Case Study

Topics: Fiat, Chrysler, Sergio Marchionne Pages: 7 (2427 words) Published: May 7, 2013
Case Study 1

Section 1

In Chrysler’s case, the 21st century management principles hindered their downfall and paved a way to regain leverage. Marchionne, who is CEO of Fiat and chief executive at Chrysler effectively, implemented various management strategies to lift Chrysler out of bankruptcy. By setting objectives for the company and working through and with others Chrysler was able to move in the right direction. Marchionne came into an unsettling situation taking a huge risk. Quick decisions and changes had to be made in order for progress to be made.

The first move by Marchionne was to look to the people of the company. He understood that his best source of competitive advantage was the employees and that he had to reach out to them before any other moves could be made to show the people he meant business and needed their help Marchionne moved his office all the way to the 4th floor from the executive tower. He was destroying the hierarchal system of power and being more hands on with workers of the company. Being on the same floor as the engineers and executives made decision-making more direct and fairly quicker (Boudette, 2009). Employees of the company took note to this move as one showing that everyone has importance in the company by using the management principles of the 21st century Marchionne effectively changed the atmosphere of the company. Everyone ones involvement was increased, even seen in the applicant interview process. Marchionne met with every executive to discuss opinions of every applicant. Every worker in the company was in unison so Chrysler only wanted to bring people on board who were on the same page as everyone.

Marchionne gradually changed Chrysler’s culture in every aspect. Change was evident because the culture being practiced before the arrival of Marchionne led to bankruptcy. Marchionne provided reasonable pressure for goal accomplishment through example. Working seven days a week while switching through five blackberries. He not only changed small tendencies, but tendencies that were around from the start of Chrysler. He stopped culture of slashing prices when sales fall, in other words “ giving away margin (Berman, 2011). He showed his sternness on this issue when he let go an executive who decided to use rebates as an incentive to customers. This injected an element of fear into the ranks of the company that stopped employees from getting too comfortable.

By doing all this Marchionne’s vision was clear. Everyone in the company knew in which direction Chrysler wanted to head. By clarifying objectives and goals, changing the culture, Marchionne could now enact his plan to bring Chrysler back up. Marchionne had a five-year plan just six months after joining Chrysler, which looked to start gaining profits two years in. With Fiat and Chrysler working together to make small cars, which appealed to the public many profits, were to be made. Marchionne also took the necessary risk, which a 21st century manger should. His advertising scheme involved rap star Eminem who made his Chrysler debut during a super bowl commercial. If the goal of the company wasn’t as clear the interpretation could have gone astray, but Chrysler and Marchionne were so clear on intentions that the commercial was well accepted.

Section 2 #2
The culture, which has developed at Chrysler, has been its point of success. Everyone who is involved with the company shares the same set of values and beliefs, which underlines the company’s identity. Using multiple functions of organizational culture Chrysler has reaped the benefits, which it could not obtain before the merger with Fiat. The merger with Fiat and introduction to Marchionne, the new CEO brought a new hope and urgency within the company serving as a call to change.

Marchionne knew there was no time to waste and made direct changes as soon as he stepped in. He looked to the physical space as the first step in changing the company’s culture,...
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