Managing Organisational Behaviour Daimlerchrysler

Table of Contents

1.0 Introduction        2

2.0 Organisational failures        2

2.1 Organisational culture clash        2

2.2 Employee turnover        3

3.0 Organisational behaviour issues        4

3.1 Organisational culture clash mismanagement        4

3.2 Poor communication in organisational change        6

3.3 SWOT analysis        9

4.0 Organisation crisis management strategies        10

4.1 DaimlerChrysler approaches        10

4.2 Recommendations        11

5.0 References        12

6.0 Appendices        14

Appendix A - Share price history: Chrysler 1998-2002        14

Appendix B – Comparison of Daimler and Chrysler culture        15

Individual Case Study Report

1.0 Introduction

This report is going to carry out a study of the merger failure of DaimlerChrysler. Daimler is a Germany motor car company manufacturing luxury vehicles for high-class buyers. Chrysler Corporation is an American motor car company manufacturing cost-effective vehicles for middle to low-class buyers. Daimler’s former CEO Schrempp and Chrysler’s former CEO Eaton saw the benefits of combining their businesses. So they agreed to implement the merger project based on the consensus of “merger of equals” in year 1998. After the project started, several crucial organisational culture conflicts and communication issues aroused and caused the merger to fail. After the merger, Chrysler’s staff turnover increased and share value dropped. The merger did not bring competitive advantages to DaimlerChrysler, it also adversely affected the relationship between two companies.

This report will study the merger failure of DaimlerChrysler, and then provide an analysis on the organisational issues that have caused the failure.  Specifically, this report will focus on the culture clash mismanagement issue and the poor communication issue in organisational change.  Theories will be used to justify how these organisational behaviour issues have led to the merger failure. Finally, some practical recommendations will be given.

2.0 Organisational failures

This section will describe two failures of DaimlerChrysler merger, they are organisational culture clash and employee turnover. It will also explain the consequences of the failures to illustrate how they have adversely influenced DaimlerChrysler.