Chrysler chose merger as a strategy in 1998 when it merged w

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?

Solution

Answer:

There are some major reasons to fail:

Firstly, the attitude to hierarchy was quite different. Daimler was a very hierarchical company with a clear chain of command and respect for authority. Chrysler, on the other cultural hand, favoured a more team-oriented and egalitarian approach.

The other cultural difference lay in what the companies valued in terms of their clients. Chrysler valued reliability and achieving the highest levels of quality, while Chrysler was placing its bets on catchy designs and offering their cars for competitive prices.

These two factors resulted in conflicting orders and goals in different departments. American and German managers had different values which drove and directed their work. Different departments were heading in opposing directions.