Daimler And Chrysler Mergers

3028 Words 13 Pages
I. Introduction: The world of business is perhaps the sole determinant of wealth distribution in the global system, being in control of the world's assets and finances and governing the different methods of their usage. Within business, lies the power to influence, change and conquer individuals and nations; this allows businesses a wide range of opportunities to freely expand while ignoring all restraints. Among the most prominent characteristics of business is cooperation; it is exactly that which allows businesses to flourish beyond their geographical and political boundaries. Cooperation in that sense happens in many different methods, in many cases, two companies get together and cooperate in a single instance on a project or a venture. …show more content…
Corporations can choose to merge with other specific corporations for various reasons, notably gaining new grounds to geographical areas to which they have no access or building a successful long-term business relationship with a corporation that is more experienced in a particular field that the former is interested in. In many cases, two corporations can properly identify one another's strengths and weaknesses and decide that it is in their best interest to utilize the strengths of each other, in which case the outcome should be almost always successful. One of the most significant mergers of modern business history is that between the German automobile manufacturer Daimler-Benz and American manufacturer Chrysler. In 1998, Daimler-Benz acquired 92% of Chrysler's shares, in what was then described as a "Merger of Equals". Nonetheless, wide criticism accused the senior management in Chrysler to be manipulating the fact that the merger was actually a Daimler-Benz takeover of Chrysler. Ultimately, the merger proved to be a complete failure, leaving behind a massive loss amounting to about $30 billion; since Daimler paid $38 billion for the merger and later sold Chrysler for $7.4 billion to Cerebrus …show more content…
If it hadn’t been for the cultural corporate gap between the two corporations, employees on both sides would have been able to properly coordinate their efforts in order to achieve better results for the corporation. At which point, this merger would have bred a mega multinational corporation that could have expanded even further into Asia and Eastern Europe. The corporation’s failure to adequately rebrand its products and create a marketable image that represented the results, aspirations and endeavors of the merger left the receiving public at a minimal level of understanding or appreciation of this business venture. The instability created by the merger at first had also scared off investors, which created an obvious drop in the corporation’s stocks. Failure from the administrative side to clarify the situation and assure the investors that the corporation would achieve higher targets was among the reasons that made this drop permanent. There could have been many ways in which these results were to be avoided, most importantly, efforts to bridge the cultural gap between the two companies would have proven to be efficient as they would have helped the employees better understand one another and be more willing to cooperate. This could

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