Operational Complexity

Scholars advise foreign firms to seek local partners to reduce their “liability of foreign­ness”—their risk of misstep, or even gov­ernment expropriation, due to unfamiliarity with local institutions (Henisz, 2000).

For Daimler and Chrysler, whose “cross- cultural marriage” ended in 2007, the Chicago Tribune reported that “there are those who say the merger, which faced significant cul­tural differences, was doomed from the start.” Dave Healy, analyst with Burnham Securities suggests, “You had two companies from dif­ferent countries with different languages and different styles come together yet there were no synergies. It was simply an exercise in empire-building” (Mateja, 2007, n.p.).