Class Discussion Business

Reading Time: 2 minutes

Chrysler chose merger as a strategy in 1998 when it merged with Daimler, a German automobile manufacturer. This merger was not successful. Why, in your view, did this merger fail?

Textbook:

David, F. R., & David, F. R. (2017). Strategic management: A competitive advantage approach, concepts and cases (16th ed.) [VitalSource Bookshelf version]. Boston, MA: Pearson. Retrieved from https://online.vitalsource.com/#/books/97801341679…

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Please respond to my classmate response below:

The downfall of the Chrysler-Daimler merger did not happen overnight. The scenario played out like a bad B movie where instead of getting into the running car to escape the antagonist, Chrysler cowered behind a bunch of chain saws waiting for the inevitable. It was a culmination of manipulation, lack of cohesiveness, and failure to plan for the future. It was almost as if no one researched statistics, and implemented corrective actions to fix both internal and external factors.

The first reason, manipulation, is due in part because the CEO of Chrysler refused to let someone buy them out. Chrysler did not want a billionaire investor as the face of their company, and instead searched for another company to take control (Mateja, 2007). This describes a person throwing a temper tantrum on a playground, instead of the head of a company trying to do what is best for the company. The second reason, lack of cohesiveness, is more geared toward cultural differences. Neither side wanted to learn how the other worked, or what people were seeking in an automobile (Mateja, 2007). The German automaker did not understand how budget conscious American consumers are, and both companies failed to properly integrate their personnel and management ideals. The third reason for failure, refusing to focus on the future, is seen by both companies that chose not to research the company they were merging with. Instead of looking at all the statistics and analytics each company had, the merger was completed almost overnight (Mateja, 2007). Each organization has a research and development department, and both failed to do any sort of background analysis or view trends that would impact future developments.

References

Mateja, J. (2007, May 15). How Chrysler marriage failed. Retrieved from https://www.chicagotribune.com/news/ct-xpm-2007-05…