Mergers and acquisitions take place to realize the synergies between the two or more companies. Why do you think the Daimler- Chrysler merger failed to realize the synergies that were expected from the merger?
If mergers and acquisitions take place to realize the synergies between the two or more companies then Daimler- Chrysler were heading for failure from the beginning itself. The merger was not just between the companies but between two drastically opposite cultural bodies. While Germany was characterized as a society that lays importance to success, money and material possessions and that which feels threatened by ambiguity, the American culture is characterized as individualistic, where people value having a high opportunity for earnings and getting recognition they deserve for a good job. They do not feel threatened by uncertainty. The merger between these two companies was followed by an agreement to let each of their cultures and practices prevail and to manage the new found entity Daimler Chrysler in that manner. The companies failed to address their differences and caused a sense of uncertainty in the minds of employees from both companies. While the Germans think through each and every step involved in decision making and implementation and the Americans lacked the urgency to build that sense of security for themselves. Lack of open communication, corporate cultural clash, inadequate planning, a laid back leadership bench at Chrysler, differences in leadership and management styles and over all organization culture gave room for doubts about their ability to make the merger work. The merger seemed more like an empire building exercise by Juergen Schrempp. Daimler did not look into the facts and figures and draw a map for the future of thenew found company and to a certain extent this ambiguity created havoc. Daimler and Chrysler were each strong players in their market but failed to diffuse their differences and create a company that had the...
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