Analysis on Human Resource Risk Management in Cross-border Mergers and Acquisitions

Abstract

As an emerging economy undergoing structural reform, employment quantity and quality in China benefit from outward foreign direct investments. Cross-border mergers and acquisitions have been developing rapidly. International human resource integration is one of the determining factors in the success of the outward direct investment. Human resource management risk is more complicated in the situation of cross-border mergers and acquisitions. With case studies from cross-border merger and acquisition practice in China, this paper studies the risks in cross-border mergers and acquisitions, and gives corresponding coping strategies. Human resource management risk has various forms in cross-border mergers and acquisitions, arises from various source, such like labor risk, cultural difference, organizational cultural divergence, incentive system. This paper analyzes strategies for international human resource management, include localization strategy, social responsibility of multi-national corporation in host country, communication, incentive reward system and due diligence before merger and acquisition.