Organizational Behavior Case Study



Organizational Behavior Case Study

Problem Statement

To understand deeply the critical aspects related to Chinese M&As, a case study analysis is proposed, following the framework describe in the first part of this paper. The “players” of the case are the Chinese Qianjiang (QJ) group (the acquirer) and the Italian Benelli company (acquired). The acquisition took place in September 2005 when QJ reached a deal to buy the Benelli company from an Italian industrial group, beating the offer made by a Russian sports car manufacturer. (Bartlett , 2011)

After the acquisition some problems arose due to the cultural differences between the Chinese and the Italians in terms of behavior, specifically concerning business approach. Human relationships were difficult due to different mentalities, habits and background Problems stemmed not only from differing organizational cultures, but also from the differing working environments in China and Italy. There were many examples of such communication problems in the technical area. The Chinese and the Italian technical departments should have worked together in harmony to combine and optimize their complementary skills; however, working together was difficult due to language and cultural differences. These problem were delaying the development of important projects. Another critical field was that relating to mules and laws. In some cases, administrative actions were perceived as nonsense by both Italians and Chinese. Behaviors relating to specific Italian fiscal or civil rules were sometimes judged as “wrong” by the Chinese: likewise, Chinese rules seemed “strange” or unacceptable to Italian employees. In this sense, the problem facing Benelli and its new Chinese owners concerned how to improve cross-cultural understanding. Problems in communications and cultural differences created a rift between management and employees, impeding the implementation of strategy and harming the company's potential.

Other difficulties in managing the “new” Benelli were due to the great focus on efficiency, which also had negative consequences. Domestic consumers in China were price-oriented: in general, this resulted in Chinese companies paying more attention to reducing costs and cutting investments that had long-temi or intangible remains QJ's international expansion required it to give up this traditional way of doing business and to reconsider the low-cost approach. This focus on cost-savings led the company to give less importance to sales promotion. (Bellabona , 2009) A key problem for Benelli and its new Chinese owners was to improve the worldwide strength of the brand as well as the effectiveness of the sales network to increase market share. Benelli products, especially its motorcycles, had a huge potential to compete with the most important players in the market, but their market share in both Europe and in the United States was low. QJ had expected fewer problems in penetrating the western market through the Benelli brand; however, delays were caused as a result of having to rebuild and prelaunch the brand image internationally, as well as having to re-establish international supplier relationships. Marketing investments, especially for sales promotion, post-sales assistance and customer cure were needed. (Aykut , 2010)

In sum:

difficulties in the integration process arise in ...