Organizational Alignment in China during Mergers and Acquisitions

One of the most common reasons why Chinese companies require an organizational alignment is mergers and acquisitions (M&A), especially with foreign companies.

The M&A market in China is dominated by the more economically developed regions, such as Beijing, which had 119 M&A deals in 2021, and Shanghai, two of China’s largest cities. However, even though the domestic market is where companies in China conduct most of these transactions, we have seen that the value of inbound international M&A transactions has increased in recent years, supported by additional market opening initiatives launched in 2018. Although the COVID-19 pandemic (2020) led to a decline of the foreign-backed deal’s value, there is still plenty of activity in this market.

According to Statista, nearly 12,800 corporate acquisition agreements involving firms from Greater China were made public in 2021, which meant a 21% rise over the prior year. The value of M&A transactions involving Greater China companies totaled 637.4 billion US dollars (including only transactions with stated deal value numbers). Also, in the first three quarters of the same year, there were 1,460 completed M&A agreements involving participation from enterprises from Chinese mainland.

When involved in these types of processes there is a strong need to identify culture or talent-related obstacles which may affect the achievement of the forecasts and/or goals.

Organizational alignment guarantees employees from entry-level to upper management to share a common goal and vision for a company’s success by implementing specific tactics and ideas. Besides, it contributes an increased satisfaction and improved consumer experience. All these factors help to:

  • Lower staff turnover
  • Enhance brand reputation
  • Improve production
  • Benefit corporate culture
  • Improve client loyalty
  • Create a wholesome work atmosphere

The organizational alignment processes, due to M&A between foreign companies and companies in China, are strongly marked by the cultural differences which have an impact on communication and negotiation processes, as well as the way people conduct business activity.

Managing a team formed by Chinese and western employees successfully requires an ability to recognize these cultural differences. Not handling these properly might result in a toxic workplace with a lot of misunderstandings.

Some of the most common signs that a company needs an organizational alignment are:

  • Disengagement from employees
  • High Rotation
  • Interdepartmental tension
  • Stagnant or negative financial results
  • Constantly putting off fires
  • High stress, initial signs of burnout
  • Role ambiguity/conflict
  • Lack of innovation

Some of the differences between cultures in China that may lead to an alignment are:

  • Highly hierarchical work organization
  • Ineffective communication
  • Low proactiveness when giving opinions
  • High value to relationships and group dynamics at work

Organizational alignment is crucial because it promotes cooperation and a shared pursuit of business goals, which has long-term benefits for an organization’s productivity and profitability. It also increases employee satisfaction and improves customer experience.

In Zavala Civitas, as Executive Search and Organizational Consultant firm specialized in China, we are used to being part of organizational alignment processes and to bringing the needed change into organizations. In addition, we can be side by side with the key executives and help them adapt to the changing circumstances.

Feel free to contact us to know more about our services.

Organizational Consulting Program for a Leading Wine & Spirits/Beverage Company

By: Jose Carlos Hassan Suárez. Partner and North Amercia Director at Zavala Civitas.   Summary: One of the foremost global players in the beverage industry successfully orchestrated the transformation of a previously small-size single-channel distribution operation into a dynamic team of over 45 individuals within a concise two-year period. Zavala

Read More

The Influence of Organizational Consulting in China  

China’s businesses are continually changing to meet the demands of a vibrant and aggressive commercial environment. Firms must optimize their workforces and coordinate their organizational structures for maximum efficiency in this fast-paced climate. At this point, the knowledge of executive search organizations that provide organizational consulting services is priceless. The

Read More

Related posts

What Law Firms Should Look for in Future Partners 

In law firms, partnership has long been the reward for technical mastery. High billable hours, legal expertise, and client loyalty were historically the core indicators of readiness. But the demands of the partner’s role and the expectations of clients and colleagues have become increasingly competitive.  From Legal Expert to Business

Read More
Discover how to build a team by the best c-level talent

Why Multinationals Struggle to Hire Executives Locally in Brazil

Brazil’s executive hiring environment remains complex. Economic and political volatility, combined with bureaucratic labor laws and high labor costs, compound pressure on multinationals. For instance, Robert Walters recently shut its Brazil office amid weakened global hiring markets—signalling deeper challenges in attracting senior talent locally. Regulatory Bureaucracy & Labor Protection in

Read More
Learn the costs of a failed hire and executive search hiring processes

The Cost of a Failed Executive Hire in Spain — And How to Avoid It 

In Spain’s competitive talent market, hiring the wrong executive is one of the most expensive mistakes a company can make. According to industry research, a failed c-level hire can cost between two and three times the leader’s annual salary, once recruitment costs, severance, and productivity losses are considered. For companies

Read More

Executive Development in Portugal: Why Local Companies Are Falling Behind

In Portugal’s fast-changing economy, building future-ready executives is no longer optional. According to Eurostat, over 60% of Portuguese companies cite leadership capability gaps as a key obstacle to growth, especially in sectors like technology, industry, and energy. As Lisbon, Porto, and other regions attract increasing foreign investment, organizations are recognizing

Read More

Why Spanish Boards Are Prioritizing Independent Advisors in 2025

The role of Board Advisory in Spain is evolving. For many companies, it’s no longer just about regulatory compliance—it’s about building stronger, more effective boards. As corporate governance standards tighten and investors expect more transparency, Spanish firms are rethinking how their boards operate, with independent advisors taking on a more

Read More

Board Advisory in Portugal: Key Differences Compared to Spain

While geographically close to Spain, Portugal’s corporate governance, cultural particularities, and business structures are distinct. In this article we explore what works in Portugal to build effective governance.  The legal side: Shaping Board Advisory in Portugal  Portugal’s corporate governance landscape is shaped by the Código de Governo das Sociedades, which

Read More