DaimlerChrysler Merger: The Quest to Create One Company Harvard Case Solution & Analysis

Question 1:

            The merger is always a big challenge for the companies. In the case of the merger of Daimler and Chrysler, there were many issues which both companies had to handle. The merger of these two automobile giants was a big challenge. There were requirements for  solving the issues like blending of corporate and national cultures and operations. The head of the companies knew that the merger would bring the cultural issues for both of the companies as Daimler belonged to Europe and Chrysler was an American automobile company. Both companies had faced the challenges and succeeded in their history and also had an idea what challenges they were supposed to face in the merger.

            The major problem with the merger was that the employees of the companies were of different nationalities. The employees were from Germany and America. The history of both the nationalities was not that good, as they shared the history of the blood-shedding battles, revenge and many disturbing events, this factor was considered to be beyond the hands of the CEOs of America and Germany. As both of these nationalities had the cultural and history differences,  the employees could be directed towards the goals and success, but their feelings could not be eliminated completely, for their colleagues.

            Both of the companies had the different cultural heritage which was reflected from their modern shape of companies regarding their histories. The Germans had gone through tough battles in the past, so they were quite used to living in the dictatorship environment. That is why the German employees were very disciplined and formal. They were quite committed towards their work and also they were used to work under tough and strict conditions. They worked in a way that they developed set of rules and worked according to their rules. This could be easily seen in the hierarchy of Daimler.

            The culture of Chrysler reflected the American corporate culture which is why, the employees had the attitude of being relaxed, though working hard, but according to their rules and regulations   they believed in the environment which was quite relaxed as compared to the Daimler’s corporate environment. The employees of Chrysler were quite casual in terms of their work, their dressing and other. That was a big cultural difference between the American and German corporate culture. The Chrysler’s employees used to drink coffee at the time of the meeting and attended the meeting in casual dresses. It was perceived that the Americans were not serious about their work and the orders.

            Whereas, Daimler had a very strict environment, the tolerance level was found to be zero. The management was quite strict and it was observed that they used to take rational decisions and also that they fired many employees on the basis of their low performance. This type of strictness and organization culture was not helping Americans to mix with the Germans and also to go according to them.

Impact of Cultural Differences

            The cultural differences are one of the main problems for the companies.  The main thing that companies have to analyze is that whether both the companies can adjust to the cultural differences and if the companies are international so they have to consider that as well before they merge.

            Similarly, Daimler and Chrysler were also involved in a merger, but the merger faced many problems and challenges for both the organizations. As Daimler was German company and Chrysler was an American. Both the companies had different cultures which caused many problems for the organizations. This caused a lot of impact on the merger of both the companies. The cultural difference between both the companies resulted in many problems. It was the source of the confusion, distrust and low in the employees of both the organizations. The main challenge for the CEOs of both the companies was that bringing the employees of the companies together. Even if they were successful in bringing them together for achieving goals, they were not successful to eliminate the feelings they had for each other, despite the historical facts related to both cultures.

            The international mergers are always a risk, as Daimler was in Europe and Chrysler was in North America. There was a huge communication gap between the two organizations. It was hard to integrate the merger between both the companies as there was a lack of coordination among the employees of the companies. Daimler and Chrysler’s challenge was not only creating a bridge between the corporate cultures of both the organizations, but there was a need of overcoming the problems that arose due to national cultural differences. The cultural distance was causing the problems for both the organizations, the management style was not being adopted and also this resulted in cultural crash.....................

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Centers for historic merger Daimler-Benz AG and Chrysler Corporation and the subsequent search integration. The subtext to this central question include a comparison and contrast of cultures operating and business processes of the two companies, as well as their history, position in the auto industry, and corporate values ​​and image. Also focuses on the dynamics of integration by two companies. The use of "what if" scenarios, students can explore the role of top management in a merger, its execution, and the subsequent integration efforts. Gives students the opportunity to present and develop a strategy for integration. Best suited for research in strategic management, corporate entrepreneurship, global management, leadership and change management or organizational behavior. "Hide
by Allan R. Cohen Source: Babson College 27 pages. Publication Date: January 1, 2000. Prod. #: BAB041-PDF-ENG

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