Case Study: DaimlerChrysler

Post-Merger Integration (A)

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 Qus.1 Why organizations go for strategic
alliances, including mergers, acquisitions and
joint ventures?

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There is a tremendous allure to M&A. Its the big play, the dramatic gesture. With the stroke of a pen,
you can add billions to size, get a front-page story and create excitement in the market.
(Michael Porter)

Real drivers or Motives of M&A

Projected reasons
Quest for bigness
Increase shareholders value Economies of scale
Gain competitive advantage Globalization
Tit for tat Distribution channels
Globalization Access to new products and Technology
Gain access to new products and new technologies Enhance or increase products /services
Increase market share or access to new market Increase market share/access to new markets
Diversification

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 Qus.2 What issues the merged entity
(DaimlerChrysler AG) faced in the post-
integration stage?

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 Partner Assessment
Pre merger/ Due diligence Phase
Courtship (4 months)
Develop shared vision and objectives
Build business and personal relationships
Evaluation/negotiation (4months-1 year)
Regulatory clearance
Price and terms

Integration
Managers working jointly on integration plans
Rapid implementation phase
Continued assessment of progress and adjustment on the integration plan

Post merger
Immediate transition (3- 6 months)
New appointments
Redundancy announcements
divestment
Transition (6months- 2 years)
Fine tuning
Further restructuring
Job transfers
Cultural integration
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Pre-Merger Issues Post- Merger Issues

Due diligence Hard Issues Soft Issues

that does not Brand Separation Poor HR role
properly Lack of integration
accounted for Poor integration of : of HR practices
integrations Manufacturing Acculturation stress
Procurement
Communication
gap
Information Lack of team
Technology building and
management
and oversight
Finance Poorly handled
department talent management

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Qus.3 What possible change management
initiatives are suggested in this case?

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 Integration of HR practices (recruitment, HR
planning, compensation, competency
training)
Training at all levels
Internal and external communication
initiatives
Cultural assimilation

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 Culture

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 Determining organizational blueprint;
Identifying top management teams, middle level
management teams and change agents, representing both the
organizations;
Identifying the core competence and job profile needed in
the new context;
Developing job description, job families, and new roles;
Determining talent management and retention strategies;
Providing relevant trainings at different stages;
Determining the new organizational culture;
Developing communications strategy and plan; and
Reconciling disparate HR policies, compensation and
benefits programs of the two merging entities.
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Change Training Initiatives
1. Cross- cultural Training
2. Technical- skills Training
3. Emotional Training

Training across levels

1. Training to employees
2. Training to senior executives
3. Training to HR managers

Contingent Training Methods

1. Competency Development Training
2. Conflict Resolution Training
3. Stress Management Training
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 Four considerations in any communication plan-
Audience
Timing
Mode
Message

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Dr. Anjali Bansal (MICA): All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.