Failed Merger of Daimlerchrysler
Executive Summary
This case study is on the topic ‘DaimlerChrysler-Knowledge Management (KM) Strategy’ from the Harvard Business School case studies. Principally, this case is based on the merger of Daimler, a German automobile company and Chrysler of the USA. We will analyse the KM related issues faced by the company in the post-merger period. These issues include implementation of KM, mismanagement, cultural differences, individual people barriers, etc. Furthermore, there are solutions and also recommendations given as to what the management could have done to save the company from de-merging. Introduction
Knowledge Management (KM) is a field which is being accepted, taught and practiced in academic institutions as well as organisations. As this is the era of Globalisation, KM has gained importance and is being practiced by almost all successful companies. In fact, it is even offered as a core subject in educational institutions. So, what exactly is KM? “KM draws from existing resources that your organisation may already have in place-good information systems management, organisational change management, and human resource management practices.” (Davenport and Prusak 1998) This definition is an integrated definition of KM and is focused on the integration of information systems and human resources.
The case being studied is the merger of the United States automobile company Chrysler and Daimler of Germany. Merger, in general means the unification of two or more companies for certain agreed upon reasons. These two companies merged in 1998. Mr. Jurgen Schrempp was the CEO of German auto giant, Daimler Benz. Schrempp was the man who was the originator of the idea of Daimler’s merger with Chrysler in 1998. He guided the company from massive losses in the mid 1990s to a successful company later. The merger was termed as the ‘merger of equals’ by Mr. Schrempp and also CEO of Chrysler, Mr. Bob Eaton. The reasons for the merger were different for both the
This case study is on the topic ‘DaimlerChrysler-Knowledge Management (KM) Strategy’ from the Harvard Business School case studies. Principally, this case is based on the merger of Daimler, a German automobile company and Chrysler of the USA. We will analyse the KM related issues faced by the company in the post-merger period. These issues include implementation of KM, mismanagement, cultural differences, individual people barriers, etc. Furthermore, there are solutions and also recommendations given as to what the management could have done to save the company from de-merging. Introduction
Knowledge Management (KM) is a field which is being accepted, taught and practiced in academic institutions as well as organisations. As this is the era of Globalisation, KM has gained importance and is being practiced by almost all successful companies. In fact, it is even offered as a core subject in educational institutions. So, what exactly is KM? “KM draws from existing resources that your organisation may already have in place-good information systems management, organisational change management, and human resource management practices.” (Davenport and Prusak 1998) This definition is an integrated definition of KM and is focused on the integration of information systems and human resources.
The case being studied is the merger of the United States automobile company Chrysler and Daimler of Germany. Merger, in general means the unification of two or more companies for certain agreed upon reasons. These two companies merged in 1998. Mr. Jurgen Schrempp was the CEO of German auto giant, Daimler Benz. Schrempp was the man who was the originator of the idea of Daimler’s merger with Chrysler in 1998. He guided the company from massive losses in the mid 1990s to a successful company later. The merger was termed as the ‘merger of equals’ by Mr. Schrempp and also CEO of Chrysler, Mr. Bob Eaton. The reasons for the merger were different for both the
References: Ansoff, I. H. & McDonnell, E. J. (1990) ‘Implementing Strategic Management’ in A. Jashapara (ed.), Knowledge Management: An Integrated Approach, Harlow, Prentice-Hall, pg. 215 Davenport, T.H. & Prusak, L. (1998) Working Knowledge: How Organisations Manage What They Know, Boston, Harvard Business School Press Gersten, M.C., Soderberg, A-M & Jens, E.T. (1998) Cutural Dimension of International Mergers and Acquisitions, Berlin, Walter De Gruyter Gibney, F. (1999) ‘Daimler-Benz and Chrysler merge to DaimlerChrysler’, Time Magazine, 24th May 1999 Kotter, J. P. & Schlesinger, L. A. (1979) ‘Choosing Strategies for Change’ in A. Jashapara (ed.), Knowledge Management: An Integrated Approach, Harlow, Prentice-Hall, pg. 217 Ross, P. (2007a) Knowledge Management 7009IBA (Week 4, 16-17 August), GBS Seminar, Griffith University, pg.1 Ross, P. (2007b) Knowledge Management 7009IBA (Week 10, 04-05 October), GBS Seminar, Griffith University, pg.3 Shelton, C. D., Hall, R. F., & Darling, J. R. (2003) ‘When Cultures Collide: The Challenge of Global Integration’, European Business Review, 15(5): 313 Times Online (2007) ‘DaimlerChrysler Marriage on the Rocks’, Times Online, (15/02/2007), http://business.timesonline.co.uk/tol/business/columnists/article1386969.ece