What options should Tom Stallkamp consider in response to the following exchange with Jürgen Schrempp, and which option would you recommend?
Why? “Here’s what we’re going to do,” Schrempp said. “You stay close to me. Call me whenever you want. Don’t worry about going through Bob Eaton, and all that kind of stuff.” Stallkamp felt intensely uncomfortable with the idea of circumventing Eaton.
How did cultural differences between the two companies impact the ability to achieve the benefits and savings (see Exhibits 2 & 4) and the overall success of the merger?
The United States of America is located on the continent of America. On the contrary, Germany is from the continent of Europe. Also, the two countries have diverse cultures in the social and economic sectors. For example, in-car manufacturing industry Germany is known for providing high–end vehicles while the United States is economical for citizens. Mercedes Benz vehicles require a high cost of production as compared to Chrysler vehicles. Thus, in the text, the two companies played a fundamental role in merging the different cultures to achieve the partnership target.
First, because of the contrary vehicle brands, Chrysler President Tom Stallkamp emphasized the need for separate marketing of vehicles in the sales department. After all, a company’s success is determined by the protection of revenue and generate growth (Bekier et al.10). Therefore, Chrysler’s president did not only play a fundamental role by preventing a conflict of interest but ensuring the development of Daimler Chrysler AG. The two companies ensured that each car brand had diverse human resources in the entering sector to ensure success in the distinctive brands. Moreover, the success of the culture of the United States in the knowledge of marketing was shared with Daimler Benz. For instance, the United States had a vast market in North America. Thus, the growth of the company was attributed to the concentration of potential markets. Above all, personal commitment is a crucial strategy for a merger to work effectively (Ghemawat et al.6). In the coalition of Daimler Benz and Chrysler vehicles, both stakeholders’ worked tirelessly to ensure success in all sectors.
Furthermore, the cultural differences between
Exhibit 4 indicates the areas where synergies were expected. Achieving these synergies
Required a focused effort to integrate the necessary functions quickly. Stallkamp knew
They had to deliver on the promised synergies, but the significant savings would come from the
Combination of back-office functions and the streamlining of systems and processes. He
I envisioned separate marketing and sales to ensure brand integrity. On the operational side,
he saw numerous opportunities for significant savings. A more strategically focused R&D
process would help drive technology transition. The sharing of design expertise
from Chrysler would keep DaimlerChrysler at the forefront of innovation. A single
manufacturing organization with separate plants would provide for the transfer of crucial
manufacturing process technologies and systems. DaimlerChrysler could leverage its unit
volume to achieve additional savings and streamline its systems. Bringing this vision to
reality, however, was a formidable challenge. Chrysler and Daimler-Benz had very
different ways of operating. Getting both sides to see the benefit of running in a new
method was critical to the success of integr
Works cited
Bekier, Matthias M., Anna J. Bogardus, and Tim Oldham. “Why mergers fail.” The McKinsey Quarterly (2001): 6-6.
Gavetti, Giovanni. “Strategy formulation and inertia.” Harvard Business Review (2005).
Ghemawat, Pankaj, and Fariborz Ghadar. “The dubious logic of global megamergers.” Harvard Business Review 78.4 (2000): 64-74.