The relevance to international mergers of the ethical perspectives of participants

Abstract

Purpose

International mergers are becoming more widespread among medium‐sized companies that for decades have held a prime position in their home country market, but who now feel threatened that they may not be of a significant size to continue to be viable in the international marketplace. The purpose of this paper is to examine the merger of one Australian company and one of its former competitors in the international marketplace from the perspective of the congruence between their espoused ethical cultures in business prior to the merger.

Design/methodology/approach

A questionnaire comprising 46 questions was sent to the public relations manager of each organisation prior to the merger. These managers were asked to fill in the questionnaire and to provide a copy of their code of ethics.

Findings

The research found that organisations need to not only have a code of ethics, but also need to focus especially on the area of code augmentation to ensure that they communicate the ethos of their code to their employees. The examination of the content of the code and the artefacts in place to communicate the ethos of each company's code would enable one to compare for ethical congruence between the two companies. The examination of these ethical artefacts highlighted that the companies appeared to have been quite divergent in their commitment to business ethics when they entered the merger. If companies are to merge across country, and thus cultural boundaries, they need to examine the ethical standpoints of potential partners in order to alleviate any potential conflicts from an ethical, corporate culture perspective.

Originality/value

This paper provides useful information for those companies planning to merge across country, and thus cultural boundaries.

Citation

Wood, G. (2005), "The relevance to international mergers of the ethical perspectives of participants", Corporate Governance, Vol. 5 No. 5, pp. 39-50. https://doi.org/10.1108/14720700510630040