Merging Across Borders
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- Daimler-Benz
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- Chrysler
In 1998 the German company Daimler-Benz and the American comany Chrysler merged to form DaimlerChrysler. The merger ended up being a failure, with DaimlerChryler’s stock being valued at half of what it had been on the day the merger was announced.
As with my previous blog of the Greek economic crisis, this specified disaster can also be explained through studying the foundations of organizational culture. Daimler-Benz was an extremely hierarchical firm while Chrysler held strong core egalitarian values. When the two companies merged many cases of “infighting” arised directly resulting from the clashing of opposing cultures. The infighting including cases of unethical competition such as use use of internal sabotage or blackmail. Jurgen Schrempp, chair of the merged companies until 2005, admitted that he initially intended for the merger to be a takeover of Chryslers firm, this explains why many American employees were, “slow to trust” German management. The obvious friction between these two cultures eventually led to Daimler selling Chrysler to a private equity firm in 2007.
This example illustrates how important organizational culture is to the creation, success, and ultimately perseverence of any corporation, even those extending beyond national borders.
Resources: Article and Informing Video
