6 Why cultural differences in nonverbal language and workplace interactions create problems among employees experiencing mergers and acquisitions

Mergers or acquisitions that involve a clash of culture are more likely to fail (Schoenberg, 2006), and cultural clashes can be understood by considering factors that increase interpersonal conflict or misunderstandings among employees. Culture can be defined in terms of the objects, values, and behaviours that are considered normal in a particular country, industry, or organization. Defining culture in organizational psychology requires an understanding of practices (e.g. business procedures), language (e.g. nonverbal behaviour), artefacts (e.g. office décor), branding (e.g. imagery in advertisements), symbolism (e.g. beliefs or values), and so on. Nonverbal language is one of the most important determinants of how well employees interact and communicate with each other, yet it is a topic that is almost non-existent within previous literature about mergers and acquisitions. Interpersonal communication between employees involves not just what they say to each other, but how they say it, e.g. eye contact, facial expressions, voice pitch, clothing style, walking style, posture, the wording of emails, and more. Such nonverbal behaviour is said to be one of the most important elements of human communication (DePaulo, 1992). Cultural similarity can shape how employees perceive each other and whether they interpret certain behaviour as normal versus abnormal, polite versus or rude, typical versus bullying. Many studies have found that nonverbal aspects of interpersonal communication predict good-quality workplace relations, perceptions among employees, positive attitudes towards employees, their chances of promotion, their sales performance, and other workplace outcomes (see Kamau, 2009, for a review). Cultural norms are important because culture shapes the “rules” or “dialects” that are considered normal or expected in nonverbal communication (Ekman & Davidson, 1994; Elfenbein, Beaupré, Lévesque, & Hess, 2007; Matsumoto et al., 2005). These norms are often familiar to people inside a culture but, to outsiders, the norms can be unfamiliar (Richardson & McKenna, 2006), creating the potential for problems such as conflict or misunderstandings among employees after mergers or acquisitions that involve organizations from different cultures in terms of nation or sector. It is also plausible that cultural clashes can occur even among mergers or acquisitions within the same country or sector because different organizations can have different cultural norms. Mergers or acquisitions might thus be seen by employees as events that pose a threat to their organization’s cultural values (e.g. the way that managers and employees interact), and this might prompt employees to resist a merger or acquisition because of the threat it poses to their workplace culture. This chapter will discuss the relevance of cultural norms about nonverbal language to mergers and acquisitions, and the possible impact of employees misunderstanding messages or attitudes conveyed by other employees, increasing the chances of workplace hostility, hyper-vigilance, or paranoia and other negative outcomes. This chapter will also discuss the potential impact of cultural differences in nonverbal language on the likelihood of employees experiencing stress, depression, and burnout after a merger or acquisition. We will discuss laboratory research from neuroscience showing that when people misunderstand or make errors in nonverbal communication, there is evidence that this activates distress signals within the brain (Kim, Liss, Rao, Singer, & Compton, 2012; Klucharev, Hytonen, Rijpkema, Smidts, & Fernandez, 2009). Cultural differences could be one of the reasons why employees going through a merger or acquisition are at higher risk of depression (Cartwright & Cooper, 1993; Joslin et al., 2010; Cartwright et al., 2007; Väänänen et al., 2011) and emotional exhaustion (Väänänen et al., 2004). This chapter will then examine further directions for research in this field, and ways that organizations can prevent problems arising from cultural differences among employees by helping them develop intercultural competence. It is important to remember that mergers or acquisitions across cultures have many advantages, therefore, this chapter encourages organizations to learn about the potential pitfalls then take steps to prevent cultural differences from having a negative impact on employees. Organizations should be aware of the potential pitfalls but they should not avoid entering into cross-cultural mergers or acquisitions.

