CULTURAL DUE DILIGENCE

Japanese companies spend a considerable amount of time and effort on pre-M&A analysis when it comes to acquisitions. Yet they apply little or no cultural due diligence to the challenges of post-acquisition cross-cultural management. This is the highly surprising finding of a survey of nearly 100 Japanese companies across a wide spectrum of industries and business sectors conducted in 2019 by the Ministry of Economy, Trade and Industry, which calculates that that cultural differences are an important causal factor in no less than 85% of Japanese cross-border failures. The conclusion must be that a majority of Japanese companies have no specific approach to assessing, understanding and navigating culture in an M&A deal.

Glisby & Associates have applied the results of their own surveys of their Japanese and European clients in the M&A context to develop a methodological framework for cultural due diligence. Our technique can enable both European and Japanese companies seeking more positive outcomes to deal more effectively with the cultural dynamics in Japanese cross-border M&As.