Leadership and Culture in Transnational Strategie Alliances By Ali R. Malekzadeh and Afsaneh Nahavandi The strategie management approach to mergers is strongly dominated by U.S. industrial organization economics models and theories. These views focus on the financial and operational aspects of mergers at the expense of cultural and human implementation issues. Such approaches, although not always highly successful, have continued to dominate because operation in a seemingly unicultural environment does not demand immediate attention to cultural factors. Although many sub-cultures exist, the differences do not have the magnitude of transnational cultural differences. Therefore, within the U.S. organizational cultures differ, but the dominant national culture, in spite of numerous sub-cultures, does not significantly. It is therefore easy and efficient, at least in the short term, to ignore culture as a factor in merg- ers. However, as more and more U.S. firms are merging with foreign firms, and as the traditional U.S. melting pot is being replaced with a cul- tural diversity mosaic, the ethnic and national cultures are becoming more important. For example, when a Japanese firm acquires a U.S. firm, the two entities seem to concentrate on whether the Japanese and the U.S. cultures can blend, rather than whether the two unique cultures of the two organiza- tions can be meshed. The economic and financial models focus on merger planning and merger motives but fail to address the post-merger issues that ultimately determine the fate of a merger. Such economic approaches also fail to fully consider the role of leadership and its influence in the success of mergers. A very refreshing and highly productive approach to mergers comes from Europe where the increasing occurrence of transnational alliances has placed issues of national culture, cultural clashes, and acculturation at the forefront of all merger debates. One cannot live, do business, or visit any European country without becoming aware of cultural differences and their role in determining individual behavior and organizational performance. The predominance of culture in Europe has, therefore, led practitioners and re- searchers to include culture as a key variable in their study of mergers. Much more than U.S. academic and practitioners' studies of mergers ever Brought to you by | UCL - University College London Authenticated Download Date | 12/20/19 5:24 AM