Intercultural Communication and Power Dynamics in International Acquisitions

Based on the case of Chinese acquisitions in the UK, this paper explores the relationship between intercultural communication and power dynamics between headquarters and subsidiaries. Drawing on theories of communicative action—which view power as being mediated and reallocated through discourse—this study highlights how the balance of power is constantly renegotiated between the acquired and acquiring firms. The results complement the resource-based view of power through exploring the communicative dimension; in a postmerger integration situation, the power conferred by the superior resources (and legal status) of the acquirer is mediated through the discourse between managers in the acquiring and the acquirer firms. In evaluating the interactions between the parent firm and newly acquired subsidiary, we explore the specific dynamics conferred by the cross-border nature of the acquisition and by the differences in culture and in relative institutional development.