Damelar Chrysler

Topics: Automotive industry, Daimler AG, General Motors Pages: 18 (4816 words) Published: March 20, 2014
THE DAIMLERCHRYSLER MERGER
– A CULTURAL MISMATCH?

Recebido em 03.09.10 / Aceito em 08.12.10

Julia Hollmann1, Aletéia de Moura Carpes2 e Thiago Antonio Beuron3

Abstract
American company Chrysler Corporation due to differences in the organizational cultures involved or due to a so-called ‘clash of culture’. What happens when two successful car producers with different know-how and a different knowledge background, different work processes, different product portfolios and last but not least, completely different corporate cultures decide to merge? Daimler-Benz and Chrysler wanted to strengthen their position during economically difficult times for the car industry by juggling the crisis together and they hoped to be able to combine their strengths. Therefore the two companies decided to fuse in 1998. But not even ten years later Daimler-Benz once again sold all its shares of the Chrysler division. The dream to become the third biggest car producer of the world, behind General Motors and Ford, burst. The expected and wished for synergy effects stayed out. Instead of gaining competitive advantage over their competitors, the merger rushed the two car producers ever deeper into the crisis and did not provide the companies with the necessary tools to overcome the recession. The presented paper deals with the failed merger of the German company Daimler-Benz with the U.S. American company Chrysler Corporation due to differences in the organizational cultures involved or due to a so-called ‘clash of culture’. Keywords: Organizational Cultures. Mergers. Competitive Advantage.

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Master Student of International Business Studies (Universität Paderborn- Germany). E-mail: juleh@mail.unipaderborn.de Master Student of Administration (Universidade Federal de Santa Maria- Brazil). E-mail: alecarpes.adm@hotmail.com Master Student of Administration (Universidade Federal de Santa Maria- Brazil). E-mail: thyagobeuron@hotmail.com Rev. Adm. UFSM, Santa Maria, v. 3, n. 3, p. 431-440, set./dez. 2010

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THE DAIMLERCHRYSLER MERGER – A CULTURAL MISMATCH?

1. INTRODUCTION
Today’s economy becomes more and more affected by the continuously rising globalization. (MITTERMAIR; KNOUREK, 2006). Due to the internationalization of the markets businesses face fiercer competition, rising cost pressures and the necessity to adapt business processes at a multinational level. On these grounds, more and more cross-border Mergers & Acquisitions (M&As) can be observed.

Within the presented article the merger of Daimler-Benz, the German car manufacturer that looks back on a tradition of high-quality production of luxury cars that already began in the late 19th century and the Chrysler Corporation, that conquered the U.S. American passenger car market thanks to its innovation and creativity, is studied. The paper examines in detail two companies that in many respects could not be more different from each other. But on the other hand, they were united by the shared desire to make it to the top of the world’s car industry and to strengthen their position in the ever more hard-fought industry and to gain competitive advantage over their competitors instead of lose ground during economically difficult times. In the late 90s the world’s car industry had to face a number of challenging problems. The permanent overcapacity of many carmakers, the strengthened position of the clientele and the rising environmental consciousness threatened the existence of a number of car producers. (FINKELSTEIN, 2002).

When faced with the demanding and rising challenges on the car market and according to the slogan what we do not accomplish alone, we will then accomplish together, Daimler-Benz and the Chrysler Corporation decided to merge in the year 1998, with the stated aim to generate the greatest synergy effects possible. The two companies were thought to complement each other. The strengths of one of the partners were supposed to offset the weaknesses...

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