Conference Proceedings
International Mine Management 2012
Conference Proceedings
International Mine Management 2012
Cultural Challenges in Chinese/Australian Mining Mergers and Acquisitions - A CEO's Perspective
In recent years, Chinese companies have invested billions in Australian mineral exploration, development and processing. In 2008 - 2009 alone, the Foreign Investment Review Board approved $26.4 B of investment. Much of this investment has been by merger and acquisition (M&A) of Australian resources companies. This paper sets out to investigate how Australian CEOs perceive the cultural and institutional challenges in operating Australia mining companies recently acquired by Chinese interests. Hofstede's cultural dimensions and institutional theory from management science were used to develop a structured questionnaire, which was subsequently used to conduct telephone interview of the CEOs of six recently acquired mining companies. Analysis of the survey results indicated that, in all cases, few changes were made to the operational management of the Australian companies post-M&A. The three major benefits for Australian companies as a result of the M&A are the ability to; access long-term debt at lower cost; secure finance for growth plans in financially volatile times; and maintain existing management structures. Some perceived negatives involved longer and more convoluted decision-making as a result of Chinese state approval required for investment decisions. The study identified building Guanxi' and an aversion to losing face' as important cultural learnings for Australian CEOs. Maintaining effective communications is regarded as key for successful cultural integration.CITATION:Liang, W, Zhu, Y and Knights, P, 2012. Cultural challenges in Chinese/Australian mining mergers and acquisitions - A CEO's perspective, in Proceedings International Mine Management 2012, pp 251-260 (The Australasian Institute of Mining and Metallurgy: Melbourne).
Contributor(s):
W Liang, Y Zhu, P Knights
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- Published: 2012
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- Unique ID: P201211022