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Microsoft and Nokia ($7 Billion)

In April 2014, Microsoft completed its acquisition of Nokia's mobile phone division for $7.2 billion. The two companies first formed a strategic partnership in 2011 that resulted in all Nokia smartphones running on the Windows Phone operating system. Despite Nokia having made impressive Windows phones, it was not enough to be profitable. A year before the acquisition, Nokia was considering a move to Android and would, in theory, leave Windows with no OEM support. After all, it controlled more than 90 percent of the Windows Phone market. Also, Steve Ballmer, the CEO at that time, was looking for a way to enter the mobile phone industry to better compete with Apple and Google. Many have speculated that this was the main driver of the deal and was Microsoft's way of solidifying its ground in the mobile industry. However, acquiring Nokia didn't change the harsh reality that Windows phones have only a 3% market share. Very few people loved the phones, and Android phones held a 79% market share. A couple of years after this deal, Microsoft wrote off $7.6 billion and had to lay off approximately 25,000 employees. In 2016, Microsoft sold Nokia to HMD, for $350 Million.

Theoretical Background 4 5 Issue 1: Change management Management plays a vital role in the overall success in operations of an organisation. According to Shin, Sung, Choi, and Kim (2015), management directly affects organisational behaviour and the firm's financial capability. Moreover, failure to hire, acquire, or retain good managerial staff will lead to higher consequences from top to bottom of the organisational structure. One distinctive feature in a CBMA is that two or more cultures are brought in together (Brannen and Peterson, as cited in Kroon, Cornelissen, and Vaara, 2015). The decision to replace Ranbaxy Singhs' management with managerial staff from Daiichi underpins a lack of understanding from an employee perspective which may jeopardize the integration efforts of a CBMA (Kroon et al, 2015). This can be a direct display of Hofstede's power distance concept, in which India has scored relatively high (77). The culture of an Indian workplace, like Ranbaxy, the company's workforce is very dependent on their superior's direction (Hofstede Insights, 2019). In this regard, Kar and Kar (2017) insist that the sudden change to a Japanese manager can directly affect the local employees' performance, which in Ranbaxy's case, lead to further consequences such as misrepresenting clinical generic pharmaceutical information and selling of contaminated medicines to the foreign market (Appendix A). This is further taken by Cameron and Green (2005) who assert that failure to consider the change and impacts on an individual level, the success of managing a large-scale environment effectively is less likely to be seen. Kumar (as cited in Kar and Kar, 2017) reveals that the significant challenge was that Daiichi Sankyo was focused on changing Ranbaxy's top management, but it failed to change its workforce, causing the cultural distance within the CBMA. On the other hand, Japanese managers are more likely trained to be rational thinkers, which is likely to exemplify a more masculine quality concept, as they are shaped duly as a result of World War II (Kono, 2016). It is apparent that Japan is more likely having a culture where hierarchy matters, in which power distance is scored at an intermediate level (54) (Hofstede Insights, 2019). This reflects that the Japanese workforce are self-directed and does not solely depend on their superior's discretion. Furthermore, data from Hofstede Insights (2019) reveals that they perceive equality regardless of the corporate level, which, in turn, shows that many individuals are involved in the decision-making process. Considering both cultures, studies from Sitkin and Pablo, (2005); Waldman and Javidan, (2009); Gomes, Cohen, and Mellahi, (2011) as cited in Zhand, Ahammad, Tarba, Cooper, Glaister, and Wang (2015) demonstrate it is evident that a solid leadership style thatIssue 2: Knowledge transfer Consequently, another key issue that arose from the case is knowiedge transfer. The rapid decision of change in management or any part of the organisational structure can directly harm the timefra me for knowledge transfer from the acquiring rm to the target firm. Davenport and Prusak (as cited in Sarala, Cooper, and Tarba, 2016) present that knowledge transfer, although difficult, is one of the crucial factors of an organisation that directly influences the firm's competitive advantage and performance. There are ample studies that present knowledge transfer processes can contribute to a firm's overall effectiveness (Moon and Lee as cited in Bharadwaj, Chauha n, and Raman 2015); and is viewed as an enterprises' most valuable and strategic resource in attaining sustainable competitive advantage (Davenport and Prusak as cited in Bharadwaj, Chauha n, and Raman 2015). Both India (48) and Japan (46) score somewhat an intermediate level in terms of individualism (Hofstede Insights, 2019). The concern for group and company loyalty is very strong amongst the Japa nese (Kim, Ga rdere, Grace, Steinbaum, and Steinberg, 2017), who are relatively similar to Indians in this spectrum. 