CRI听力: Business Leaders Shed Light on Overseas M&As at Boao

Recent Chinese purchases of major overseas assets, including Geely's purchase of Ford's Volvo unit, have been making a big splash in the global business world, and have raised questions about whether Chinese companies have the capasity to successfully operate foreign-based companies.

As we hear from Damin, a seminar at this year's Boao Forum dove head-on into the subject.

While most people think cultural differences are the main reason why overseas takeovers fail, experts say that is not the case.

Par Ostberg, senior vice president of Swedish commercial vehicles builder AB Volvo, admits that "culture shock" does exist, but it is "culture shock" in the business sense.

"When we are confronting difficulties during the integration period, we often tend to identify these difficulties as country-culture aspects, when they are in fact company-cultural aspects. We have done acquisition in our home country, two Swedish companies, which are much more difficult than what we have done elsewhere, because the two companies' cultures were so extremely different."

AB Volvo has more than 180 operations around the world.

Xiong Weiping, general manager of China's largest aluminum producer, Aluminum Corporation of China, acknowledged that differences between company cultures exist, but emphasized that these differences must be integrated in the end.

"Both the Oriental and Western style of company cultures have evolved over time and they survived for a reason. When our employees from different company culture backgrounds communicate with each other, they both get improvement. It is a process of mixing old cultures and fusing new ones. But as a company, I require all employees accept the same, unified company culture, corporate value, spirit, no matter if he is from an Oriental or Western background."

Aluminum Corporation of China has hired a large number of foreign employees at its newly-purchased assets abroad, many of whom occupy management positions.

Russell Scrimshaw, executive director of Australia's third-largest iron ore miner, Fortescue Metals Group, says patience, modesty and openness are needed to bridge these cultural differences.

"China likes to say a win-win, the only way you can have a win-win is that one culture embraces the other one and understands the differences but preserves its own identity, but we have to work together across cultural boundaries."

For CRI, this is Damin in Boao.