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Global Communications Benchmarking: Study of Daimler Chrysler and a Large European Bank Research Paper

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Updated: Sep 19th, 2021

Management and Communication problems in a Daimler and Chrysler

Issue identified in the scenario that is also facing the company

The merger between Daimler and Chrysler was designed to create a complex multinational automobile manufacturer with a market worth of more than $130 billion. The merger between Daimler Chrysler had many issues and the main ones related to the ego of Benz which regarded itself as the dominant partner and persisted in enforcing its management models as a form of right. This very much hurt Chrysler, which was at a financial disadvantage. There were also problems with workers unions in both plants who feared that jobs would be lost. The pay of German workers was lower than that of US-based Chrysler. The Germans demanded parity in pay and wanted a substantial hike in the salary while the Americans were not ready to accept any salary cuts. (Schulten Thorsten, 1998). Another problem was with Kirk Kerkorian who was the single largest private shareholder in Chrysler Corporation and had bought a 10% stake in 1990 in Chrysler and this grew to more than 15%. He had made a hostile bid for Chrysler which was fought by the management and he now claimed that he had lost billions (Kerkorian, 2007).

How the company applied the concepts in response to the issue

The management attempted to provide some solutions to the wide issues that were reported. They were successful in solving the immediate problems but unfortunately, the issues were so widespread that the solutions could not help to ride the company over. Certain changes were made and bonuses paid to the Daimler staff and the options are given to the Chrysler staff disappeared when the merger came into effect (Orr Deborah, 1999). An effort was made in mixing and integrating the two business models of the company and training was given in accepting change management. (Sandoz, 2002). Kerkorian was persuaded to accept an offer for the shares without being given a place on the board. (Hawranek Dietmar, 2007).

Outcomes of the company’s response to the issue

Daimler had reportedly spent 36billion USD to acquire Chrysler. With steeply falling sales, Chrysler is worth only about 14 billion dollars and it has a pension and health liability of 12 billion USD. Daimler wants to sell the company and is reportedly seeking buyers (Hawranek Dietmar, 2007). With current trends in outsourcing to reduce costs, more than 13,000 jobs were cut and the workers retrenched. The remaining workers were forced to accept wage cuts and reductions in pensions and benefits. This was a lose-lose situation for all parties.

Management and Communication problems in a Large European Bank

Darling (Darling 1999) has reported a conflict and change management case that happened in ABN AMRO, a large European bank. New systems such as banking services had been introduced, the banking processes had been streamline and many new people from different ethnic groups had been hired. The international market development had also shown good growth and the bank could be regarded as healthy. The General Manager for Operations had made some important decisions, which affected several employees in a significant fashion. These employees had not been consulted nor advised of the changes until the modifications had been accomplished. The GM was accused of being authoritarian, uncommunicative, and narrow-vision. The Chairman found himself as a primary intermediary in a situation involving major organizational conflict.

How the company applied the concepts in response to the issue

Darling (Darling 1999) has reported that the Chairman and the GM had discussions about how to handle the dissatisfaction. Giving up the changes that were implemented and going back to previous systems were not acceptable financially and strategically. They decided to have face-to-face meetings and find out what the real issues were and how justified the employees were in rejecting the changes. In the meetings, certain alternatives were proposed. In some instances, the alternatives proved beneficial over the actual changes that were implemented. In a few cases, the alternatives were found to have a negative impact and this was pointed out to the dissenting members, and other alternatives were suggested and accepted.

Outcomes of the company’s response to the issue

The whole exercise had in effect made the employees and the management more receptive to each other’s needs and helped the bank to grow further. The sessions helped to create a proper atmosphere for mutual agreements to be implemented. The decision moved away from a win-lose situation to a win-win situation. Employees became more open when they realized the impact of the solutions and how it was important for the bank to survive and were ready to accept the suggestions. They also offered some suggestions on the remodeling of the work processes and were ready to accept the changes. The bank rethought the suggestions offered by the employees and where possible implemented the solutions. As a result, the bank benefited by having willing and cooperative employees and was able to ensure higher customer satisfaction.

References

Darling John. R, Fogliasso Christine. E. 1999. Conflict management across cultural boundaries: a case analysis from a multinational bank. Journal of European Business Review. Volume 99. No. 6. pp. 383-392.

Kerkorian. 2007. : BBC International News.

Orr Deborah. 1999. Safe haven. Forbes New York. Volume 163. Issue 10. pp. 207.

Sandoz Paul Strebel. 2002. Cross-Border Lessons from the DaimlerChrysler Merger. Perspectives for Managers: International Institute for Management Development. 2007. Web.

Schulten Thorsten. 1998. Industrial relations aspects of the Daimler-Chrysler merger: European Industrial Relations Observatory on-line. 2007. Web.

Waller David. 2001. Wheels on Fire: The Amazing Inside Story of the Daimler Chrysler Merger. London: Hodder & Stoughton.

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IvyPanda. "Global Communications Benchmarking: Study of Daimler Chrysler and a Large European Bank." September 19, 2021. https://ivypanda.com/essays/global-communications-benchmarking-study-of-daimler-chrysler-and-a-large-european-bank/.

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IvyPanda. 2021. "Global Communications Benchmarking: Study of Daimler Chrysler and a Large European Bank." September 19, 2021. https://ivypanda.com/essays/global-communications-benchmarking-study-of-daimler-chrysler-and-a-large-european-bank/.

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IvyPanda. (2021) 'Global Communications Benchmarking: Study of Daimler Chrysler and a Large European Bank'. 19 September.

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