Management Culture - Identifying Absorption due to an Acquisition Case : Ford's Acquisition of Volvo

The accelerating globalisation has led to an increased number of acquisitions and mergers. This implies changes within the organisation and problems with the implementation process of the new organisation that is taken form. The integration of the companies involved makes it essential to identify and to be aware of the characteristics of different management cultures. Management culture is the way a company is managed influenced by the surrounding culture. Management culture is something that has often been developed since the origin and is permeating the company spirit. This dissertation focuses on the characteristics of American and Swedish management cultures. Ford acquired Volvo Cars in 1999 and in this study Ford is representing the American management culture whereas Volvo is representing the Swedish management culture. The two companies are considered to possess typical characteristics of the management cultures examined. The intention was to analyse how a company’s management culture is affected by an acquisition and if the possible effects are reflected outside the organisation. Examined theories were concentrated into the Management culture model containing five dimensions; Relations, Orientation, Decision-making, Motivation and Loyalty. Hypotheses were developed from the model and the perceptions of Volvo’s suppliers were evaluated through a survey. The results show conformity with the Management culture model, which indicates that Volvo has absorbed distinctive elements of Ford’s management culture. This might indicate that acquisitions between a bigger American company and a smaller Swedish company would imply consequences in the management culture