Global Business Stratey

Paul Desmond Savuriar

Student Number:

M00336942

Subject:

MGT 3203

Managing Across Borders

Title:

Coursework 2

Individual Case Study on

Alcatel-Lucent Merger

Submission date:

4th Febuary 2011

Word Count:

1632

Introduction

In a merger, cultural differences are more vital to overcome then fighting for equal power or profits. (Harford, 2003) The marriage of Alcatel and Lucent was never going to be easy. To some extend the merger was a good business step. Lucent's with its wireless business nicely complemented Alcatel's global image and its prowess in fixed-line and broadband. However their cultural differences were among many challenges that Alcatel-Lucent had to face during the merger. One was hierarchical and centrally controlled, the other entrepreneurial and flexible were among the many differences that caused the company to suffer in sales, stocks and employees. (Massie, 2007)

1) Referring to the case, what conditions and negotiation factors pushed forth the merger in 2006 that were not present in 2001? (8 marks)

One of the factors that the merger happened again in 2006 was because of the increasing number of new competitors in the telecommunication industry. Business Monitor International (2010) quoted that "Alcatel acquired Lucent for US$13.4bn with hopes of facing down the increasing competition in the market from ZTE and Huawei as