Helene BezierVatel- Los Angeles

Cross-Cultural Management and NegotiationOil ad Wasser Case Summary

This Harvard Case, Oil and Wasser, deals with a merger between two food

companies. One is English: Royal Biscuit, and the other one is German:

Edeling GmbH it was supposed to be an amicable “merger of equals”;

Royal Edeling.

People

Michael Brighton, head of human resources of Royal Biscuit.

Dieter Wallach, head of human resources of Edeling GmbH

Sir John Callaghan, chairman of Royal Edeling. In this case, he makes the

vision for the new company clear and appealing to parties on both sides

and gives his managers sufficient authority to implement it.

Issues

Those two companies are engaging in a “merger of equal” but integration

planning has fallen. Royal Biscuit Human Resources head Michael Brighton

urgently wants to work on a leadership development plan for the merged

company’s executives, but seems to be on an entirely wavelength than

this German counterpart, Dieter Wallach.

Brighton and Wallach need to create a new creative plan together.

Possible solutions

Sold as a friendly merger of equals that would create the world's second-

largest consumer foods company out of British and German inputs, the

reality is that the entrepreneurial Royal Biscuit is in a stronger position

than the conservative, family-owned Edeling GmbH. Yet both sides have to

come to agree on details of a new organizational structure within a month.

Sir John Callaghan, CEO of the British company, is angrily criticizing both

companies’ HR chiefs. Yet Callaghan is the one most to blame, he has

abdicated his responsibility by delegating important tasks without giving

his executives a clear understanding of the new company’s primary goals.

An entirely fresh strategy, organizational model, and guiding principles for

the new company must be worked out by a team comprised of executives

from both sides.

Recommendation

Sir John Callaghan should focus the executive team and board of both

companies on developing a new vision, a clear set of expectations, a solid

operating style and a culture that draws upon and respects the English

and German traditions but rises above nationalism.