Daimler Chrysler Merger: Cultural Mismatch & Merger Process
"Explore the Daimler Chrysler merger, from the history of both companies to the motives behind the merger, cultural differences, and analysis post-merger. Understand the impact of this significant automotive industry merger. Prayash Neupane discusses the success, failure, and his opinion on the merger for a comprehensive view."
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
DAIMLER-CHRYSLER MERGER: A CULTURAL MISMATCH??? MERGER OF EQUAL OR MARRIAGE MADE IN HEAVEN By, Prayash Neupane
WHATS IN THIS PRESENTATION ??? Introduction ( History of both companies) Merger Process Merger motives Success and failure Cultural differences Analysis after merger Conclusion My Opinion on merger
DAIMLER-BENZ (1926-98) In 1885, Daimler together with Maybach began work on the first engines that were designed specifically for use in motor vehicles. This German firm, initially operating at Cannstatt near Stuttgart, was the origin of the business variously known as Daimler Motoren Gesellschaft from 1890 to 1926, and then Daimler-Benz from 1926 to 1998. Daimler Benz was founded in 1926. An Agreement of Mutual Interest - was signed on 1 May 1924 between Karl Benzs Benz & Cie., and Daimler Motoren Gesellschaft.
CHRYSLER CORPORATION (1925-98) The company was founded by Walter Chrysler (1875 1940) on June 6, 1925. The Chrysler was a 6-cylinder automobile, designed to provide customers with an advanced, well-engineered car, but at a more affordable price than they might expect. The advanced engineering and testing that went into Chrysler Corporation cars helped to push the company to the second- place position in U.S. sales by 1936.
MERGER PROCESS In May, 1998, Daimler-Benz and Chrysler Corporation, two of the worlds leading car manufacturers, agreed to combine their businesses in what they claimed to be a merger of equals. The process began when Jurgen Schrempp and Robert Eaton met to discuss the possible merger on January 18, 1998. The merger was completed on November 12, 1998. The merger resulted in a large automobile company, ranked third in the world in terms of revenues, market capitalization and earnings, and fifth in the number of units sold. German and American styles of management differed sharply. To minimize this clash of cultures, Schrempp decided to allow both groups to maintain their existing cultures.
MERGER MOTIVES Daimler s motives Chrysler s motives Access to US market Access to Europe market Reduce cost of production Avoiding another crisis Fear of loosing their competitiveness Improve R&D department Wish to reach more middle class buyers Overcome the challenge of excess capacity and overproduction
SUCCESS OF MERGER The largest merger, before 1998 Increasing market power Flexible ways of integration of two different countries
SWOT ANALYSIS Strength Weakness Combined two different culture Merger/ combined two strong companies. Employee have been leaving at high rate A leader of motivation Harder to inspire vision Strong existing product brand Record revenue & increasing market share
SWOT ANALYSIS Opportunities Threats Quality & engineering skills Does not have corporate brand identity Distribution into the key markets Competitors New distribution of networks Behind in the research & marketing of hybrid autos Cultural differences
AFTER MERGER SHARE PRICE Price History US:DCX (1/1/1998 - 1/28/2002) 120 96 100 78 80 60 42 41.5 40.8 40 20 0 1998 1999 Price History US:DCX (1/1/1998 - 1/28/2002) 2000 2001 2002 Fig, Daimler-Chrysler s share prices between 1998 and 2002
CULTURAL DIFFERENCES Daimler-Benz Chrysler 1) Corporate Structure Team-oriented structure Hierarchical structure Setting goals, directing & monitoring implementation. known as risk taking underdogs. (Daring, diverse & creating) Management process of planning, organizing & controlling. More conservative, efficient & safe 2) Corporate Culture The driving image & experience associated with highest quality available in market 3) Customer Proposition Attractive eye-catching design at very competitive price High volume, low cost manufacturing & distribution Emphasis on engineering, design, quality and after sales service 4) Value Chain
CONCLUSION Employees in firms that are acquired or merged report lower overall job satisfaction, lower trust in management, and diminished sense of job security. (Gantz-Wiley Research, 2004) A successful merger would required the two companies to abandon their own business culture and create a new distinct one. ( Thomus Stallkamp Former president of Chrysler) Usally, it is extermly difficult to pin point exactly what role culture played in a success or failure. However in the case of Daimler- Chrysler, it would be a safe assumption to say that cultural factor was among the crucial factor which determine the downfall of company.
MY OPINION TO SOLVE THE PROBLEM Should have identified vast cultural differences in the corporate culture of both companies. The leaders of both Daimler-Chrysler should have exhibit cultural sensitivity and emotional intelligence to facilitate the growth of cohesive culture thorough the collaboration of shared meaning and values.
