The Daimler-Chrysler Merger

Topics: Daimler AG, Chrysler, Automotive industry Pages: 3 (1109 words) Published: May 4, 2008
The past two decades have been characterized as a merger mania time. A lot of consolidations have occurred. Nevertheless, these mergers have failed to achieve the expected results. In general, the financial track record of recent mergers is, in fact, immeasurable. It appears that the proposed efficiencies of scale often do not materialize, but the merger boom continues and globalization is a contributing factor. However, the cultural, political, psychological and geographical improvements of cross-cultural integration have been tremendous. The objective of this research is to analyze the full cultural scope of the much-publicized DaimlerChrysler merger and their subsequent experience. DaimlerChrysler AG is a major automobile and truck manufacturer and financial services provider (through DaimlerChrysler Financial Services). The company also owns a major stake in aerospace group EADS. DaimlerChrysler was formed in 1998 by the merger of Daimler-Benz, the manufacturer of Mercedes-Benz (Germany), and the Chrysler Corporation (USA). The transaction was announced on May 7, and took place on November 12. The Chrysler Group (Chrysler, Jeep and Dodge) also provides its customers with parts and accessories marketed under the Mopar brand name. The cross-border companies are notoriously difficult to get right because, in addition to the standard integration issues, there are also cross-cultural challenges. At DaimlerChrysler, differences in compensation systems and decision-making processes caused friction between senior management, while lower level employees fought over issues such as dress code, working hours and smoking on the job. Language also became an issue. While most managers on the Daimler side could speak some English, not all were able to do so with the fluency needed for effective working relationships. Also, only a few Chrysler managers had any knowledge of the German language. I believe there is always going to be cultural barrier between MNC with different...
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