The Impact Of Cultural Differences On Cross Border Mergers At The Example Of Daimlerchrysler

Inhaltsangabe:Abstract: In the last decade many companies on a global basis are going international in order to become global players. The opening of global markets (e.g. the establishment of the Single European Market and the ratification of the Maastricht Treaty in 1992) was a key driver for international mergers and acquisitions. Companies form international mergers and acquisitions to achieve the competitive position of global advantage and local responsiveness as well as to grow rapidly. Mergers create synergies for all involved companies as various tangible and intangible assets will be combined whose value is greater than the sum of their individual worth. Additional factors of production offering competitive advantage can be found. Employees play an essential role for the success of merging companies, therefore it is crucial already to deal with cultural aspects as a component of the due diligence process. This creates an understanding of different national and organizational cultures for all involved cross-border merging companies. The national culture is an integral part of the overall corporate culture of the firm, which is applicable for all merging partners. The merger of DaimlerChrysler in 1998 which created one of the biggest car companies is used as an example in this study to underline cultural implications within the merging process of global players. Cultural difficulties occurred between the more easy-going and more flexible style of Chrysler and the well structured and bureaucratic style of Daimler-Benz. This was the basis of different working styles, decision making and communication processes within the company. This incompatibility of the two different cultural aspects was realized too late and became very difficult to be overcome. That is why at the end it was no merger of equals but one company dominating over the other. The complexity of the DaimlerChrysler merger shows the different aspects of cultural difference awareness. The reader of this study will get a deeper insight into the issues of culture and its importance to be considered in cross-border merger processes. In this context further different national culture models will be analysed as well as the cultural implementation into organisations in general. Furthermore after presenting the merger process of DaimlerChrysler and its reasons, failures in management and cultural implementation by both companies will be discovered which caused the cultural [...]

Research Paper (undergraduate) from the year 2010 in the subject Organisation and Administration, grade: 1,7, Northumbria University, language: English, abstract: The Merger of DaimlerChrysler in 1998 is regarded to be the biggest merger in the automotive industry. In academic literature there is consensus about the fact that cultural issues had a major impact on the merger's failure. Bearing in mind the importance of organisational culture on the success of M&A, this study aims to provide an in-depth analysis of the famous DaimlerChrysler merger. The researcher will reveal the organisations' cultural issues which arose during and after the merger and she will explain the impact of these issues on different organisational levels. The analysis will be conducted with the help of the theoretical frameworks of Schein (1984) and Hofstede (2001). Findings show that cultural differences have had an impact throughout all organisational levels. Due to this finding it is concluded that the merger was about to fail from the beginning on.

Essay from the year 2020 in the subject Business economics - Business Management, Corporate Governance, grade: 75%, The University of York, course: Cross-Cultural Managemnet & Negotiation, language: English, abstract: The automotive industry has been facing increasing problems over the last years and COVID-19 accelerated the situation. Changes in the industry are challenging the automotive manufacturers to defend their position and adapt to constantly changing conditions. Some manufacturers, such as PSA and FiatChrysler already announced mergers to be jointly successful in the future (European Commission, 2020). Since Chrysler was part of several M&A activities, it is interesting to take a look at past Chrysler mergers and consider which factors regarding cross-cultural management influenced the merger outcome. The example of the DaimlerChrysler merger will be used for this purpose in order to analyse the merger towards cultural differences and behaviour of both parties under consideration of cross-cultural management theory which had an influence on the failure of the merger by means of Hofstede’s cultural dimensions.

