Daimler Chrysler Merger Essay

3251 words - 13 pages

Table of ContentsIntroduction3Organizational Size, Life-cycle and Control3Organizational Structure7Cross-functional teams9Recent Product Innovations10Innovation Process11Conclusion14References15IntroductionIn 1998, the merger between US-based Chrysler German-based Daimler Mercedes formed the company known today as DaimlerChrysler. The merger caused rapid growth as well as numerous challenges that the company still needs to overcome. Currently, the organization is in the elaboration phase of organizational growth, marked by the need for revitalization, more efficient decision making, and reducing redundancies in the organizational hierarchy. As it faces merciless competition of the automotive industry, the company is implementing structural changes geared towards making the company more efficient in its day-to-day operations, and allowing it to produce innovative products, thus setting it apart from the competition.This paper starts out with a discussion of DaimlerChrysler's current phase of organizational development and some of the key challenges that the company is facing today, followed by a discussion of recent organizational structure changes aimed at overcoming these challenges. Next, we describe the use of cross-functional or "innovation" teams and how this approach can reduce organizational deficiencies at DaimlerChrysler. Finally, we conclude with a description of cutting-edge, innovative products that the company has produced recently, and the process of managing innovation and creativity at DaimlerChrysler.Organizational Size, Life-cycle and ControlIn 1998, DaimlerChrysler was formed as a result of the merger between Chrysler and Daimler-Benz, even though many stockholders did not wanted the merger to take place because Chrysler was not meeting its financial goals with its line of vehicles. These stockholders believed that the merger will further devaluate the stock. So Chrysler was faced with the internal problem of meeting profitability goals and not going out of business, as well as the external problem of many of the company's stockholders opposing the proposed merger (Wikipedia.org, 2006).Right after the Daimler-Benz and Chrysler merger, the organizational growth was stable; yet the company went into a financial disaster soon after the merger, "greatly depressing the stock price of the merged firm and causing serious alarm at headquarters in Germany, which sent new CEO Jurgen Schremp to take charge" (Wikipedia.org, 2006).In 2000, DaimlerChrysler was facing stiff competition and an incentive war which was forcing them to discount their vehicles. The large part of the company's competition, Japanese automakers, were able to obtain the competitive edge in production efficiency and ability to deliver innovative products to market in record time (Kano, Levinstein, 2006). In order to maintain its market share, DaimlerChrysler needed to revitalize the company by implementing a series of organizational and cultural changes.In January 2001...

Find Another Essay On Daimler-Chrysler merger

Merger of Daimler-Benz and Chrysler Corp. How a merger of two companies affect and is affected by the global market

1297 words - 5 pages , Maybach, smart and Setra. The second one Chrysler Corp. is a maker of American car brands such as Chrysler, Jeep, Pontiac, Dodge and trucks Freightliner, Western Star, and Sterling. The merger of Chrysler and Daimler-Benz is the biggest between two enterprises in industrial history. Promising a world's most profitable carmaker by Daimler Benz CEOJuergen E. Schrempp, the merger occurred in 1998. The reality wasn't as he thought. It wasn't that

Daimler-Chrysler Case Essay

607 words - 2 pages Daimler-Chrysler CaseBackgroundIn 1998, German Daimler-Benz and American Chrysler Corporation merged into what was referred to (by Business Week) as "a marriage made in automotive heaven... (that) is set to transform the way the auto industry operates worldwide.". The two companies announced it as a "merger of equals".This fusion of two of the world's most profitable auto manufacturers was the largest industrial merger in history. The new

The merger of Diamler - Chrysler.

