Examining a Business Failure Alexandra Dunda LDR/531 October 3, 2010 Eric Heard

The morale among the American employees was at its lowest. In a matter of two years. or were fired. personalities. nationality and technological systems. These Organizational . which is the core of subsequences turnover. are a viable strategic option to achieve the objectives of growth. Daimler-Chrysler failed to understand the organizational culture. causing anxiety and low productivity. The most often cited reason for the failures is the total lack of understanding between the two parties of the culture. changing the name to DaimlerChrysler. acquisitions or joint ventures. of any form be such as mergers. There was not partnership of equals in the combination of domestic and international corporate. In 2007 Daimler then sold Chrysler for $7. Both parties come to the partnership table with difference perceptions and contributions to the merge (Badrtalei & Bates.DAIMLER-CHRYSLER BUSINESS FAILURE Daimler-Chrysler Business Failure 2 In 1998 Daimler-Benz paid $37 billion for Chrysler. diversification. 2007) The cultural compatibility was the big failure of this merger. which involves organizational environments. left. One member of the partnership will be dominant based on financially or market position. all the top American executives have either retired. absenteeism. deviant workplace and organizational citizenship behavior (COB). economics of scale. What happened? Partnerships. All these factors have generated a poor job satisfaction. synergy or a global presence The typical reason for failure was the partnership was based only on financial and economic information or what is more commonly called "hard " data and rarely involved data to support the meshing of the organizational cultures or the "soft" and "mushy" issues (Badrtalei & Bates.4 billion to Cerberus Capital Management. and were replaced by German employees. and differences between national cultures. 2007).

To do so. Offering some kind of incentive to the individual avoids social loafing. Each member provides different theories. Individual contributions must be evaluated in order to discourage social loafing.DAIMLER-CHRYSLER BUSINESS FAILURE 3 Behaviors can be explained using different variables of how individual perceive the environment and culture. therefore is essential to develop an equity plan after fair evaluation of each employee. The expectations in individuals are elaborated according to the trust in the system organization. and what motivate them. One strategy for discouraging social loafing is simply peer pressure. . To drive expectations is necessary from organization that managers have a clear big picture of what teams and employees need to accomplish for the success of the teams and employees in relation with the company’s goals. The equity from individuals has too many perceptions. Chrysler did not use Strategies to discourage social loafing. Chrysler failed to detect the conception of individual equity and how it impacts team performance because individual perception of fairness affects the team performance. an adequate process that include evaluation and feedback in which the employees can recognize what they are doing with the purpose of to manage their own careers and improve themselves. the organization must implement a company strategic planning that define objectives. Is very important from the organization to provide individuals with a trusting environment that make them fell fairness from all the members in the organization. but is clear that the contribution of individual affect the team performance. Is not theory that shows for sure how the impact of individual on team performance. Managers need to correct any kind of bad behavior associated with social loafing right away. the communication process needs to carry a complete information about cultural environment goals as well the rewards to gain after the performance evaluation is done.

Like a merge company was a need to create a partnership that spans different corporate cultures because workers and managers on this new merge need to understand and capitalize on diversity and combine efforts to offer the product and services to customers in this open market with a changing labor force that needs to learn the value of different races. Chrysler did not study the behavior to see if matched the standards to improve performance. religion. Chrysler failed to blend his mission and goals by attracting. Chrysler failed 4 to use behavior modeling and the practice model evaluation methods. Adding to this. So Chrysler failed because did not use an adequate measure to success in this learning culture.DAIMLER-CHRYSLER BUSINESS FAILURE An excellent evaluation opens the path to a good and positive feedback. levels of physical ability and family structures. Managing Diversity requires a systemic approach and long term commitment. Daimler’s philosophy that Chrysler didn’t need separate dealerships for Dodge and Chrysler products was a big reason for the continuous dealerships alienated owners and confused buyers. motivate and retain the most talent people because the philosophy that motivate employees attract satisfied customers is the base to succeed in business mergers. According to The Ethic Awareness Inventory (EAI) the new . sexual orientation. cultures. The practice makes perfect. language. and the inappropriate behaviors can be corrected immediately. encouraging the team members and all the people involved in the evaluation process to participate. 2005). ethnic groups. Consumers interested in a Jeep Wrangler didn’t need to consider or view Chrysler 300s on the same lot. before they become ingrained in the trainee’s behavior. As part of any performance appraisal is necessary to correct right away with an adequate feedback. It is essential to build trust among members that create adaptability and acceptance. “Behavior modeling tends to increase when the model is rewarded for behavior and when the rewards (Cascio. Chrysler did not use technology to move information that allows sharing information to get to know each other in this merger.