How cultural differences among employees hinder mergers and acquisitions

Studies about organizations that have been through a cross-cultural merger or acquisition show that many experience cultural differences in how employees interact or behave and there are consequences for conflict, trust, and integration among employees. Ailon-Souday and Kunda’s (2003) ethnographic study found that, in a case of an American organization acquired by an Israeli organization, there were cultural differences among employees in their formal or informal behaviour at work, and in their deference towards managers or people in authority. The study suggested that Israeli workers had a more informal working culture than American employees. The cultural differences were exacerbated by language differences, and the employees categorising each other as Americans or Israelis (Ailon-Souday and Kunda, 2003). It is possible that the Israeli employees might have faced problems such as finding that their informal behaviour within the workplace was misunderstood or negatively evaluated by American employees who were more accustomed to formal workplace norms. Likewise, the American employees might have experienced negative outcomes from Israeli employees for their formality, such as being misunderstood as unfriendly or hostile. Another study by Frederick and Rodriguez (1994) found that, after an acquisition of a German company by a Spanish company, employees in the two companies had cultural differences in their working practices. The study found that German workers had rigid, procedural, detail-focused approaches to working whereas Spanish workers had more relaxed, flexible, and accommodating working practices. The study suggested that the cultural differences eventually fuelled mistrust among the employees, particularly towards people in management. It is plausible that mistrust arises from managers and employees misinterpreting each other because of cultural differences. Brannen and Salk’s (2000) study found that, after a merger between a German and a Japanese organization, conflict arose because of cultural differences in the two organization’s norms about decision-making, ideas about work, how employees perceived their job roles, language, and market orientation. For example, the study found that Japanese employees tended to work late, while German employees tended to leave work at 5 pm. It is possible that employees do misinterpret each other’s behaviour – for example, the Japanese workers might have thought of the German workers as uncommitted or not hardworking enough because they did not work late, with potential negative consequences for job appraisals and promotions. Brannen and Salk’s study found that German employees tended to feel more empowered to make decisions or solve problems independently, suggesting that this might create conflict between them and Japanese managers who might negatively evaluate independent decision-making as insubordination or disrespect.

Another example of how cultural differences can have an impact on employees after a merger or acquisition is a study by Styhre et al. (2006), who conducted qualitative interviews of some employees at AstraZeneca (the result of a merger between the Swedish company Astra with the British company Zeneca), and Volvo (a Swedish company) acquired by Ford (a US company). The study suggested that US and Swedish cultures have different management cultures, for example, an employee from Volvo said, “The American culture and our culture – it is actually a culture shock. They want to control from the top what we do, and they think that if you can control something, that’s great. We never think in those terms at Volvo” (Styhre et al., 2006, p. 1300). Another example suggesting that Swedish employees perceived cultural differences in the management style of US-based Ford company, suggesting that it is a top-down, hierarchical management style, was a designer at Volvo who said:

It is plausible that cross-cultural mergers or acquisitions with companies consisting of the sort of hierarchical management style described in Styhre et al. could make workers from cultures with less power distance between managers and non-managers feel bullied or micro-managed, possibly escalating into filing a grievance, quitting, or taking industrial action. However, it is important to note that the top-down culture described by employees as the culture of the US-based Ford company (Styhre et al., 2006) may be a culture unique to Ford, rather than all US companies. A different study of a US company within the automobile sector found that the US company in that case had a more informal, less top-down management approach, showing that cultural differences in mergers or acquisitions arise not just from national differences, but also from differences between organizations (Badrtalei & Bates, 2007).

Badrtalei and Bates (2007) discussed the 1998 merger between the German company Daimler-Benz and the US company Chrysler. The two companies are said by Badrtalei & Bates to have had different cultures in terms of workplace formality and independence in decision-making, with Daimler-Benz having a formal culture of using titles, formal names, and wearing suits with ties, in contrast to Chrysler’s casual interactions, clothing, and a less-hierarchical approach to decision-making. A related point is that, whereas all Daimler-Benz employees were accustomed to flying first class, only some employees at Chrysler were allowed to fly first class, and this caused a lot of conflict that Badrtalei & Bates say took six month to resolve. Chrysler’s executives were paid substantially more in basic salaries and bonuses than Daimler-Benz executives, but decision-making in the latter company was more formal and hierarchical. Another cultural difference suggested by Badrtalei & Bates was that, whereas German culture made it normal for Daimler-Benz employees to drink wine with lunch, alcohol was banned in Chrysler. Therefore, the cultural differences in the case of Daimler-Benz and Chrysler arose from a mix of organizational and national factors. The merged DaimlerChrysler was controversial among shareholders who argued that it was a merger of equals on paper, but a takeover of Chrysler by Daimler in practice; they filed a class-action lawsuit and won a settlement of $300 million in 2003 (English, 2003). The merger led to many job cuts, losses, and management changeovers that Badrtalei & Bates blame, in part, on cultural differences. DaimlerChrysler eventually sold off Chrysler in 2007 but, without empirical data about the impact of cultural differences on the merger’s failure, we cannot conclusively say that culture was the only or biggest contributor to the merger’s ending. There are other factors to consider, such as market variables within the automobile industry, competition, and business decisions after the DaimlerChrysler merger that may have led the merger to fail. However, it is plausible that cultural differences make executives, shareholders, and employees more pessimistic about other problems with an organization, hastening the ending of the merger or acquisition.