0n the contrary, like many Asian countries, the Japanese society displays a sense of being a collectivistic society as well such as giving value to the harmony of a group rather than the expression of an individual's sentiments (Hofstede Insights, 2019). According to Hofstede's comparison, India, on the other hand, displays its individualistic traits mainly as a result of the dominance of religion (Hofstede Insights, 2019). In difficult situatiOns such as decisiOn making, moral value-s which are deveIOped in early stages with influences from one's family, peers, and other networks prevail (Yadav, Kohli, and Tiwari, 2015). Moreover, the vast majority of India practice Hinduism and are taught to be individually responsible for their own lives. To divulge an effective knowledge transfer, a certain level of collaboration of both cultures must be present. Multinational corporations are ongoingly transforming into a worldwide network (North and Kumta, 2018) that embodies of a structured training program especially suited for cross border merger acquisition integration. Issue 3: Quality assurance Quality assurance is also an issue that is evident in the Ranbaxy case. The scope of quality assurance is, more often than not, taken for granted. Quality assurance covers compliance in accordance to the standards delivered by a legal entity considering the consumers, the management, and the environment (Harrison, 2017). Subsequently, the Indian workforce of Ranbaxy continued to perform as usual without any changes, which can illustrate uncertainty avoidance concept (Kar and Kar, 2017). In India, uncertainty avoidance is shown as relatively low (40), which meant that local employees of Ranbaxy are traditionally accepting mistakes. They are predictably patient in nature which exhibits the fact that such local employees are more likely to follow what is usually done and rarely step out of their 0n the other hand, Japan is one of the most who scored the highest in Hofstede's comparison uncertainty avoidance (92] (Hofstede Insights, 2019). This dimension illustrates that the Japanese are most likely to be calculated risk-takers. In a business environment, a decision would be made strategically based on all available detailed facts and figures, which displays a nature of maximum predictability {Hofstede Insights, 2019). Therefore, thorough analysis in consideration of all political, economic, and social factors is done for almost every rigid situation. Nanda (2016) puts forward the argument that this aspect reflects the condence of both management and consumers to meet the quality requirements set by the legal authorities. In order to execute effective quality management, a plan to test the quality of products and services must, therefore, be implemented. Transition missing Managerial Implications The researcher recommends the following methods that undermine the theoretical concepts of cross-border merger and acquisition integration: Change management: Before the selection of a management employee to be relocated, it is vital that this individual has proven leadership skills and adaptability to cultural differences, especially in handling local employees of the destination country. Series of interviews should be conducted by the tap-level management. This is followed by directed information sessions on the culture of the destination country to selected managers to be aware of the profile of the country and its people. In doing so, a better understanding of both cultures will be benecial to the CBMA holistically as the chosen supervisor will be able to develop a better management-employee relationship. Knowledge transfer: During the pre-acquisition phase, it is vital to include the collaboration of both countries involved. If management employees are located in different countries, Skype meetings or telephone conferences should be conducted in terms of realigning goals and outlining training plans for the workforce. This is followed by training sessions to ensure proper knowledge transfer and knowledge sharing if necessary, for identified gaps in processes. The method of training program consists of side-by-side training and ha nds-on activities. However, these sessions may vary depending on the industry. Once the employees have successfully completed and followed the training plan, they may now be deployed to production - where at this stage, the employee and management must be aligned with all values and processes. Quality assurance: In production, it is recommended to implement a scheduled internal audit done by a different department or management leader to evaluate existing processes and tests the quality of the products and services provided by the team. The internal auditor should, therefore, provide feedback and a report stating potential gaps