Master's Thesis from the year 2008 in the subject Business economics - General, grade: 71 % - A, University of Newcastle, language: English, abstract: There is a high failure rate in cross-border M&A. Many of them fail due to cultural differences of the combining organisations. This study examines the role of culture in cross-border M&A regarding national and organisational culture among other factors that are important for a successful integration strategy in M&A across borders. The factors discussed are based on empirical findings, and on literature that in the analysis, proved to corroborate the findings of the primary data, or insights based on these findings. Since many authors comply with DaimlerChrysler having failed because of two heterogeneously organisational cultures and different management styles trying to combine into a new culture, this topic was of special interest of the researcher. DaimlerChrysler is being used as a case study approach in this research to find out how important the role of culture in cross-border M&A is. Furthermore, it has been observed, that the controversial evidence in the literature if many cross-border M&A fail due to cultural differences is of interest concerning the research objectives and the literature revealed that in this area little research is done so far. Therefore, one objective of this research is to fill the gap in the literature regarding national and organisational culture when integrating one firm with another or by forming an entirely new one in cross-border M&A The analysis of primary data in form of semi-structured interviews has uncovered that the cause of the cultural differences is not always apparent and ignored particularly in business. However, cultural differences are not the only cause for cross-border M&A failure as there are other important factors to take into account.

Seminar paper from the year 2006 in the subject Business economics - Business Management, Corporate Governance, grade: 1,0, California State University, Fullerton, course: International Management, language: English, abstract: On 6 May 1998, Daimler-Benz of Germany signed a merger agreement with Chrysler Corporation of the United States. The merger marked the beginning of the ambitious goal of merging two styles of auto-making, two approaches to business and the proud, but distinct cultures of two nations. The opportunities for significant synergies afforded by a combination based on factors such as shared technologies, distribution, purchasing and know-how. Daimler’s engineering skill and technological advances could be complemented by Chrysler’s skills for innovation, speed in product development and bold marketing style. Juergen Schrempp, CEO of DaimlerChrysler, said, that the new company will reach an eminent strategic position in the global marketplace by combining and utilizing each other’s strengths. It seems that Germans and Americans in the enterprise have not become closer since the merger. This paper explores the reasons for DaimlerChrysler's failure to realize the synergies identified prior to the merger. It examines the different culture and management styles of the companies that were primarily responsible for this failure. The focus will be on the cultural issues and on the different theories that try to explain cultural differences between nations – the US and Germany - and how values in the workplace are influenced by those cultures. First of all it describes the overall circumstances that led to the merger. Both companies and their conditions prior to the merger are introduced as well as the general objectives that led to the merger and the goals of it are highlighted. After that, some of the theories that try to explain cultural differences such as the Cultural Dimensions of Hofstede are introduced with a special focus on the differences between the two cultures in play, the German and the US. It will proceed with an analysis of the different corporate cultures and the accompanying communication difficulties and mistakes that have been done in this context. The paper will conclude with recent developments, the current situation of DaimlerChrysler and some recommendations to work on the existing cultural issues and other problems within the merged company.

Seminar paper from the year 2016 in the subject Business economics - Business Management, Corporate Governance, grade: 1,2, University Witten/Herdecke, language: English, abstract: In times of globalisation, mergers and acquisitions (M&A) are an important and common tool for companies in order to expand their operations as well as to face changing market conditions and increased competition. Over the past three decades, M&A have therefore become a truly global phenomenon: While in 1985 there were only 2,675 M&A transactions worth 347 billion USD, there were more than 46,000 global transactions, worth more than 4.5 trillion USD in 2015. In comparison to 2014, the number of deals increased marginally by 2.7 percent in 2015, while the value of the transactions grew by 16 percent. Nevertheless, and despite the increasing popularity of M&A transaction worldwide, several studies yield that mergers actually have a high rate of failure. Depending on whose research results one relies on, the failure of M&A-deals varies between 60 and 75 percent. In this context, it should however be distinguished between the failure of creating any business benefit (especially shareholder value) and the total failure of the merger (and a segregation afterwards, as e.g. Daimler-Chrysler did) which most likely will be a much lower percentage. As one recent study found out, culture has been identified to be the cause of 30 percent of failed integrations. These cultural differences between the merging companies become even more important in cross-border mergers where people from different cultural groups with different opinions, attitudes and values interact with each other. Although it is known that culture plays a key role in the integration process and therefore also for the success of the whole merger, it is often given relatively little attention to by the managers. After building a theoretical background on M&A and organizational culture, the paper will focus on the role of culture in a

