Daimler Chrysler Merger Analysis

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  • Topic: Daimler AG, Automobile, Chrysler
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|Organizational Behavior | |DaimlerChrysler | |The case study of a historical merger, between two automobiles manufacturers, which was being branded as ‘match | |made in heaven’. This report analyses the root-causes, actual facts and an insight to the corporate culture |

|Raja Naveed Khalid BD-32/2010 | |M Tauseef ur Rahman BD-28/2010 | |Khan Raid Altaf BD-15/2010 | |Syed Moazzam Ali Pasha BD-43/2010 |

Case Background3

Case Analysis3

The History3

Cultural Heritage3

Social Differences3

Living Standard4

The ‘Domination’ Factor4

Geographical Distance4

Organizational Structure4

Job Insecurity4

Merger or Acquisition4

The Communication Gap5

Solution – Redesigning DaimlerChrysler Strategy5


Mission Statement6

Establishing Strategies6

Bridging the Communication Gap6

Cultural Differences6


Organizational Structure6

Who Owns Who6

Implementing the Strategy7


Case Background

Daimler, a German car manufacturer, was the thirteenth-largest car manufacturer and second-largest truck manufacturer in the world. Chrysler on the other hand was one of the largest automobile companies in USA, North America, in particular. This case gives us an insight into the world’s most anticipated merger in the automobile’s industry which was predicted to turn the automobile industry upside down and being branded as the ‘match made in heaven’ by the German CEO who dreamed of conquering the American automobile industry through this merger. With everything configured and all systems in place, both leaders proceeded with the merger and the rising sun of winter 1998 pronounced the Daimler and Chrysler hereby as ‘DaimlerChrysler’.

During the setup, strategy and business planning, every single detail was worked out however both sides perhaps ignored the most important and sensitive element called ‘Human’, the bones of any corporate skeleton which later on become the major factor in the demerger of the DaimlerChrysler.

Case Analysis

The case review tells a lot of stories and issues running in parallel and in fact all the problems are interconnected and little things collectively made up a huge issue which later on proved the ‘perfect match’ as indeed a mismatch. We will discuss all the issues in details and cover them one by one:

The History

The major issue between the employees of Daimler and Chrysler or both parties was the ‘history’, which was full of retaliation, vengeance and revenge. Both countries were involved in blood-shedding battles and had a grudge for each other and this factor was something completely beyond the German and American CEO. They could have encouraged and driven the employees towards a common goal but can’t alter their feelings for each other.

Cultural Heritage

Both companies share a different heritage of culture which was in fact a modern shape of their countries’ respective histories. German had always been in war were used to live in more sort of dictatorship hence they were very disciplined and set of rules towards everything they do and this could have been easily observed in Daimler’s hierarchy and chain of commands.

Whilst Chrysler employees had a very laid-back attitude towards corporate environment, they were very casual and rough with an open environment truly reflecting the American culture which was unacceptable by the...
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