Excelsior Manufacturing is a medium-sized firm located in the northeastern part of the United States. Excelsior has long been known as a high-quality, world-class producer of precision tools. Recently, however, this MNC has been slowly losing market share in Europe because many EU companies are turning to other European firms to save on taxes and transportation costs. Realizing that it needed a European partner if it hoped to recapture this lost ground, Excelsior began looking to buy a firm that could provide it with a strong foothold in this market. After a brief search, the MNC made contact with Quality Instrumentation, a Madrid-based firm that was founded five years ago and has been growing at 25 percent annually. Excelsior currently is discussing a buyout with Quality Instrumentation, and the Spanish firm appears to be interested in the arrangement as it will provide it with increased technology, a quality reputation, and more funding for European expansion.
Next week, owners of the two companies are scheduled to meet in Madrid to discuss purchase price and potential plans for integrating their overall operations. The biggest sticking point appears to be a concern for meshing the organizational cultures and the work values and habits of the two enterprises. Each is afraid that the other's way of doing business might impede overall progress and lead to wasted productivity and lost profit. To deal with this issue, the president of Excelsior has asked his management team to draft a plan that could serve as a guide in determining how both groups could coordinate their efforts.

On a personal level, the head of Excelsior believes that it will be important for the Spanish management team to understand that if the Spaniards sell the business, they must be prepared to let U.S. managers have final decisionmaking power on major issues, such as research and development efforts, expansion plans, and customer segmentation. At the same time, the Americans are concerned that their potential European partners will feel they are being told what to do and resist these efforts. "We're going to have to make them understand that we must work as a unified team," the president explained to his planning committee, "and create a culture that will support this idea. We may not know a lot about working with Spaniards, and they may not understand a great deal about how Americans do things, but I believe that we can resolve these differences if we put forth a good-faith effort."

Questions
1. What do you think some of the main organizational culture differences between the two companies would be?
2. Why might the cultural diversity in the Spanish firm not be as great as that in the U.S. firm, and what potential problems could this create?
3. What would you recommend be done to effectively merge the two organizational cultures and ensure they cooperate harmoniously? Offer some specific recommendations.