A clash of corporate cultures

Date: 2015-10-07; view: 981.

(1) The merger of Chrysler Corp. of the US and Daimler-Benz AG Germany in 1998 created DaimlerChrysler AG, the world's third largest manufacturer of motor vehicles. The aim expressed at the time was to blend their two very different corporate cultures into a new ‘super culture' which drew from both sides: Chrysler had a reputation as a lean and flexible company, leading the way in cost effectiveness, whereas Daimler was more structured and bureaucratic. In reality, the deal was a takeover of Chrysler by Daimler, rather than a merger of equals.

(2) The differences of culture became apparent almost immediately and turned out to be more difficult to overcome than had been anticipated:

· The official language became English, but the Americans found that their German colleagues were more comfortable in German, and often used German in private conversations, which they found unsettling. They also found that without German they could not integrate well at the social level.

· The German managers were formal in their manner and dress, always wearing ties, and addressing colleagues by title and last name, while Americans were accustomed to dressing more casually and addressing each other by first names.

· The American managers found the office environment very different in Stuttgart. Although the summers could be hot, there was no air conditioning, which they took for granted at home. Offices and hallways were a ‘smokers' paradise', which shocked the Americans, who were accustomed to a smoke-free environment. Photos of topless models, common in the German workplace, would amount to a sexual harassment issue in America. Americans found they were always expected to use the company canteen, which even served beer after five o'clock, for those who were working late.

(3) In the end, the incompatibility of management styles was recognized and German culture came to dominate. The key figures in the Chrysler management team had departed within 12 months, leaving Chrysler struggling to deal with a new management team, headed by a German former Mercedes executive, at a time when the competitive environment was particularly difficult. Under the chairmanship of Jurgen Schrempp, Daimler now views Chrysler as a stand-alone division, focusing wholly on the US market. Chrysler, meanwhile, has struggled to replace ageing models and risks losing out in its traditionally strong markets of light trucks and vans. Insiders attribute many of Chrysler's troubles to the failure of the Germans to understand Chrysler culture.

►Question/Answer session:

1. How would you describe the culture clash at DaimlerChrysler?

2. To what extent has it been resolved successfully?

3. What steps should Daimler and Chrysler have taken to avoid frictions and successfully blend their two very different corporate cultures into a new ‘super culture'? Prepare a concise action plan.

4. To what extent does the need to manage cultural diversity differ in (1) a merger with another foreign company and/or (2) the acquisition of a foreign subsidiary?

‘GRAMMAR-1' POINT

►The examples below are taken from ‘Case-2 Point':

1. The official language became English, but the Americans found that their German colleagues were more comfortable in German, and often used German in private conversations, which they found unsettling.

2. German managers were formal in their manner and dress, always wearing ties, and addressing colleagues by title and last name, while Americans were accustomed to dressing more casually and addressing each other by first names.

3. Insiders attribute many of Chrysler's troubles to the failure of the Germans to understand Chrysler culture.

►Translate the examples into Russian and explain:

1. Why is ‘the' used before ‘Americans' and ‘Germans' in the first and third examples respectively, and why is it left out in the second one? What if there was ‘Chinese' or ‘French' instead of ‘Americans' or ‘Germans'?

2. Is it correct to use ‘the' before ‘German' in the first example?

3. What is another way of expressing ‘were accustomed to'?

‘THEORY-4' POINT