines culture clashes and cross-cultural communication fromthe perspective of a Japanese director. The present study is a case study that only
LQYHVWLJDWHVWKHGLUHFWRU·VSRLQWRIYLHZLQthe process of an international merger and
DFTXLVLWLRQ)XUWKHUUHVHDUFKRQRWKHUV·SHUVSHFWLYHVHJWKDWRIDPHQWRULQ&RPSDQ\
X or an interpreter, can elucidate the outlines of what was actually going on in the
IM&A. The genders of the director, mentor and interpreter may have influenced theircommunication, as well as their positions in the merged company.
In spite of their limitations, the results of the current study offer practical
VXJJHVWLRQVIRUD´FXOWXUDOILWµZKLFKLVWKHNH\WRVXFFHVVIXO,M&As. The current casestudy also suggests the importance of decision-making and specific analyses of target
FRPSDQLHV·QDWLRQDODQGFRUSRUDWHFXOWXUHVSULRUWRDQ,0 $DVZHOODVWKHUHFUXLWPHQWstandards for local employment and promotion of international enterprises, all of which
FDQ EH VDLG WR EH WKH SUHVHQW VWXG\·V SUDFWLFDO FRQWULEXWLRQV WR LQWHUQDWLRQDO EXVLQHVV
and M&A, particularly international business with Japanese companies.
The theoretical contribution of the present study is the examination of both the preand post-stages of a non--DSDQHVH FRPSDQ\·V ,0 $ RI D -DSDQHVH FRPSDQ\ DQG WKH
demonstration of differing appearances of culture clashes at each stage, which werecritical to the business and management of the IM&A company in Japan. Furthermore,
the current study focused on a Japanese company that was merged with and acquiredby a non--DSDQHVH FRPSDQ\ ZKHUH WKH -DSDQHVH FRPSDQ\·V SRVLWLRQ ZDV ODUJHO\
14160

passive. As the reports of JETRO and METI show, more and more non-Japanesecompanies have recently invested and merged with Japanese companies, and havedeveloped business in Japan. The results of the present case study can provide
important advice to non-Japanese companies on achieving success in business withJapanese companies.
The current study also analyzed the culture clashes in an IM&A from the perspectivesof both business and applied linguistics. Collaboration work in different disciplines (e.g.,anthropology, business, linguistics, management, sociology) can give more profoundinsights into IM&As. The potential for international enterprises merging with andacquiring Japanese companies in the future will increase not only in Japan, but
throughout the world. Furthermore, studies of culture, communication and businesslike the present one will ensure a clear outlook on business globalization (Lipartito,2008). We believe that we have shed a little light on a successful international M&A andprovided useful information to companies whose business and business communication
has globalized.

Acknowledments
The present study was supported in part by a Grant-in-Aid for Scientific Research (C),No. 24234567 from Japan Society for the Promotion of Science. An earlier version of thisarticle was presented at the 29th Euro-Asia Management Studies Association Annual
Conference (November, 2012, Singapore). We would like to thank Chie Iguchi for her
insightful comments on an earlier version of this article. Our sincere thanks go to theparticipant in this study. We are also grateful to the three anonymous reviewers and theeditors of Academy of Multinational Enterprises for their constructive suggestions andcomments on this article.

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