thus this needs an educated and self-directed employee. Managers today emphasize teamwork and cooperation rather than discipline. establishes corporate values. support and teach employees rather than tell them what to do (McHugh. in change today’s mangers move from one company to another as their careers unfold. Managers today are using empowerment. because now managers are being educated to guide. A leader doesn’t need to be a manager. and doesn’t fear change (McHugh. in which could prepare alternatives courses of action that may be used it if the primary plans don’t achieve the organization’s objectives. A leader has a vision and inspires others to grasp that vision. train. Contributions of Leadership and Management Managers and leaders failed too. Managers did not have an open mind at stress situation and did not how to deal with unexpected situations without losing the vision of goals. A manager plans. 2008). but managers need to carry out the leadership style vision. so is 5 complex to be generalized. 2008) The cooperation and integration among companies have increased and was needed from Chrysler that managers allow freedom.DAIMLER-CHRYSLER BUSINESS FAILURE environment of the 21st century calls us to better understand the dynamics of organizational ethics and to assess the impact of inconsistencies between corporate policy and individual thought because the values are based in the perceptions of and individual moral attribute. . organizes. Values are determined by what we think is right or wrong depending on the own individual experience and belief. Managers 50 years ago can stay in an organization for the whole labor life. and controls functions within an organization. Chrysler failed to use a contingency planning. Because the workforce was increasingly diverse. emphasizes corporate ethics. “giving employees the authority and responsibility to respond quickly to costumer request. They tend to be friendly and treat employees as partners making the manager more progressive.

. various characteristic of its environment. he reduced the management board from 17 to 13 by removing unwieldy board members. To that effect. so the best way to go is implement policies to avoid any kind of discrimination that attempts to the good work environment. so encourage the employ to work and build the skills and competences for to growth. and the Commercial Truck Division (Muller et. Chrysler Brands headed by James Holden (Stall Kamp’s replacement). Intercultural communication. It is important to have a cosmopolitan perspective to avoid cultural shock and promote a cohesive work environment that makes possible to melt two families in a merger. .DAIMLER-CHRYSLER BUSINESS FAILURE 6 Organizational structures to the failure DaimlerChrysler is a model for global mergers. 1999). Mercedes-Benz Division. al. The resulting board had eight Germans and five Americans. such as stability and complexity. al. which allow the employees to be more responsible for their tasks while are being motivated for the empowerment from managers and the good quality of life. The discrimination is going to be present while exist a diverse workforce.. training at all levels and cross-cultural marriage commitment must be present to succeed in mergers with different cultures. 2003) In conclusion Managers who adopt a democratic leadership style influence employee’s perception of their job. 2007) The choice of this design include the size of the organization. its technical system of production. Schrempp accelerated the integration. and its power system (Mintzberg et. He further created three vehicle divisions. The merger has a matrix structure that creates dual lines of authority and combines functional and product departmentalization (Robbins & Judge.

Effect of Organizational Cultures on Mergers and Acquisitions: The Case of Daimler Chrysler. International Journal of Management. Upper Saddle River: Pearson Education.). Retrieved from Business Source Complete database. & Bates." Business Week. (2006). Ethical Leadership and Diversity ( 6Th. 24(2). 5(10). S. Inc. "Lessons from a casualty of the culture wars. Cascio.F. 2004. A Pearson Education Company. Mucha. 303-317. J. D. Human resources management: Finding and keeping the best employees. Organizational Behavior. Joann. Robbins.. W. profits.). A. "Why Chrysler is smiling again.). Retrieved from University of Phoenix (8th ed. The Williams Institute for Ethic and Management. (2007). P. (2008). & Judge.ethics-twi. Muller.. G. 1999.. Prentice-Hall. (2005). New York: McGraw-Hill. Ed.F. quality of work life. McHugh. M. Managing human resources: Productivity. Yukl. Retrieved from http://www. (2007)." Business. T. J. November 29.New York: McGraw-Hill.DAIMLER-CHRYSLER BUSINESS FAILURE 7 References . Retrieved from the University of Phoenix (7th ed.

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