Most people have seen China acquisition as the realm of lawyers and financial auditors. Indeed, they have their value, but people are the key to your China acquisition. You must not overlook the culture and people you are acquiring. You must not ignore the attitude of the local government people. And acquisition is one of the biggest change management challenges you will ever face.
In my work on the before of acquisitions, I counsel and begin a strong look at the culture of the company to be acquired in China. Emphasis here can save untold trouble after acquisition. Also, some Western companies are not ready for China acquisition.
China Acquisition – Culture, Culture, Culture
A strong and cohesive culture inside the acquisition is critical unless you plan to let nearly everyone go. That is expensive and not for the weak of heart. So examine the acquisition to see if they have a good management team and good worker engagement. Find out who will leave if the acquisition takes place. Determine what their cultural values are whether written or not. All companies have values actually. Many are not good, and proper investigation can bring them to light.
What Do You Need?
Once you know what you have, you can think through what you need to have post acquisition. Do you need English reports or ERP? Do you need certain reporting procedures? How teachable are the people in the acquisition? Do you require transparent procedures? Really sit down and think through what your values are. Think through what is important to you and drives your decisions. Find out if you can put the two company values together or whether that is the red light for the project. Does the Chinese company desire Westernization which unavoidably will change the factory? Who will be the winners if you acquire and how will that influence the others? Think through if you can get the whole factory behind changes in the culture you will need. Will you have to let people go? Will this be easy or hard? People dislike change. People resist change and none more so than China. It is a very stubborn culture.
The final before questions I will raise today are: Do you have the leader of excellence to lead this on site change? Does he or she have the leadership ability to bring culture change to your desired state? If not, are you committed to find that person and support them?