Cultural Perspective

Presented by:
Sarang Gaikwad
Vishal Vyas
ESSCA Yogendra Singh
BUDAPEST SUMMER PROGRAM 2010
Rifat Ahmed
Surabhi Singh
 About the Companies
 Royal Biscuit Company
 Edeling GmBH
 Introduction to the Case
 Issues faced
 Analysis
 Clash of Cultures: Organizational Differences
 Leadership Styles
 Acculturation Strategy
 Pre Merger Recommendations
 Bibliography
 Royal Biscuit Company
 10 year old London based food company
 Industry Power house
 Transformed snack food industry
 CEO: Sir John Callaghan
 Edeling GmbH
 120 year old Munich based company
 Family owned
 Beloved German brand and model employer
 CEO: Heinz Burkhardt
 England’s Royal Biscuit Company and
Germany’s Edeling GmbH are in the final
stages of a merger. Will a global culture
clash cause the deal to crumble?

www2.syngenta.com/en/downloads/syngenta_oil_wasser_03_05_2004.pdf

http://hbr.org/2004/05/oil-and-wasser/ar/1
 Challenges faced by CEO of Royal Biscuit Co. to
collaborate the framework and organizational structure of
the new merging company.
 Merger of equals;
 Create synergy between two former competitors to form
the world’s second largest food company
 The New Merging company to have:
 Headquarters: London
 CEO: Sir John Callaghan
 Non Executive chairman: Heinz Burkhardt
 Board Members: 7 out of 10 from Great Britain
 Management and Supervisory Board
 Formation of guiding principles
 Whose best practices should be abandoned?
 Leadership
 Appointment of New Leaders
 Leadership development Program
 “We” and “them” attitude.
 Employee Retention
 German and British employee perspective
 Time pressure by Investors and Stockholders
 Clearance from both the govt.
National Culture
Hofstede’s Dimensions Germany Great Britain

Power Distance 35 35

Individualism 67 89

Uncertainty Avoidance 65 35

Masculinity 66 66

Long Term Orientation 31 25

 Both have low PDI
 Indicates their care for equality and opportunity
 Reflects initiative of “merger of equals”
 Individualism:
 Germans- Value group success through collective
cooperation
 British- Value individual success through competition
 Uncertainity Avoidance
 Germans- More rule-oriented
 British- Less risk aversed
 Long Term Orientation
 Germans- Focus on long term Paybacks
 British- Focus on short term results
 Royal Biscuit Co.  Edeling GmbH
 Corporate Structure  Family Owned
 Short History  Long History
 Modern  Traditional
 Decentralized  Centralized
 Empowered employee  Team Work
 Task Oriented  Formal procedures
and regulations
 Royal Biscuit Co.
 Consider it as an art
 Cultural fit and emotional intelligence place high
importance
 Energetic and dynamic leadership
 Edeling GmbH
 Consider it as a Science
 High academic achievement and outstanding
recommendations
 Training before joining
 Integration – Royal Biscuit Company
 Multinational Company
 Motive to expand in different locations
 Modern and Flexible

 Separation – Edeling GmbH

 Very Rigid
 Long and proven work culture as perceived by
Germans
 Traditional ways of doing things
 “We” and “them” attitude should be replaced by
“Us”.
 Group of managers should’ve been appointed
from both the company
 New strategy following the common guiding
principles
 It shouldn’t be merger of equals, i.e., one has to
be the acquirer.
 Headquarters should be at a Neutral location
 Flow of information and communication between
the two merging companies.
 (2004, May 03). Retrieved May 20, 2010, from www2.syngenta.com:
www2.syngenta.com/en/downloads/syngenta_oil_wasser_03_05_20
04.pdf
 Creating a Global Business Composed of Two Culturally Different
Business. (2009, June 17). Retrieved May 22, 2010, from
http://predicate.wordpress.com:
http://predicate.wordpress.com/2009/06/17/creating-a-global-
business-composed-of-two-culturally-different-business/
 (n.d.). Retrieved May 22, 2010, from http://www.aubg.bg:
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GZZ050%2Fstrategic%2F633002648699062500.ppt&rct=j&q=oil+an
d+wasser+case+study+analysis&ei=Fu_7S4z8GNL3Oceige4B&usg
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