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Daimler And Chrysler Merger Essay

1170 words - 5 pages

Company BackgroundChryslerChrysler Corporation (CC) was founded in 1925 in America by Walter Chrysler. Currently Chrysler holds the position for being the third largest auto manufacturer in North America. The company has created a well-built reputation with its well-engineered cars that targets the middle class society. The core competences of Chrysler include efficiency and speed to market. This is apparent through using various production methods that focuses on cost savings and mass production techniques. Using these techniques Chrysler had well received automobiles such as, the Dodge Charger, PT Cruiser, Grand Cherokee, Liberty, Wrangler and Patriot and these were in the $15,000 to $30,000 USD price range. Over the past few years the company has shown peaks of revenues followed by a heavy fall in sales, in which the US government has bailed the company out on several occasions. At the time of the merger with Daimler Benz, the company was faced with increasing competition from the Japanese automakers, Chrysler was seeing substantial decrease in sales and was not in a dominate position in the merger. (Waller David, 2001)DaimlerDaimler Benz was incorporated in 1926 after the merger of Daimler and Benz companies. They are currently the 13th largest auto manufacturer in the world and hold the position for being the largest truck manufacturer in the world. The new company has dominated the international market with their famous line of Mercedes Benz vehicles that exhibits premium quality and luxurious attributes in the past decades. The core competences of Daimler Benz include quality and the use of technology. Harnessing the power of German engineers and technology, Daimler brought technological changes to the entire auto industry in areas such as engine, transmission, safety and offering a rich driving experience. The notable innovations Daimler Benz has contributed to be: anti-lock braking systems, airbags, seat belt pre-tensioners and much more. The automaker has manufacturing facilities in different regions of the world including; North America, Europe and in some Asian countries. (Waller David, 2001)Problems to Why the Merger FailedCritics often acclaimed that the merger was a “match made in heaven”; however this obviously wasn’t the case. The two companies shared many differences that led to the fall of profitability margins. The notable problems that led to the downfall are:Management Style: The differences in management style were apparent in the two companies. Daimler held a structured and hierarchical style where decisions were made by top management and staff-line workers had little to say to contribute to the overall decision making process. On the contrary, Chrysler exhibited a much dispersed “bottom-up” style where major decisions were made throughout the entire organization.Differences in Cultural Awareness: There was a clear conflict in terms of cultural acceptance in the two companies. Since the two...

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