Restructure with respect and dignity
The acquiring company should understand thestress and emotions after being laid off. The employees should be let go with dignity andrespect. Also, employees could be conveyed that they would be laid off in near future withoutgiving exact date. So that they would start looking for new jobs. This uplifts the motivationlevel of rest of the employees.
Lack of information:
Seamless information exchange through forums and at all levelsremoves ambiguity and insecurity.
Cultural issues are not dealt with:
Cultural differences between the organizations makerestructuring difficult as it leads to ambiguity regarding the intentions. A policy decisioncould have an unexpected response from the newly acquired company simply because theymisinterpreted the decisions. If the merging companies are of different nationalities then itbecomes more challenging because of communication gap arising out of language barrier.
Chrysler Merger: a Cultural
Mergers and acquisitions take place to realize the synergies between the two or morecompanies involved. Using Cultural theories, explain why do you think the Daimler-Chrysler merger failed to realize the synergies that were expected from it?
Ans. Daimler-Chrysler had planned for synergies by reaching to global automotive market throughgeographical reach and product segment coverage. But these synergies were not realized.Daimler-Chrysler failed to integrate the two organizations after the merger. Thus, expectedsynergies could not be realized. This failure could be attributed to the difference in corporatecultures.
The management style:
German and American styles of management were totallydifferent. They had different decision making process. One followed methodical processwhereas other valued creativity.
Benz had bureaucratic culture whereasChrysler has an egalitarian culture. To avoid the clash of culture it was decided to let the twocompanies continue with their existing management styles. But when Chrysler performedbadly in 2000, its senior managers were replaced. The German style of management werebeing imposed on Chrysler. This drove the morale of employees down.
Difference in nationalities:
This lead to language barrier between the organizations.Though, they tried to bridge this gap, there post-merger integration efforts were not fruitful asit was authoritarian in nature.
Delay in Restructuring and layoffs:
DCX fired two presidents of Chrysler after 2000.Further, three CEOs were fired. But these changes took place after 6 months to 12 months.According to GE, one of the most successful acquirers, once a company has decided torestructure, it should be done as fast as possible. Also, the employees, if laid-off should betreated with respect and dignity. A slow restructuring as followed by DCX hampered