Cultural differences in how employees dress and behave have also been noted in other studies. Buono et al. (1985) suggested that cultural differences become salient after mergers or acquisitions in ways that are both intangible (e.g. norms and values) and tangible (e.g. objects, as the layout of offices, décor, dress code, etiquette, and so on). McEntire and Bentley’s (1996) study of a merger observed cultural differences in terms of the structure of offices, décor, employees’ style of clothing and grooming, length of men’s hair, beards, and clothing fabric. The study found that the way employees spoke was a source of conflict and derogatory behaviour among employees of the two organizations involved in the merger.

Despite such fascinating insights into the presence of cultural differences in the way that employees from different organizations behave or interact, there is very little in-depth empirical research about cultural differences in nonverbal language within cases of mergers or acquisitions across or within countries. The studies that we review hint at the fact that, in workplace interactions, what is important is not just what an employee says but also how they say it. When two people are speaking to each other, their eye contact, tone of voice, posture, hand gestures, facial expressions, and other nonverbal language cues or signals matter (DePaulo, 1992). Countries, regions, industries, and organizations can differ in what is considered normal or good nonverbal language. Culture can thus determine whether an employee’s behaviour is perceived and evaluated positively (e.g. being liked or promoted) or whether the same behaviour, from the lens of a different culture, leads the employee to be perceived negatively or penalised (e.g. being seen as incompetent or having their job at risk). We will now explore the concept of nonverbal language in more detail, helping you understand why it is an important yet neglected topic within the psychology of mergers and acquisitions.

Why do cultural differences in nonverbal language matter in mergers or acquisitions?

It is plausible that employees use nonverbal language to help them establish successful working relationships with new managers or colleagues after a merger or acquisition. Research shows that people use nonverbal language (e.g. eye contact, posture, clothing, accent) to help them come across as competent, likeable, respectable, committed, and so on – something called impression management and is defined as the manipulation of one’s nonverbal behaviour to achieve a mental, material or social goal (Leary & Kowalski, 1990). Studies show that employees who use impression management strategies have higher chances of positive outcomes such as having their work colleagues or managers rate them as likeable, competent, or promotable (Bolino & Turnley, 2003; Leary & Kowalski, 1990; Rosenfeld, Giacalone, & Riordan, 1995; see Kamau, 2009, for a review). Being able to convey a positive impression through nonverbal language can therefore help employees get along with each other, like each other and work well on projects after mergers or acquisitions that combine teams from different organizations or port managers or executive teams across organizations. A merger or acquisition that combines organizations with different cultural practices can make it difficult for employees to be understood by other employees, managers, or clients. This, in turn, can hinder the goals that employees have within their work, such as being persuasive, being seen as competent, being trusted, or having one’s leadership role respected. There are many studies about how employees use nonverbal behaviour to achieve goals such as closing a sale (Leigh & Summers, 2002), gaining promotion (Westphal & Stern, 2007), influencing their manager’s or supervisors’ ratings of them (Vilela, González, Ferrín, & del Río Araújo, 2007), and gaining positive performance evaluations (Gordon, 1996; Bolino & Turnley, 2003). Impression management is thus important because nonverbal communication contributes to how people perceive an employee’s competence, power, likeability, and reciprocal liking (see Kamau, 2009, for a review). An impression management strategy is a complex cluster of different verbal and nonverbal signals to other people (e.g. certain facial expressions, clothing styles, attitudes) and there are many possible impression management strategies that employees in many organizations use, each with a variety of possible goals and outcomes (Rosenfeld et al., 1995). A merger or acquisition that introduces cultural differences can thus disrupt the outcomes that employees achieve from speaking with colleagues, managers or clients, yet there is very little research about this. Remember that culture can be defined in many ways, e.g. industry, region, social class, ethnicity, nation, political or economic climate, and so on. Therefore, what matters is whether the cultural differences hinder employees’ optimal ability to speak to each other, influence each other, lead or follow each other, and work with each other. Here are some possible examples:

