Intercultural Business Case Study
The internationalization of the business markets has given rise to fierce competition raising the pressure for the players in the market both big and small. The pressures make it necessary for the automobile players to adapt business at the multinational level. This gives rise to more cross-border acquisitions and mergers. Such demanding and continuous challenging market supported the slogan ‘what we cannot accomplish alone, we will then accomplish it together’, the German luxury car maker Daimler-Benz signed a merger with the North American passenger car giant Chrysler in the late 90s. Inspite of the wide differences they experience, they merged to gain competitive advantage in the tough global market and to reach the top position in the global car market which were in the hands of their rivals GM and Ford and also to strengthen their position to keep themselves well-grounded even during the low economic times. With the merger the DaimlerChrysler which they called it as ‘merger of equals’ were able to make to the 3rd position in the world car industry, the merger was later dubbed as ‘marriage made in Hell’ when the companies fell apart and lost the market. Though there was a promising look from the merger, the wide differences in organizational behaviour, culture, style of working, regulations and lifestyle increases the risk for such cross-border culture mergers. This is an attempt to support the previous works to show how these differences can dissolve the mergers and ground the company.
Experts and analysts had mixed opinion about the merger in 1998. Though the companies sounded positive with their synergies at the time of merge, the cross cultural working and attitudes posed a lot of risk for the merger (CaseStudyInc, 2008) Daimler-Benz worked it the German way and the Chrysler wanted it the American way and hence at the end both the companies had to get away with each other. The merger proved to be a very costly mistake for both the companies. The merged firms admitted a loss of €20 million. All the reason owing to the wide cultural differences both the companies were rooted from. They had differences in their working methods, culture, and organisation behaviour. Daimler worked with systematic decision making, whereas the US company encouraged creativity. Chrysler encourages taking risks and they did everything through trial-and-error-method and they were well known as ‘risk-taking underdog’ (Katpul, 2012), with Daimler focus on methodical way of working with minimal risks. They had the process of planning then organizing it and then the top executives had the controlling authority. Chrysler showed employee empowerment with equal precedence and valued efficiency, the American way of setting goals and monitoring the implementation by the employees but Daimler believed more on hierarchical and centralized decision making process with more of traditional respect (CaseStudyInc,...