The marriage life

作者：韩维熙，英国Southampton University管理学在读博士，北京联合大学教师。曾供职于商业银行，主要研究供企业整合及供应链管理。 Han Weixi, PhD of School of Management, University of Southampton, Lecturer in Beijing Union University. Several years experiences in Commercial Bank, research in Enterprises’ Integration and Supply Chain Management.（作者更多文章More）

People will get married when they fall in love. Enterprises will merger because of benefits. Merger and Acquisition looks like marriage and the Integration likes the marriage life. Marriage will have the conflicts of habits, behavior, beliefs, personality etc., enterprise integration, too, will encounter issues such as beliefs, behaviors and attitudes. The integration also will encounter such as beliefs, behaviors and attitudes issues. The integration is concentrated on the economic environment, finance, strategy, organization theory, human resources management and supply chain management.

As the global market competition intensifies, the product life cycle shortens, the customer demand, labor costs and the price of raw materials keeps rising, Chinese enterprises are facing increasingly serious challenges. How to deliver the products to customers in exact time, right place, appropriate way and the lowest costs is a new challenge of manufacturing enterprises.

With the influence of global industry-upgrading and economic integration, the scale and number of mergers and acquisitions has shown a continuous rising trend, and global merger and acquisition activities are at an unprecedented level. Following the tidal wave of mergers and acquisitions all over the world, merger and acquisition activities in China have also become more and more frequent, and the merger and acquisition actions in many large enterprises have become a conspicuous economic phenomena.

The automobile industry is one of the most important industries in China. As an industry with prominent large scale profit and large forward-backward industrial correlativeness, the core of management in the auto industry is to achieve a large scale economy under the state of effective competition.

With China's accession to the WTO, the gradual devotion of the Chinese government to protect the national automobile industry will be greatly reduced, there are more and more open markets and while the Chinese automobile industry was just getting started, it is also faced with the enormous pressure of competition, in the face of increasingly fierce competition in China.

In the face of the increasingly intense competition, the Chinese automobile industry has to optimize the industrial organization structure and achieve the optimal allocation of resources as quickly as possible, and learn how to seize the opportunity to develop quickly. Upgrading international competitiveness has become an urgent problem.

The establishment and advancement of core competitiveness is a necessary condition for the survival and development of enterprises. The core competitiveness is able to optimize enterprise’s resource allocation and achieve the final purpose of saving enterprise competition costs and the maximization of enterprise profits, which are the most valuable assets in enterprise and are also difficult for rivals to imitate. These kinds of strategic assets are able to bring continual competition advantages for enterprises. If an enterprise wants to remain invincible and constantly develop under the intense competition, it should establish enterprise’ competition advantages, that means it should build up the core competition ability of the enterprise. In China, the rapid development of the Chinese automobile market has attracted the attention of the global automobile industry and investors in each relevant field. In recent years, overseas automobile enterprises have invested and cooperated in China in various ways to strive to be the first due to the huge temptation of Chinese the automobile market. Therefore, the competition in the domestic automobile industry has become fierce. In the intense market competition, the domestic automobile enterprises should not only enhance the enterprise strength, but they also need to learn the advanced technology and experience of overseas enterprises actively from the opening-up of visual angle and achieve the late-development competition advantage. The establishment of merger and acquisition is a good way to do this.

Corporate merges and acquisitions is always the hot spot in the theory and practice. In the micro level, enterprises hope to enhance the core competition, adjust the capital structure, improve the economy of scale and so on through merges and acquisitions. In the macro level, merges and acquisitions can influence industrial structure and social resource allocation, which attracted the high attention of governments from every country and even affect the policy formulation.

Horizontal merges and acquisitions is an important form of M&A. The so-called horizontal M&A means merges and acquisitions among two or more enterprises who manufacture and sell the same or similar products. Among them, the departments or the enterprises with the advantage of capital who directly take participation in purchasing, displacing and divesting the similar industries or departments are called acquiring enterprises, while the enterprises, being acquired, displaced or divested, are called the acquired company. It is generally thought that horizontal M&A can better bring the synergistic effect into play, integrate enterprise resource and improve the market share, so it is beneficial to improve the sustainable development ability of enterprises, and it is one of the important methods for enterprise growth.

However, mergers and acquisitions are not only simple enterprise mergers, union and enterprise spin-offs under the complex economical environment, but are a complex and scientific system operational process for the upgrade of enterprise competitiveness by multi-angle and all-round mergers and acquisitions and the following integration is based on the link of capital connection. Every year there are many cases of mergers and acquisitions at home and abroad, but the success rate is low, compared with the expectation for the strategy of mergers and acquisitions, many enterprises or part of an enterprise do not achieve the anticipated target after a merger and acquisition. Research into the ultimate causes of failure in mergers and acquisitions and paying out high costs, reveals that the problem is caused by the shortage of post-merger integration, resulting in the matching problems on strategy, organization, management, personnel, culture and other factors between merger and acquisition enterprises and targeted enterprises.

M&A is a very complex economic phenomenon; value creation in M&A is not produced in the process of transaction, but realized through higher utilization efficiency by reintegrating and rationally allocating enterprise resources after transaction, and the success of integration after M&A is also a key factor to realize synergy effects of cross-border merger & acquisition.

Integration of cross-border mergers and acquisitions is influenced by many factors, in different circumstances, the difficulty of integrating different. The depth and breadth of integration is also different.

Cross-border mergers and acquisitions is facing very complex social and cultural environment, this is the first thing to consider cross-border M & A integration factors.

The size of the social and cultural differences will affect the difficulty of integration.

The strategy of integration is now a necessary requirement for proposed mergers and acquisitions practice. There is a special meaning of this project for current Chinese economic restructuring. In general, the smaller of the social structure, ethnic and cultural background differences, the easier of integration. If both social and cultural environment have a huge difference, the difficulty of integration will increase accordingly. This will impact to some extent on the choice of multinationals integration strategy.

We hope the automobile enterprises after the M&A they will enjoy the “honeymoon” days and survive the integration stage. Such as the marriage vow said “to have and to hold from this day forward, for better, for worse, for richer, for poorer, in sickness and in health, to love and to cherish, so long as we both shall live.” The enterprises will improve core competitiveness and sustainable development.