We can therefore see why nonverbal language is an important aspect of employees’ interactions with other employees in any organizational context, including organizations that have undergone a merger or acquisition, and that includes employees of any level (e.g. managers, senior executives). It is here that culture enters into the equation because the suitability of certain types of nonverbal communication, particularly those that form part of an impression management strategy, depends on social or organizational cultural norms (see Kamau, 2009, for a review). For instance, even just focusing on facial expressions alone, experiments suggest that people from different cultures have different “dialects” about how to animate one’s face when expressing certain types of emotions (Elfenbein et al., 2007). In Shihoko’s case within the example in Table 6.1, maintaining a neutral facial expression and not laughing loudly is normal and expected in Organization A, but seen as unusual in Organization B. Cultural norms can determine what employees think other employees’ facial expressions mean because of variations in how emotions such as fear, anger, happiness, sadness, disgust, and surprise are expressed (Ekman and Friesen’s, 1971; Russell, 1991). There is also ample evidence that different cultures vary in their norms about level of “nonverbal expressiveness” that is expected during social interactions or the extent to which someone conveys emotion nonverbally (Friedman, Prince, Riggio, & DiMatteo, 1980; Richmond, McCroskey, & Johnson, 2003). Nonverbal expressiveness involves animating one’s facial expressions, varying one’s vocal pitch, using a lot of eye contact while talking, displaying frequent positive cues such as smiling or laughing, and avoiding the display of negative cues such as frowning. The amount of nonverbal expressiveness that is seen as “normal” or “good” during social interactions varies from culture to culture (DePaulo, 1992; Matsumoto et al., 2005). Evidence shows that people unfamiliar with a culture are often unaware or confused about what sorts of nonverbal signals produce positive or negative reactions, including misinterpreting nonverbally expressive behaviour as rude, uncouth, or obnoxious (Spong & Kamau, 2012). Remember that cultural differences exist not just between countries but also within countries, such as comparing different sectors (Drory & Zaidman, 2007). Therefore, defining a merger or acquisition as a cross-cultural merger or acquisition requires an understanding of all relevant cultural norms.

Let us revisit the concept of impression management strategies and recall that employees use nonverbal language in order to achieve certain workplace goals. Research shows that some impression management strategies or clusters of nonverbal behaviour can backfire in some cultures and in some types of organizations, yet lead to positive results in other cultural contexts (see Kamau, 2009, for a review). This section will discuss way in which cross-cultural mergers or acquisitions can inhibit employees’ success at meeting goals such as being liked, promoted, seen as competent workers, and respected by other employees. For instance, consider the goal that many employees have of being liked at work, being seen as a high performer, and getting promoted. Evidence shows that ingratiation is an impression management strategy used by employees in many workplaces to achieve these goals (Gordon, 1996). Examples of ingratiating behaviour are being agreeable, conforming to others’ opinions or requests, doing favours outside one’s job description, and flattering them. Many studies show that ingratiation does produce positive results for employees in some cultures, but negative results in others (Kamau, 2009). In terms of positive results, a meta-analysis by Gordon (1996) concluded that employees who ingratiate are, on average, better liked by supervisors or managers, and their performance is evaluated more positively (see also a study by Wayne & Liden, 1995). Other evidence shows that employees who engage in ingratiation are more likely to be promoted. Westphal and Stern (2007) conducted a survey of CEOs and managers from Forbes 500 companies and found that the managers’ and CEOs’ chances of being recommended for board appointments were connected with their display of ingratiatory behaviours such as doing favours, flattering, or agreeing with others. On the contrary, other studies have shown that Northern European workers view people who engage in ingratiation negatively. Peltokorpi (2006) interviewed 30 Danish, Norwegian, Swedish, and Finnish expatriates who were working as managers in Japan. The managers reported feeling shocked that prestige in Japan is associated with age or job rank in the workplace. The Northern European managers said they were dismayed when junior Japanese employees behaved passively or deferentially, and when they kept silent in meetings because of cultural norms discouraging junior employees from presenting their ideas directly to their seniors. In short, in some cultures, ingratiation by employees is expected and it has positive effects (e.g. the USA, Far East), but in other cultures, ingratiation is not expected and it can be counterproductive. A cross-cultural merger or acquisition can thus leave employees who engage in ingratiation unrewarded or even punished for behaviour that is expected of them in their home culture. The cultural differences can leave an employee with unmet goals of being liked, seen as a high-performer, or promoted.

