Spring,an American firm,recently acquired another company,Tazel Inc.,in Indonesia.The high-level managers at Tazel quit because they could not cope with the domineering and straightforward approach of their American counterparts.This illustrates how acquisitions may fail because
A)managers overestimate their ability to create value from an acquisition.
B)integration of operations between the two firms takes longer than forecasted.
C)there is a clash between the cultures of the acquired and the acquiring firm.
D)an acquiring firm overpays for the assets of an acquired firm.
E)inadequate pre-acquisition screening has been done.

Question

Quizplus · Accepted Answer

The scenario presented in the question shows a clash between the cultures of the acquired and the acquiring firm, leading to the failure of the acquisition. This aligns with the cultural integration issues that many companies face when acquiring firms from different countries or regions. Therefore, option C is the best choice. The other options may also contribute to the failure of an acquisition, but they do not explain the situation presented in the question.

Spring,an American Firm,recently Acquired Another Company,Tazel Inc