Daimler / Chrysler: An Examination Of The Failure

658 Words3 Pages
Looking into the failure of Daimler / Chrysler one is able to see how from the onset of the merger and acquisition that the destiny to fail was inevitable and predictable. The following paper will examine this failure based on the organization behavior of each and the contributions of the leadership, management and organizational structures that helped lead to the failure. Briefly the merger and acquisition of Daimler / Chrysler was heralded as a logical business combination. Chrysler gains international exposure and Daimler gains lower cost models with higher sales volumes than their higher-priced models1. Daimler-Benz paid $36 billion to acquire Chrysler. Both organizations prior to the merger were seen as very profitable and culturally similar. The cultural divides between the American based Chrysler and the German based Daimler-Benz presented the first and largest challenge to the merger and acquisition. At Daimler-Benz the culture was more formal with a structured management style. Chrysler had a freeform and relaxed style. Both business units also held differing viewpoints on issues such as pay scales and travel expenses. With the increase in dominance of Daimler-Benz the satisfaction and job performance fell off with Chrysler employees. The turnover rate of executives and engineers increased as well and thusly made the executives at Daimler-Benz grow increasingly more frustrated and disappointed with the Chrysler business unit. This dissatisfaction increased the level of involvement by Daimler-Benz to try to understand what was failing, but the perception at Chrysler was that Daimler-Benz was attempting to assimilate and overtake the corporate culture within Chrysler. This perception and the failure to understand the cultures and the differences with the cultures began the vicious circle that inevitable lead to the failure of the merger and acquisition2.
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