As well as wanting to be liked by colleagues, manager, followers, and clients, another goal that many employees often have is to be respected. Self-promotion is an impression management strategy in which an employee meets the goal of being respected by making other people aware of their individual accomplishments, competencies, and capabilities verbally or nonverbally (Rosenfeld et al., 1995). The success of such behaviour depends on whether the surrounding culture approves or disapproves of people who engage in self-promotion. In collectivistic cultures, there is a strong emphasis on collective accomplishments (Triandis & Gelfand, 1998), therefore some studies suggest that self-promotion can produce negative outcomes in places like China (Kurman, 2001), perhaps because acting as if one is better than or very different from other people is frowned upon. On the other hand, in individualistic cultures such as France, where self-promotion and celebrating individual achievements are expected, employees who act the opposite, such as acting defeated or self-critical as part of an impression management strategy called “supplication,” can experience negative outcomes (Chambon, 2005). Another example of a goal that some employees try to meet is appearing powerful, dominant, or having “downward influence” on other employees (Bolino & Turnley, 2003; Rosenfeld et al., 1995). Some employees use intimidating nonverbal behaviours such as seeming aggressive, speaking louder than normal, extending eye contact, narrowing one’s eye gaze, expanding one’s body in a poise that exaggerates one’s physical size (e.g. sitting with extended arms or legs), using a tense voice, and showing negative facial expressions such as sneering or frowning. This is in their attempt to elicit fearful or submissive responses from other employees. Whereas research shows that intimidating nonverbal strategies have positive outcomes in some cultural contexts, e.g. the USA (see Bolino & Turnley, 2003), such behaviour can backfire in culture where honour, dignity, and saving others’ “face” or preventing others’ embarrassment is expected during social interactions (e.g. China, see Chang & Holt, 1994).

These examples show that nonverbal behaviour that reaps workplace rewards for employees in one culture can, in a different culture, reap negative outcomes. A cross-cultural merger or acquisition that introduces employees to an unfamiliar cultural context, including requiring them to interact through email, Skype, and phone, could result in employees experiencing frequent misunderstandings. Cognitive neuroscience research suggests that misunderstanding nonverbal language elicits distress signals within the brain, therefore organizations need to be aware of the possible impact of cross-cultural mergers or acquisitions on employees’ mental health.

Functional magnetic resonance imaging (fMRI) studies show that when people make errors in nonverbal language that involve interpreting faces differently from how other people interpret them, an area of their brain called the rostral cingulate region becomes activated (Klucharev et al., 2009). A similar study by Kim et al. (2012) used an electroencephalogram (EEG) rather than fMRI because EEG can be more precise in monitoring reactions to errors. Kim et al. found that such errors elicited signals called feedback-related negativity brainwave potential. These are brainwave signals similar to the signals elicited when people experience negative reinforcement (that is, a punishment or the lack of an expected reward). These brain signals are associated with the cingulate cortex, supporting Klucharev et al. and other evidence suggesting that the cingulate cortex is concerned with error-monitoring and responses to many types of punishment or negative reinforcement (e.g. Botvinik et al., 1999). In other words, when people make mistakes in nonverbal language, the effect on their brains is akin to getting punished or not receiving an anticipated reward. It also appears that humans have an area of their brain (the cingulate cortex) that is, at least in part, responsible for interpreting some types of nonverbal language, demonstrating the importance of nonverbal communication within human functioning. For instance, evidence suggests that the dorsal anterior cingulate cortex region of the brain is activated among people who are looking at faces expressing anger, disgust, or disapproval, compared to people looking at neutral faces (Burklund et al., 2007). The anterior cingulate cortex is associated with reactions to social rejection and it can trigger other areas of the brain that signal distress (Eisenberg, Lieberman, & Williams, 2003). The experiment by Eisenberg et al. (2003) monitored participants’ fMRI activity while they experienced social rejection and exclusion and found that this activated the anterior cingulate cortex and the right ventral prefrontal cortex, a region of the brain concerned with regulating distress after pain that is activated to help people manage distress. Other studies using a method called facial electromyography (EMG) suggest that seeing negative nonverbal stimuli produces negative effects even if the stimuli are perceived subconsciously (Dimberg, Thunberg, & Elmehed, 2000).

