Sang Hoon Nam  Young Wie Han

Alcan Taihan Electric Wire Co Koralu employee manager culture clash

Mergers and acquisitions (M&As) have been a popular strategy for organizational growth in the world of business. Despite their popularity, more than sixty percent of M&As fail. Research suggests that one of the biggest reasons for such high failure rates is the culture clash taking place during the process of organizational integration. This article examines a unique case of integrating three organizational identities into one in a cross-cultural context. Alcan Taihan Aluminum (ATA) was created when Alcan, a Canadian multinational corporation, merged with Taihan in Korea in 1999. Later on, ATA acquired Koralu, Taihan’s former competitor. The culture clash between the North American expatriates and the Korean managers and employees was characterized as a clash between two organizational cultures: ‘lead and support’ and ‘control and command.’ Alcan’s management practices were rooted in North America, reflecting its cultural orientations such as high individualism, low uncertainty avoidance, and low power distance. On the other hand, the management practices from Taihan and Koralu were rooted in Korean culture characterized by low individualism, high uncertainty avoidance, and high power distance. There were other problems that had to be overcome as well, including problems in communication caused by differences in the first language of the expatriate managers and the Korean employees. Based on interview and archival data, this research examined the effective integration strategies and practices that helped ATA overcome the cultural clash during the first three years of their operation. We also discussed the potential problems and managerial challenges that had emerged during the process of cultural integration.