Bachelor Thesis from the year 2018 in the subject Business economics - Business Management, Corporate Governance, grade: 1,3, Berlin School of Economics and Law, language: English, abstract: What are the critical success factors in CBM&A activities? What are the obstacles to and facilitators of a successful cultural integration in CBM&A activities? Which actions need to be taken to successfully manage cultural integration processes during CBM&A activities? This thesis will aim to answer these three research questions. Consequently, the research conducted aims to create an elaborate understanding for one of the most cited reasons of CBM&A failure, cultural integration, and to answer the research questions by developing a concrete action plan. This shall be approached by firstly outlining a brief overview of M&A theory before addressing special aspects of CBM&As in chapter 2. The second chapter will be concluded by explaining the complexity of culture and establishing a selection of empirically proven approaches on assessing culture. Subsequently, chapter 3 will focus on the decision factors which determine integration approaches before cultural integration models will be more narrowly outlined. Chapter 3 will then highlight the critical factors influencing cultural integration in more detail and start elaborating on how the evolving problems related to cultural integration can be encountered. In chapter 4, the research approach and methods will be explained in detail before the fifth chapter will highlight the key findings of the empirical analysis. Chapter 5 will then discuss the research findings and develop an action plan to show managerial implications on how to successfully manage cultural integration. Lastly, chapter 6 will summarize the findings of this thesis and illustrate the limitations of the research, before outlining starting points for future research.

Seminar paper from the year 2008 in the subject Business economics - Business Management, Corporate Governance, grade: 1,0, Hamburg University of Applied Sciences (Wirtschaft / AIM), course: AIM Aussenwirtschaft und Internationales Management Seminar 7. Semester HAW Hamburg, language: English, abstract: The following paper deals with the topic “Cultural Due Diligence and Cultural Clash” using the example of Daimler and Chrysler’s merger in 1998. The paper is therefore dealing with the corporate culture in a company and the importance of its consideration. It will define corporate culture and illustrate different views of measuring it and looking at it. Further a closer look on Daimler’s and Chrysler’s corporate culture will be given and the challenge of merging these two cultures will be clarified. This paper is going to accentuate the need for a Cultural Due Diligence and familiarize the whole process of it. It will therefore prove that the analyses of a company’s cooperate culture with the Cultural Due Diligence is majorly important in order to successfully merge two companies. In detail the term paper therefore indicate tools that are being used to get to know the culture of a company and introduce theoretical as well as practical approaches. Whenever it is possible a connection to DaimlerChrysler and their Cultural Due Diligence is given. An analyze why DaimlerChrysler’s merger failed to realize the synergies will be given in the last chapter and are being underlined with statements of personalities that have been involved in the merger process or that were engaged in the fusion.

Seminar paper from the year 2014 in the subject Communications - Intercultural Communication, grade: 1,0, Warsaw School of Economics, course: Global Management Practice, language: English, abstract: The number of global corporations has grown in the last few decades. The advent of technology and fliberalization of political and regulatory barriers enables companies to operate their business internationally. There are less moving barriers between different countries, more common worldwide laws, less barriers in monetary transaction and fewer geographic distances. However, very often companies fail in acquisition, foreign direct investments and cross-border partnerships because their global strategies are not proper enough, or the execution is more complex as expected. This paper deals with BenQ`s failure of acquiring of Siemens mobile devices. During the acquisition, parties face different challenges like market, technology and how to allocate budget, but in this case the biggest challenge was cultural interchange. This report analyzes cultural differences of both countries in which these companies are located based on Hofstede`s cultural dimensions. This particular acquisition is an appropriate example of why some intercultural mergers don’t work because of big differences in national, organizational and professional culture.