In short, evidence from cognitive neuroscience suggests that making mistakes or receiving negative signals in some types of nonverbal language elicits punishment responses within the brain and, in some circumstances, distress. This raises the question of what this means for employees experiencing cross-cultural differences in nonverbal language during or after a merger or acquisition, in terms of distress and other health outcomes. There is no known cognitive neuroscience evidence about employees experiencing a cross-culture merger or acquisition, but there is evidence that cultural changes after a merger or acquisition contribute towards employees’ emotional exhaustion (Väänänen et al., 2004). Research also shows that employees going through a merger or an acquisition are highly vulnerable to depression (Cartwright & Cooper, 1993; Joslin et al., 2010; Cartwright et al., 2007). This can lead employees experiencing a merger or acquisition to engage in maladaptive coping strategies such as excessive consumption of nicotine, alcohol, and food (Cartwright & Cooper, 1993). In the long run, research should examine whether chronic stress from a merger or acquisition raises the risk of negative health outcomes such as cancer, liver disease, and obesity-related diseases. Due to a lack of evidence within the literature, we do not know how much distress employees experience because of cross-cultural differences in nonverbal language, much less whether this causes mental health problems, or whether employees have a higher risk of mental health problems after a cross-cultural merger or acquisition compared to a merger or acquisition within a similar culture. What evidence there is of how people respond to cultural differences suggests that it puts them at risk of mental and physical health problems. Evidence shows that there is a higher prevalence of heart disease among people living in a culture different from their own (Ullman et al., 2011), and there is also a higher prevalence of chronic stress (Segerstrom & Miller, 2004), psychiatric disorders (Patel, 2011), and sickness-related absence from work (Lei, Liang, & Krieger, 2004). During a merger or an acquisition, employees have a significantly higher risk of psychiatric events and onset of depression (Väänänen et al., 2011), therefore, future research is needed to clarify whether cultural differences among employees precipitate mental and physical health problems.

Directions for future research

Without empirical evidence we can only say that culture is only one of many contributing factors to mental or physical health problems among employees because other elements of mergers and acquisitions can precipitate ill health. In terms of culture, the neuroscience and mental/physical health evidence leads us to theorise that mergers and acquisitions involving organizations from different cultures (e.g. different countries, organizations or industries) expose employees to culture-related errors and misunderstandings that elicit negative brain-based outcomes among employees, and these in turn raise their risk of distress. We theorise that cultural differences worsen problems such as intergroup processes highlighting attitudes of “us versus them” (see Chapter 5). Cultural differences could also reduce employees’ sense of self-efficacy at work because of misunderstandings that reduce their feelings of exerting enough influence, power, or control over what other employees think of them. Cultural differences can frustrate employees’ accomplishment of workplace goals such as being seen as competent, a good leader, productive, and likeable by coworkers, managers, and followers, therefore cross-cultural mergers or acquisitions might have an impact on employees’ mental health because of moderating factors such as having a worse chance of getting promoted or getting a positive appraisal. Cross-cultural mergers or acquisitions might also reduce employees’ job satisfaction by presenting misunderstandings that reduce the enjoyment and fulfilment that employees get from their workplace interactions. Future research should thus gather empirical evidence about the effects of cross-cultural differences on the health and work of employees in organizations that have undergone a merger or acquisition. For now, organizations need to pre-empt the potential problems by helping their employees learn about the cultural norms, values, and behaviours of employees in other cultures.

Preventing cultural problems in mergers and acquisitions through intercultural competence

It is important to remember that cross-cultural mergers and acquisitions have many advantages, and therefore this chapter should not discourage organizations from engaging in them. The possibility that employees will encounter cultural differences in nonverbal language and other aspects of workplace interactions with potential negative outcomes could be overcome by organizations helping employees learn about the culture of their partner organization, including making them aware of unfamiliar cultural norms about nonverbal language. Organizations often neglect the potential difficulties that could arise from a merger or acquisition and tend to focus on the benefits rather than the downsides (Oancea & Kamau, 2015; Weber & Camerer, 2003). Organizations often do not realise that cultural differences are an important cause of failed mergers or acquisitions (Weber & Camerer, 2003; Vaara, 2000, 2002). Therefore, this chapter helps organizations (and people working with them) to become aware of the potential negative outcomes of cross-cultural mergers or acquisitions for employees’ interactions so that they can do something to prevent the negative outcomes.

