A company may acquire another company in either the same country or from another foreign country. As much as there can be a difference in ethics and culture in another country the same exists within a given country. These ethical and cultural issues if not combated, may negatively affect the performance of the group of companies.
Companies coming from two different regions would obviously the faced with language problems. Take for instance the acquisition of Transgas by RWE. Transgas is based in the Republic of Czech. These are two different nations with different languages.
Another cultural issue associated with acquisitions in the attitudes of the members of both the investor company and the acquired company. This can either be positive, i.e., where the members value each other’s positions and roles, or negative where members undermine each other’s significance in the group.
There are also differences in the way the processing of information is done. Whereas one electricity company has been practicing a centralized information processing system, the other may be decentralizing this function. Companies from different nations may be observing different national holidays and how this will be reconciled after an acquisition is another cultural issue. It may also be the culture of one company that shareholders have to get high returns on their investment with or without profits. The other company’s focus would be on divestments retaining as many profits as possible.
Ethical issues associated with acquisitions are issues like competition. The two firms may be former competitors now joining forces and forgetting their rivalry. It would be quite interesting to see how the two former rivals would now be working together for a common objective.
There is also the issue of downsizing after acquisition. The group may reduce its workforce for operational efficiency. They have to do this professionally to avoid confronting the legal issues and labor laws the wrong way.
After an acquisition has taken place, many changes follow and the group starts doing things in a different way. This may be in the processing of electricity, marketing, recruitment and selection, to name just but a few. In adapting to the above changes, the group must consider doing them ethically and professionally in a manner not likely to injure /harm other companies in the sector. They have to have fair play as this would also safeguard them from unnecessary legal tussles.
Differences in both ethics are and the culture of two different companies can affect their performance after a merger. Reconciling these differences than by both management is inevitable.