1. ArcelorMittal Merger
The cultural side of one
of the biggest deals in
the steel industry
Team Members:
Petr Boros
Luke Farrelly
Tanguy Bocquet
Emmanuel de Croy
Evelyne Hemstedt
Lubomila Jordanova
17th of March, 2014
ID419 Cross Cultural Management

2. Agenda
 The Team
 The Process
 The Video
 The Theory
 Managerial Lessons
 Conclusion
Team Process Video Theory Managerial
Lessons

3. Arcelor, Mittal & Cross Cultural
Consulting
Emmanuel de Croy,
Consultant from
Cross Cultural
Consulting
Lubomila
Jordanova,
Consultant from
Cross Cultural
Consulting
Unnikrishnan
Paramekkavil,
financial managers
of Mittal
Francois Simon,
Vice-President of
Arcelor
Abishek
Mukopadhyay,
Vice-President of
Mittal
Sylvie Thomas,
Strategic Manager
of Arcelor
Team Process Video Theory Managerial
Lessons

4. The Process
Interview with a PhD candidate examining the
cultural differences between France & India
Interviews with French students based in India
Interviews with Indian students based in France
Theory that covers the two countries and
differences between them
Team Process Video Theory Managerial
Lessons

5. The Video – Rationale for
Choice
• Merger discussions between two
steel producers, Arcelor (France)
& Mittal (India)
• Focus on scenes that expose
differences in cultural perceptions
in the 2 countries
• Reasons for choosing this
case
– Suprisingly little theory on
the Franco-Indian
relationship from a cultural
perspective
– France - 2nd strongest
economy of Europe, strong
culture
– India - emerging might in
the new economic realityTeam Process Video Theory Managerial
Lessons

6. Cultural Dimentions Considered in
Video
Individualism
vs
Collectivism
Relationship
Orientation
Uncertainty
Avoidance
Power
Distance
Time
Orientation
Punctuality
Cultural
Context
Team Process Video Theory Managerial
Lessons

7. VIDEO!
Team Process Video Theory Managerial
Lessons

8. Which cultural dimensions can you
identify?
Team Process Video Theory Managerial
Lessons

9. Seven cultural differences between France and
India
France India
Uncertainty avoidance
• Try to control the future
• Intolerant to unorthodox behaviour and
ideas
Uncertainty tolerance
• Tend to let things happen
• Relaxed attitude, practice counts more
than principles
Short-term oriented
• Rewards immediate results
• Respects traditional approaches
Long-term oriented
• Attaches more importance to the future
• Foster pragmatic values
Punctuality
• Being on time is crucial
• Strict respect of working and non-
working hours
Non-punctual
• Arrive when possible
• Time is continuous, no difference
between today and tomorrow
Femininity
• Stronger focus on relationships and
collaboration
Masculinity
• More competitive and performance
oriented
Team Process Video Theory Managerial
Lessons
Source: Geert Hofstede Cultural Dimensions (1991), Steelcase Culture Code, Solomon and Schell: Managing Across
Cultures (2009)

10. Seven cultural differences between France and
India
France India
Individualism
• Individuals are expected to take care
only of themselves and their immediate
families
Collectivism
• Individuals are very concerned with the
well-being of the larger group rather
than their own
Lower power distance
• Less hierarchical, decisions can be
taken at different levels
Higher power distance
• More hierarchical, everyone can
participate in the decision-making
process but the decision is eventually
taken at the highest level
Lower cultural context
• Tend to be direct when dealing with
others
Higher cultural context
• Tend to be more indirect and vague
Team Process Video Theory Managerial
Lessons
Source: Geert Hofstede Cultural Dimensions (1991), Steelcase Culture Code, Solomon and Schell: Managing Across
Cultures (2009)

11. What went wrong?
Team Process Video Theory Managerial
Lessons
Long-Term versus Short-Term
View Opposition
• Leads to disagreements (e.g.
agenda, shareholders)
• Both parties listened to the
each other’s opinion
Problem
 Better communication on
the goals (elaborate the
agenda of the company
together)
 Understand the other
party’s concern and show
you will really take it into
consideration
Solution

12. What went wrong?
Team Process Video Theory Managerial
Lessons
Uncertainty avoidance
• Different views on what to
do with aging factories
• Different incentives for
managers: bonuses vs
market share
Problem
 Be aware of topics that
are nationally sensitive
(unions, economic
situation)
 Better understand the
habits and fears of the
management and
employees
Solution

13. What went wrong?
Team Process Video Theory Managerial
Lessons
Cultural context
Although smooth meeting,
different perceptions about
the outcome of the meeting
subsequently led to diverging
views
Problem
 Align their vision (E.g.
Establish a common
summary of the
negotiation)
 Ensure a better follow-up
with pre-established
deadlines
Solution

14. General Learning Points for
Managers
Source: Marks & Mirvis ,1998; Hofstede, 1980; Forbes, 2013, Chakrabarti et al., 2009., Lane et al., 2005
Team Process Video Theory Managerial
Lessons
Awareness of the “Merger
Syndrome”
• 3 aspects, personal,
organisational & cultural
reactions not taken into account
in the beginning  “Hostile
Takeover”
Well-defined Vision of the
Transaction Context
• Mapping  Bridging 
Intergrating = smooth M&A
process
• Preparation neccessary for deal
of such size
“Cultural Distance”
Hypothesis
• success of the M&A deal
extensive effort in
understanding the CULTURE on
the other side of the table
Utilisation of Success
Potential
• Success rate of cross-border
M&A found to be higher than
for domestic M&A

15. Thank you!
“It is never too late to give up your prejudices”
―Henry David Thoreau

16. Questions?