The concept of “intercultural competence,” (Bartel-Radic, 2006) or intercultural communication competence (Bush, Rose, Gilbert, & Ingram, 2001), refers to the ability of a person to be aware of other people’s cultural values, norms, and practices. Organizations that help employees develop intercultural competence before a merger or acquisition could help them better understand their new colleagues and adapt their behaviour in a way that is sympathetic to cultural differences. It is plausible that a merger or acquisition can fail not because employees lack the job-relevant competencies, but because of the dynamics of the intercultural experience (Clarke & Hammer, 1995). Employees can develop intercultural competence themselves, but this is less likely among employees with certain personality traits (e.g. low empathy, low emotional stability), a low desire to learn (Martin & Griffiths, 2014; Yoo, Matsumoto, & LeRoux, 2006), and non-critical self-reflection (Liddicoat, 2017). Employees also need enough time if they are expected to develop intercultural competence independently (Hofstede, 1991) because the more employees interact with the unfamiliar culture, the better their intercultural competence (Borghetti, Beaven, & Pugliese, 2015). However, time for employees to learn through experience is a luxury that organizations might not necessarily feel they have after a merger or acquisition. Shareholders and executives might look at initial dips in an organization’s performance as a sign that the merger or acquisition was a bad idea, and push for the organization to take drastic action to address profit losses, such as cutting jobs or changing the management. Of course, if the dips in profit were caused by factors arising from cultural differences, time could reverse dips by helping employees develop intercultural competence. However, the point is that organizations might not realise that cultural differences are the explanation for disappointing staff or profit outcomes after a merger or acquisition, therefore, rather than leaving employees to develop intercultural competence independently, it would be more effective for organizations to actively help them. Employees in a merger or acquisition often fear that their cultural norms or values will be replaced (Styhre et al., 2006), therefore organizations should assure employees that the culture after a merger or acquisition will be a synthesis of the two cultures rather than an outright replacement (Oancea & Neundlinger, 2017). Through training or other types of interventions, organizations should help employees develop intercultural competence by learning about the culture of the merging or acquiring/acquired organization, understanding important cultural differences, and accepting that working effectively with other employees will require empathy towards ways of behaving, interacting, or making decisions that are culturally different but not bad or lacking in validity. The process of intercultural learning is essentially a bidirectional process where each person needs to be mindful of their own culture and the culture of other people (Liddicoat, 2017). Through training or other interventions, organizations can help employees develop intercultural competence that will help them compromise or adapt during workplace interactions, processes, and procedures in a way that accommodates the working habits of the different cultures involved in the merger or acquisition.

Conclusions

Culture is defined not just in terms of a country, but also in terms of what is normal within a certain industry or organization. Cross-cultural mergers or acquisitions may involve cultural differences between organizations that increase the chances of negative or unfulfilling interactions among employees. This chapter reviewed research showing that mergers or acquisitions can be marred by conflict, mistrust, or misunderstandings among employees caused by cultural differences in how they behave, interact, or work. This chapter then focused on nonverbal language as a source of cultural differences because it is a neglected, yet important, determinant of employees’ interactions with each other, and because culture can determine the meaning or impact of some types of nonverbal language. Cultural differences can make employees suffer unmet workplace goals, interpersonal conflict, and misunderstandings. We discussed literature from neuroscience and other fields supporting the view that problems with nonverbal language can be distressing, and that being in an unfamiliar culture can raise the risk of physical and mental health problems. This chapter then discussed further directions for research in this field, calling for studies into job-related outcomes (e.g. employees’ sense of self efficacy at work, promotion) comparing cross-cultural mergers or acquisitions with those that involve organizations with similar cultures. Finally, this chapter discussed how organizations can help employees develop intercultural competence as a way of preventing the potential negative outcomes of cross-cultural mergers or acquisitions. Organizations that join together across different cultures face many advantages, including giving employees the chance to learn about different but more effective or more ethical working practices, and giving the organization a chance to carve a niche within a new consumer market. This chapter should not discourage organizations from engaging in deals with countries, regions, industries, or organizations with different cultural norms. Knowing about the potential negative outcomes of cultural differences can help organizations take preventative steps such as offering employees training that improves their intercultural competence, thus increasing the chances of a successful merger or acquisition. One of the ways that the culture of an organization can be improved is through good leadership, which Chapter 7 will discuss.