When Daimler-Benz acquired Chrysler, the event was to be a “merger of equals.” The merger turned out to be just another unsuccessful car-industry takeover. After Daimler-Benz merged with Chrysler in 1998, the organization has taken the struggling American carmaker to the threshold of recovery three times, only to see the company repeatedly go downhill (Economist, 2007). Although the world is experiencing an economic crisis, Chrysler/Daimler-Benz failed because of organizational structure, leadership, and management decisions. Chrysler
History. Walter P. Chrysler founded Chrysler Corporation on June 6, 1925 when the Maxwell Motor Company was re-organized into the Chrysler Corporation. During the early 1920s Walter Chrysler became the president of Maxwell. The company integrated under the Chrysler name (Wallace, 2009) Chrysler merged with Daimler in 1998. In August 2007, employees had to decide if they were going to remain with Chrysler or Daimler as the divorce of the company took place. Chrysler filed for bankruptcy protection, which was short-lived on April 30, 2009.
The company announced a plan for a partnership with Italian automaker Fiat. If Fiat meets financial and developmental goals for Chrysler Company, Fiat will have the option to increase stake holdings. Current stake holdings are currently at 20% (Wallace, 2009). Contributions of Leadership, Management, and Organizational Structures Leadership. DaimlerChrysler co-Chairman Juergen Schrempp’s leadership fails to retain several key executives including Jim Holden who followed Lutz, Pawley, Theodore, Rushwin, Stallkamp, and Eaton out the door.
The employees quit, retired, or were terminated within two years of Daimlerâ€™s takeover (Snyder, 2009). Many types of leadership exist. One of those leaderships is visionary leadership. Unlike Schrempp, Helmut Panke, former chairman of German automaker BMW, was a visionary leader. Panke became chairman of BMWâ€™s management board and succeeded in making BMW the biggest seller of luxury automobile sellers passing Mercedes.
Panke, as head of strategy, took the once yuppie toy BMW and made the new BMW into a performance luxury car. Had Schrempp believed the same as Panke, maybe Chrysler would have been as successful as BMW. Management. Mercedes never fully accepted Chrysler as a member of Daimler-Benz. The fear of spoilingthe respected German good brand name did not help Chrysler. On the other side of the token, Chrysler’s managers also made mistakes. Chrysler managers kept production high, even as sales slowed down. The discounts offered to move Chrysler stock is what brought about the financial meltdown (Economist, 2007). Effective management skills are always vital to the success of any organization.
Effective managers must have team player skills, the ability to work with people, time management skills, creativity, a talent for solid planning, and a finely honed sense of the situation. Mercedes inability to see the big picture limited the possibility of Chrysler sharing the Mercedesâ€™ reputation. Chrysler managers lacked the talent for solid planning when despite slow sales, they kept production high.
Organizational Structure. During times of economic crisis, it is crucial that leaders have a clear vision for the organization. Leaders also need to take into account the many factors that can influence an organizationâ€™s success. In short, organizations change over time. What happens to the organization, within the organization, and around the organization determine these changes (Rosenberg, 2003).
According to Yuki (2006), organizational behavior offers both challenges and opportunities for managers. It offers specific insights to improve a managerâ€™s people skills. It recognizes differences and helps managers to see the value of workforce diversity and practices that may need to be changed when managing in different countries. As a manager, to create an organizational structure one must encourages employees to work hard and to build helpful work attitudes. Organizational structure enables employees and teams to work together effectively. Organizational Structure affects:
â€¢Behaviorâ€¢Motivationâ€¢Performanceâ€¢Teamwork and cooperationâ€¢Intergroup and Interdepartmental relationshipsWhen an organization determines what the organization wants employees to accomplish, what attitudes employees should possess and develop, and how employees should perform, managers can help develop the organizationâ€™s structure (Organizational Structure, para. 1). Summary
Consumers may ask why Chrysler failed. For decades, Chrysler has been falling short. Although the company had moments of genius, the company never was able to carry this brilliance to the next era. Chrysler also started failing when some of the best left the company.
With the right management, leadership with vision and good management leading with organizational structure, one day Consumers may cheer Chrysler as the automotive underdog. Chrysler will one day show some of the brilliance the company has shown in the past, only this time, carry it to the next era.