International acquisition processes: A cultural analysis of GE Appliances’ business transformation

Abstract

International acquisitions of large, well-established western organizations by Chinese companies are now common. The cultural differences between the actors are often critical amid these processes. However, they can also be an opportunity for transformation and renewal for the acquired businesses. Regarding the dimension of organizational culture, this article analyzes the transformation of a 100-year-old American firm, General Electric Appliances (GEA), after its acquisition by the Chinese multinational company Haier. As a result, the company went from a nonrevenue growth business to a double-digit growth company in only 5 years. To study this transformation, we apply a cultural analysis framework based on Edgar and Peter Schein’s work. This article contributes to the debate on corporate cultural analysis in the context of international acquisitions by providing managers and scholars with a detailed account of GEA’s transformation.