Strategic Change at Chrysler

Topics: Automotive industry, Strategic management, Daimler AG Pages: 18 (5165 words) Published: September 15, 2013
Strategic Change:
The case study of Daimler Chrysler

Introduction

Globalization results in rapid and constant business environmental changes. As a result, most organizations tend to be more transformational organization so as to be flexible to respond promptly to those changes. Strategic change is one of the effective solutions to this situation. This paper will discuss the nature of strategic change in the first part. The next section is an analysis of Daimler Chrysler case study; whether the strategic change by merger bring them sustainable competitive advantage.

Nature of strategic change
The causes of strategic change
To be effective transformation organization, a company needs to be ready for incessant change of outside and also inside circumstances. The factors which lead to strategic change in organization are categorized as external environment, including competitor’s movement, governmental regulation, trade constraint, economic situation, information technology advance and market infrastructure: such as accessibility and cost of supply (Appelbaum et al., 1998); (Brock et al., 2005); (Douglas and Wind, 2001) and internal environment containing new vision and operation, bringing new technology in institute, new CEO, organizational culture, and merger and acquisition (Appelbaum et al., 1998). For example, multinational companies need to adjust the way they do business to fit with each marketplace in order to succeed their businesses by maintaining the global standard in terms of the components of marketing mix, such as quality of products. In contrast, some policies of management, such as human resource management, distribution procedure, pricing and advertising, must be adapted to agree with local law and culture (Douglas and Wind, 2001). Moreover, contemporary business system which has been becoming more globalization, rapidly and continuously change in technology industry, and higher degree of competition in each industry, forces organizations which would like to survive by innovating themselves to be more flexible in order to respond rapid change effectively and paying more attention in the way people in organization think and learn (Kenny, 2006). Therefore, strategy for transformational organization must be build and re-build coherently.

The process of strategic change
The best way to change strategy within organization is to integrate the incremental and radical process of change together. Incremental change is defined as rational, anticipative and proactive change. This kind of change takes long time process because of changing little at a time (Kenny, 2006); (Pfeifer et al., 2005); (Appelbaum et al., 1998); (Beugelsdijk et al., 2002). Moreover, it seems to be the plan emphasizing on effective restructure along with transformational leadership, provides top-down management which suit for static and predictable situation and easy to be learned. It can often be seen from the past that strategic change was rather annual plan which became the rigid arrangement, limited abilities of response to changing environment and conflicted with globalization (Kenny, 2006). On the other hand, radical change is classified as emergent and reactive change (Kenny, 2006); (Pfeifer et al., 2005) which is rapidly reaction to changing circumstances such as technology competition and new government regulations (Beugelsdijk et al., 2002). This type of change, therefore, is more flexible. In other words, it is called organism respond to surroundings which stresses on co-alignment between organization and environment by labeling employees as co-strategists to create teamwork or involvement in stead of top-down command (Kenny, 2006).

Accordingly, the combination of those two approaches of change is suitable for transformational organizations which have to consider holistic approach which helps produce flexibility to counter uncertainty situation, in addition, there have to be strategic change plan which can be learned...

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