Cultural Intelligence

2249 Words Jan 13th, 2013 9 Pages
Cultural Intelligence
2012
Work Group C
Organizational Behavior
11/2/2012

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Success in the today’s increasingly integrated economy requires the ability to adapt to different cultures. The specific set of skills needed to succeed in unfamiliar cultures make up an individual’s Cultural Intelligence (CQ). The aim of this paper is to illustrate the concept of CQ through the analysis and evaluation of the case of the merger between Kraft and Cadbury.

Contents CQ: Cultural Intelligence 1 Components of Cultural Intelligence 1 Cultural Intelligence in Mergers and Acquisitions 2 Kraft Takes Over Cadbury 2 Cadbury 2 Kraft Foods 2 Pitfalls of Poor Cultural Intelligence 3
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(Early & Mosakowski, 2004)
Cultural Intelligence in Mergers and Acquisitions
“A return to a conglomerate ownership was always going to be challenging from the perspective of morale, motivation and momentum”
Oftentimes, M&As look like an easy way to improve a company’s portfolio and market position. Disney’s acquisition of Pixar is a compelling example of successful M&As. However, the dangers of such M&A agreements tend to be underestimated (Rein, 2009). The merger of AOL & Time Warner was disaster because of the lack in harmony and collaboration (DiMaggio, 2009). One of the biggest mistakes acquiring companies can fall into is taking the cultural differences of the acquired company for granted (Rein, 2009).
Kraft Takes Over Cadbury
In January 2010, Kraft Foods acquired the British confectionary company Cadbury, citing portfolio enrichment and faster long-term growth opportunities as the main reasons for the takeover (Thompson, 2010). Outside observers argued that the size difference and cultural mismatch would require an elaborate integration strategy for the merger to succeed. Cadbury chairman Roger Carr also expressed his concern, “a return to a conglomerate ownership was always going to be challenging from the perspective of morale, motivation and momentum” (Lucas, 2011).
Cadbury employees on all levels felt unable to adapt to the new culture. One Cadbury employee pointed out that, “to be
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