608 words - 2 pages As with everything there are good things that come out of everything and bad things and it all depends on who and what you want to compare the two with. Immediately when Daimler took Chrysler it announced a package to reduce the work force by 20% so if you asked the people that work there they would tell you that the merger was not a good thing. If you asked the Senior CEO representatives they would tell you that it was a great thing to execute

Daimler Chrysler

1192 words - 5 pages 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

Daimler Chrysler's market strategy

689 words - 3 pages Introduction: Daimler and Chrysler which have recently merged to form the company Daimler Chrysler resulted in the company becoming the fifth largest auto maker in the world with an estimated annual revenue of $130 billion. This merger resulted in a workforce of 421, 000 employees worldwide.Mission: Our companies share a common culture and mission. We are both clearly focused on serving the customers by building world class cars and trucks. Task

Daimler Chrysler

3781 words - 15 pages next year if they have a fast turnaround to push share prices up. If not, share prices will continue to drop.Article 4: ?Canada hard hit by Daimler?s woes? (National Post Online, February 14, 2001) Industry watchers are wondering what happened to Chrysler. Chrysler?s merger with Daimler-Benz in 1998, which was said to be a ?marriage made in heaven?, has now turned bad. The North American division once boasted cutting-edge products and the highest

Case Study 2

1102 words - 5 pages This document provides an analysis on the current state of Daimler-Benz AG and Chrysler Corp IT network. It provides identified security and technological issues that will affect the merger between Daimler-Benz AG and Chrysler Corp, recommended solutions to mitigate these issues, and a timeline on how long to implement the security plan. Introduction The paper will analyze the information security and technology issues that

How Chrysler handled the 2007 recession in regard to their international strategies

1139 words - 5 pages addition, Chrysler also had heavy liabilities, and it made Chrysler’s financial situation worse. In order to save itself, Chrysler was attempting to seek restructure opportunities. In August and October 2008, Chrysler negotiated with Nissan and General Motors respectively. However, as the poor performance of General Motors in the crisis, the negotiation didn’t proceed then. At the end of 2008, Fiat and Chrysler began to discuss the merger. On

The Marketing Environment: Chrysler Corporation

746 words - 3 pages The DaimlerChrysler Corporation is a diverse international business that has many subsidiaries all around the world. Since the merger of Daimler-Benz and Chrysler Corporation in mid-November 1998 DaimlerChrysler has had many interesting things happening within their ranks. Between January 20, 1999 and March 5, 2001 DC has been sued by its number 1 shareholder, projected losses in the million to billion dollar areas, made joint ventures with its

Merger Acquisition Finance Paper

2729 words - 11 pages the basis of price. The management planned to use the growth of Daimler Benz-Chrysler in the world market as an important indicator of the success of the merger. The increase in geographical and product segment coverage was taken as a measure of success.The expected impact on the company's capital structure: There is breakthrough of sorts in where a German company's ordinary shares were listed on the NYSE. These shares trade on the Bourse in

Crysler Corporation History

5273 words - 21 pages Chrysler Corporation was born. Schrempp, Chairman of Daimler-Benz and Eaton, chairman of Chrysler Corporation, began negotiations about possible combination of two large automobile manufacturers. "We are leading a new trend we believe will change the future, the face of the industry," Eaton said five months later when the deal was announced.The two chairmen acknowledged that the merger would not be easy. Their own study of transnational mergers

Similar Essays

Daimler Chrysler Merger Essay

1101 words - 4 pages Daimler Chrysler Merger Daimler Chrysler is the result of merging Daimler-Benz and the Chrysler Corporation in late 1998. The merger was to be one of the largest on record, and the beginning of a new wave of mergers sweeping through the automotive industry. Although the companies were manufacturing generally similar products, the differences between those products could not be wider. Chrysler was known for a product line

Daimler And Chrysler Merger Essay

1170 words - 5 pages 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

Merger Of Daimler Benz And Chrysler Corp.

2434 words - 10 pages determine whether or not the anticipated benefits were realized after the DaimlerChrysler merger is shareholder value or Economic Value Added (EVA), which is a technique developed by the account firm Stern Stewart. The EVA is after-tax profits, minus the cost of capital (McElroy).In the instance of the merger and acquisition of Daimler-Benz and Chrysler Corporation, "both of the companies were extremely successful using their own methods," says

Daimler Chrysler: Merger Of Equals Or Global Fender Bender?

1111 words - 4 pages merger: the original Chrysler shareholders or the new Daimler-Chrysler shareholders? Explain your answer.Who benefited most? Those who sold their Chrysler stock at the highest price offered before the merger. Why? The value of the Daimler-Chrysler stock plummeted following the merger when profits became stagnant. It didn't help the situation when the company stock was no longer listed on the S&P 500 because the company wasn't incorporated in the