Kraft-Cadbury Cross-Cultural Merge Case study

Nowadays, there are plenty multinational corporations like DaimlerChrysle r AG formed

by the cross -cultural merger or acquisitio n. Not all of them strictly belong to the same industry ,

nor end up the same way as DaimlerChrysle r did.

A result of previous acquisitions named Kraft Food with the origin from United State s has

become known as the world’s second -largest food conglomerate. In 2009, addressed a bid for a

British national chocolate company named Cadbury. Cadbury ’s headquarters first raised a red flag

and resisted the Kraft Food ’s offer .

Cadbury ’s co nsidered as a national heritage reacted wi th

worries that merging with Kraft would underestimate the whole company and sovereign British

economy. Someone might think , for two nations paradoxically sharing a common language might

be easier, but the influence of their cultural differences ma y shuffle a deck of cards. On the other

hand, Cadbury ’s shar e the same business growth through mergers as Kraft ’s does.

After the improved offer in 2010, Cadbury accepted Kraft Foods to form an acquisition . It

launched impulsive protests from British shareho lders over the mergers fees charged by banks.

This situation totally does not match the Rossi’s statement : „We find that the volume of mergers

and acquisitions’ activity is significantly larger in countries with better accounting standards and

stronger shareholder protection ”. (Rossi, 2003)

Kraft merger with Cadbury faced various cultural differences including different business

perspectives, particular sense of humor, “straight to the point way of communication ” from the US

side encountering unpleasantly typical British reticence.

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But t he main conflict was strained after

Kraft ’s prom ise to keep Ca dbury’s Somerdale factory near Bristol open fell down like a house of

cards. It has been closed for not being feasible to keep it open. Kraft ’s refused to apologiz e even

though they had been forced into a public apology . The professional relationship within this merger

has started to corrode.

During October 2010 , some of the business plans started to have real contours for Kraft Foods .

They announced that they are planning to close some of the factories with the loss of approximately

other 400 jobs. Cadbury had almost no word in this decision -making. The workplace environment

had been disrupted as per different time zones = different work shifts, Kraft’s US prolonged

working hours typical more for USA than UK, and not clearly communicated common business

approaches which Cadbury has seen as “some hidden plans counting just with the Kraft’s maternal

company. ”

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Employees become concerned se eing the general uncertain and tense communication

between thes e two companies , and also by the fact that a takeover by Kraft may move next 30 000

jobs at risk . The concerns maximized the sooner claim that chiefs like Roger Carr, Todd Stitzer

and Andrew Bonfield announced their resignations one after other . All of them had worked at the

company for approximately 25 years.

The misunderstanding in communication and companies ’ own business preferences caused

that in 2011, Kraft Foods and Cadbury had announced they would be splitting into two companies

beginning in 2012. The conf ectionery business of Kraft became Mondelez International, of which

Cadbury remains a subsidiary.

Fortunately, this merger had no such big monopoly or competition issues as Daimler -Benz

and Chrysler had. However, in regards to the international merging, M iroshinik (2002) pointed out

that „the first major contributor to problems and failures of business abroad are cultural

differences. Strategies and structures that are appropriate in one cultural setting may lead to

failure in another. ”

Analyzing the mentioned two companies’ websites, Kraft’s one seems to dedicate a little

bit more space in regards to cultural diversity than Cadbury’s , but still quite marginally. There is

an ongoing campaign with the cooperati on of Oprah Winfrey. T his image can be considered as a

positive approach towards supporting a race equality awareness .

They further state diversity and inclusion in the workplace by having employees from more

than 40 countries. Also , they mention they are looking for “Diverse, Talented, and Hardworking”

people, but the accompanied promotion videos below gather all people strictly from USA. On the

other hand, Cadbury’s main projects concern the local communities and farmers, not that much

the topic of cultural diversity .

I would recommen d both parts to rely more on showing some employee events with

different cultural background , make the website more eye -catchy with employees taking place in

the videos from different departments and countries. Also, both parties are missing a page with

some core values regarding this topic, as usually every institution should have. Last but not least,

the website should offer more language variations if English it’s not strictly the unique language

spoken with in a company.

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Bibliography:

Rossi, Stefano and Volpin , Paolo F., Cross -Country Determinants of Mergers and Acquisitions

(September 2003). ECGI – Finance Working Paper No. 25/2003; AFA 2004 San Diego Meetings;

EFA 2003 Annual Conference Paper No. 251.

Essays, UK. (November 2018). Cross Cultural Management A study on Cadbury and Kraft

Merger. Retrieved from -cultural –

management -a-study -on -cadbury -and -kraft -merger -management -essay.php?vref=1

-blog/6 -big -mergers -that -were -killed -by -culture –

and -how -to-stop -it-from -killing -yours

Kraft Heinz Company, 2019.Retrieved January 12, from mpany.com/

Cadbury, 2019. Retrieved January 12, from

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Kraft-Cadbury Cross-Cultural Merge Case study. (2019, Dec 07). Retrieved from http://paperap.com/case-study-606-best-essay/

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