In the previous article (Cross-Cultural Management #6), I wrote about public image and the “need to be recognized” that lives inside us.
Now I’ll shift from individual to organizational scale. In cross-border M&A, the deepest and most persistent friction isn’t about systems or processes — it’s about what “our company” fundamentally means to the people inside it.
“Family” versus “Platform”
The M&A case in class involved an emerging-market company acquiring a Japanese manufacturer’s business. On the surface, it was framed as “performance-based culture vs. seniority-based culture.” But the real issue ran much deeper.
For Japanese employees, the company was a “family.” Bosses protected subordinates. Trust relationships were the medium for producing results. Security and belonging were assumed. Years of service accumulated as institutional memory and earned respect.
This “company as family” came with invisible, unwritten rules: if you’re in trouble, your boss will sort it out. Even if short-term results aren’t great, long tenure builds “track record.” The feeling of “I belong here” was itself the company’s value to employees.
For the acquiring company, the company was a “platform for accessing the market.” Each employee was an independent value creator, directly facing customers and accountable for personal results. The boss’s role wasn’t to direct but to support. Individual autonomy was the premise — the organization didn’t protect the individual; the individual used the organization to deliver value. Compensation reflected market value. Security came not from belonging, but from personal capability.
Same phrase — “our company” — but entirely different meanings packed inside. This gap in organizational identity was the single greatest barrier to integration.
Having spent more than 25 years in IT, the question “What is a company?” has appeared in different forms throughout my career. My employer was originally a wholly-owned subsidiary of a Japanese company — the epitome of “family.” Then it was partially sold to a foreign firm, and later acquired by an overseas company. Each transition shook the fundamental premise of “what the company is.”
I vividly remember what Japanese managers said after the acquisition: “Will this CEO still be here in three years?” “Why should we take risks to execute a headquarters policy?” These weren’t complaints — they were expressions of fundamental anxiety about losing the sense of being protected. The fear that “the company is no longer a family.”
“Be your own boss” — easy to say, hard to accept
The acquiring company promoted an “inverted triangle” where customers sat at the top. Employees defined their own customers and took ownership of results, while bosses supported from below. Rational and transparent.
But for Japanese employees, this was not easy to accept. Not because they were “waiting for instructions,” but because the shift demanded moving from “security through belonging” to “accountability through market performance”.
“Be your own boss” is a clear and appealing concept. But for someone whose self-identity has been built on “contributing as a member of the organization,” it means redefining who they are. A classmate put it perfectly: “This isn’t a capability problem. It’s an identity problem.” That single comment shifted the entire discussion. It’s not about skills training to adapt to meritocracy. It’s about “Who am I?” “Where do I belong?” “What makes me valued?” When the foundations of self-perception are questioned, resistance is inevitable.
In my own workplace, the same dynamic played out. Our Indian parent company views “failure as part of the growth process” and prioritizes speed over certainty. The Japanese side holds a deeply-rooted culture of “preventing risk before it materializes.” Whether the same event is seen as a “challenge” or a “risk” depends on which organizational identity you carry — and that difference made collaboration genuinely difficult.
The Intercultural Sensitivity Development Model
Milton Bennett’s Developmental Model of Intercultural Sensitivity (DMIS) was invaluable for understanding this case:
| Stage | State | How it shows up in M&A |
|---|---|---|
| Denial | Not recognizing cultural differences | “That foreign company has nothing to do with us” |
| Defense | Feeling superior, dismissing others | “Their way is wrong” |
| Minimization | Downplaying differences | “We’re all human, it’ll work out” |
| Acceptance | Recognizing differences have valid reasons | “Different, but each has its logic” |
| Adaptation | Adjusting behavior to fit other cultures | “Let me try their approach” |
| Integration | Incorporating other cultures to create new value | “Let’s build something new from our differences” |
Crucially, people at different stages coexist in the same organization. Some are in defense while others have reached acceptance. You can’t move everyone at once.
The instructor emphasized something counterintuitive: the move from “Denial” to “Defense” is actually positive progress. In denial, you don’t even see the difference. Feeling “their way is wrong” means at least you’ve recognized the difference exists. Then “Minimization” — “we’re all the same deep down” — seems benign but actually underestimates the importance of real differences. The model looks linear, but in practice, people move back and forth.
Where would you place most people in your organization on this scale? Where would you place yourself?
Integration doesn’t happen automatically with time. It requires employees to relativize their own cultural assumptions, understand the other side’s rationality, and change their behavior — a deliberate developmental process.
My own experience confirms this. After the Indian acquisition, our organization clearly went through “Denial” (early days), then “Defense” (“their way is wrong”), and after ten years, is moving from “Acceptance” to “Adaptation.” But it took a decade — even with conscious effort, cultural development takes enormous time.
Cultural differences are never one-dimensional
A passage from Ruth Benedict’s The Chrysanthemum and the Sword, quoted in the course materials, stayed with me:
“The Japanese are both aggressive and unaggressive, both militaristic and aesthetic, both insolent and polite, both rigid and adaptable, both submissive and resentful, both loyal and treacherous.”
Culture is never one-dimensional. It always contains contradiction and duality. The moment you stereotype — “Japanese are like this,” “Chinese companies are like that” — you lose the essence.
In this case, the acquiring company defied the “Chinese = authoritarian” stereotype entirely, operating with a flat, transparent culture. The disorientation Japanese employees felt came not from national differences but from organizational principle differences — how each side defined “what a company is.”
Starting with “I thought this” and having it overturned through discussion — that was the joy of this course. I initially believed that “setting a common goal” would resolve cultural collisions in M&A. But class discussion revealed that the process of “agreeing on goals” itself differs by culture. Japanese consensus-building assumes everyone discusses until all agree. The acquiring culture assumed the leader sets direction and course-corrects while executing. Even the meaning of “consensus” was misaligned. Does everyone in your organization mean the same thing when they say “we agreed”?
Trust and information-sharing systems are the key
Another powerful lesson: the absence of trust and information-sharing systems is the fundamental problem.
Japanese employees’ anxiety wasn’t just about change itself. It was amplified by insufficient sharing of what lay ahead, why change was necessary, and what it meant for them personally.
My own company experienced this. For years after the acquisition, “we don’t know what headquarters is thinking” was a common refrain. HQ believed it was communicating; the message just wasn’t being “translated” to the frontline level. Beyond language barriers, the sense of “what needs to be communicated” differed greatly. India assumed “share the big picture, and the field will figure out the details.” Japan didn’t lack decision-making ability — they wanted to “understand the intent behind the direction before acting.”
Bridging this gap requires systems: middle managers as cultural translators, regular dialogue forums, shared success stories. This case and my own experience together convinced me that these mechanisms are make-or-break for M&A integration.
Recommended reading
To understand Japanese cultural duality
Ruth Benedict, The Chrysanthemum and the Sword: Patterns of Japanese Culture (Houghton Mifflin)
Written in 1946 but still remarkably insightful. Benedict’s portrait of Japan’s contradictory characteristics — “militaristic yet aesthetic,” “rigid yet adaptable” — continues to inform how we understand organizational culture today.
For practical M&A cultural integration
Scott Whitaker, Cross-Border Mergers and Acquisitions (Wiley)
Featuring ten experts from nine key M&A markets, this practical guide covers cross-border strategy, cultural alignment, and post-merger integration. Especially useful for understanding how cultural factors shape integration success or failure.
→ Next: [Cross-Cultural Management #8] examines a leader who didn’t try to unify cultures — but designed a process for cultures to learn from each other.