Examining a Business Failure The Chrysler Group LLC was established from a not so successful merger between Daimler and Chrysler in 1998. It was in 2007 that Damiler sold Chrysler to Cerbus Capital Management. After filing for Chapter 11 bankruptcy, Chrysler Group LLC, formed in 2009 to establish a global strategic alliance with Fiat S.p.A., produces Chrysler, Jeep, Dodge, Ram, Mopar, SRT, and Fiat vehicles and products. With the resources, technology, and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler Group’s culture of innovation, first established by Walter P. Chrysler in 1925, and Fiat’s complementary technology that dates back to its founding in 1899 (Chrysler Group LLC, 2012). This paper will show what organizational behavior theories could have been used to predict the company's failure.
Reasons For The Chrysler Failure A partnership is a mutually beneficial and continual relationship between seller and a buyer. Partners prefer to be based on dependence to each other than to behave as adversaries. Both will lose if any of them would abandon the partnership (Gherasim, 2001). Partnerships came in various forms such as mergers, acquisitions, or joint ventures. A company in trouble may utilize any given one as an option to achieve organizational growth or a global presence. Chrysler's reason for failure was that the partnership began solely on financial and economic information. What was not taken into account with this partnership were the organizational cultures of each organization blending as a cohesive unit. The cultural compatibility was the defining failure of the merger. Daimler-Chrysler did not take into account the need to understand the organizational culture. The organizational culture involves organizational environments and differences between national cultures. Organizational culture is defined as a system of shared meaning held by members who distinguish one organization from other organizations. An organization contains a set of characteristics that the organization values (Rahmati, Darouian, & Ahmadinia, 2012). The failure between Chrysler and Daimler was the total lack of understanding and communication between both parties with regard to the culture, personalities, nationalities, and business systems. Within the span of only two years many of the top American executives of Chrysler had retired, left the company or were fired, and replaced by German employees. The result of American executives leaving the company led to a low morale among the American employees. The low morale of the employees also caused anxiety and low productivity among the employees. The international corporate side of Chrysler as well as the domestic side did not have an equal partnership with regard to the organization. Each partner came to the table with a difference in what each would contribute as well as their perceptions on where the business would go moving forward. These factors also resulted in poor job satisfaction, absenteeism, turnover, and deviant workplace behavior. These organizational behaviors can be explained through different variables of how individuals perceive their environment, culture and what motivates them. Expectations of individuals stem from the trust those individuals have in the organizational system they work within. Managers within an organization should have a clear understanding of what is necessary for their team of employees to accomplish goals set by the organization for the organizations success. The implementation of a strategic plan by the organization should define the objectives and processes that involve evaluations as well as feedback for the employees so that they can understand what they are doing and toward what purpose. This strategic plan will allow the employees to manage their careers and improve upon their strengths and weaknesses; this form of communication should also involve information regarding cultural goals of the organization as well as an incentive rewards program after completion of the performance evaluation. Chrysler was not aware of team performance and how individual equality impact the overall performance of the team. Is important that the organization provide individuals with a trusting environment that makes them feel a sense of fairness from all the members within the organization. The equity of individuals has many aspects, therefore is pertinent to develop an equity plan after fair evaluation of each employee. Chrysler failed to use behavior modeling in inclusion with their evaluation processes. Managers need to use modeling effectively to enhance the achievement of organizational and personal goals. In particular, attention should be given to day-to-day modeling as well as to formal training to effect organizational behavior changes (Taylor, Russ-Eft, & Chan, 2005). Inappropriate behaviors would have been evaluated and been able to have been corrected prior to the behaviors becoming a daily part of the employees routine. Chrysler did not take into account the behavior of their employees to evaluate whether or not the behavior and the standards for improvement performance were in accordance.
Management and Organizational Structure Failures Chrysler failed to utilize a contingency plan that could give the organization alternative forms of action that may be used it if the primary plan(s) did not achieve the organization’s objectives. The managers did not have the knowhow to handle stressful situations without losing the greater vision and goal of the organization. Although Chrysler did not have a contingency plan, after the merger they were resourceful in integrating their board members. The management board was reduced with the final board consisting of eight Germans and five Americans. The merger and reduction of board members created dual lines of authority within the organization. The numerous board members previously may have contributed significantly to the previous failure of the organization.
Conclusion
It is important to have an open minded perspective so as to avoid cultural shock and promote a unified work environment that make it possible to blend two families in a merger. Intercultural communication, behavior modeling, training at all levels and cross-cultural marriage commitment must be present to succeed in mergers with different cultures.