Spring,an American firm,recently acquired another company known as Tazel Inc.in Indonesia.The high-level managers at Tazel Inc.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 given scenario illustrates a clash between the cultures of the acquired and the acquiring firm, which is one of the primary reasons why acquisitions may fail. The domineering and straightforward approach of the American counterparts is not in line with the culture at Tazel Inc., leading to high-level managers quitting. The other options may also contribute to the failure of an acquisition, but in this case, the clash of cultures appears to be the most significant factor.

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