What are the problems encountered by e-tailers? How has Amazon.com succeeded to deal with these problems?

Amazon.com: The world’s largest B2C e-store [Source: Adapted from Turban et al. (2012) pp. 134-135] The opportunity Amazon.com reported that its annual profit for 2008 had doubled from 2007, with a 41 percent revenue increase, despite adverse US and global economic conditions. Entrepreneur Jeff Bezos faced an opportunity rather than a business problem. In the early 1990s Bezos saw the huge potential for retail sales over the Internet and identified books as the most logical product for e-tailing. In July 1995, Bezos started Amazon.com, an e-tailing pioneer, offering books via an electronic catalogue from its website. Over the years the company has recognised that it must continually enhance its business models and online storefront by expanding its product selection, improving the customer experience, and adding services and alliances. In addition, the company recognised early on the importance of order fulfilment and warehousing. It has invested hundreds of millions of dollars in building physical warehouses designed for shipping small packages to hundreds of thousands of customers. Amazon.com’s challenge was, and remains, how to succeed where many have failed – namely, how to sell consumer products online, at a profit, and show a reasonable rate of return on investment. The solution: Reaching out to customers In addition to its initial electronic bookstore, Amazon.com has expanded its offerings to a vast array of products and services segmented into three broad categories: media (books, music, DVDs, etc); electronics and other merchandise (including its new wireless reading device, Kindle 2; office supplies; cameras; toys; etc.); and other (non-retail activities, such as Web services, Amazon Enterprise solutions, etc.) Key features of the Amazon.com superstore are easy browsing, searching, and ordering; useful product information, reviews, recommendations, and personalisation; broad selection; low prices; secure payment systems; and efficient order fulfilment. Amazon.com is known for its innovations. For example in 2010, Amazon Seller Product Suggestion Box provides transparency to sellers by recommending specific products for third party sellers to sell on Amazon.com. The suggestions are based on customers’ browsing history. The Amazon.com website has a number of features that make the online shopping experience more enjoyable. For example, its ‘Gift Ideas’ section features seasonally appropriate ideas and services. AmazonConnect allows customers to select their favourite authors, read about them, and then receive e-mails from some of those authors. Amazon.com also offers various marketplace services. Amazon Auctions hosts and operates auctions on behalf of individuals and small businesses throughout the world. The Shops service hosts electronic storefronts for a monthly fee, offering small businesses the opportunity to have customised storefronts supported by the richness of Amazon.com’s order-fulfilment processing. Customers can use web-enabled mobile phones, PDAs, or pocket PCs to access Amazon.com and shop anywhere, anytime (more than $1 billion of merchandise in 2009). Amazon.com can also be accessed via AT&T’s #121 voice service. Amazon.com is recognised as an online leader in creating sales through customer intimacy and customer relationship management (CRM), which are cultivated by informative marketing front ends and one to one advertisements. 15 In addition, sales are supported by highly automated, efficient back-end systems. When a customer makes a return visit to Amazon.com, a cookie file identifies the user and says, for example, ‘Welcome back, Sarah Shopper,’ and then proceeds to recommend new books from the same genre of the customers previous purchases and a range of other items. It also provides detailed product descriptions and ratings to help consumers make informed purchase decisions. The site has an efficient search engine and other shopping aids. Amazon.com has a superb warehousing system that gives the company an advantage over the competition. Amazon.com is known for its strategy and acquisition of its successful competitors in niche markets (e.g., CDNow, Zappos). The company also acquired supplementary companies such as Alexa, Junglee, and DPReview. Customers can personalise their accounts and manage orders online with the patented ‘1-Click’ order feature. 1-Click includes an electronic wallet which enables shoppers to place an order in a secure manner without the need to enter their address, credit card number, and other information each time they shop. It allows customers to view their order status, cancel or combine orders that have not yet entered the shipping process, edit the shipping options and addresses on unshipped orders, modify payment method for unshipped orders, and more. In 1997, Amazon.com started an extensive associates programme. By 2009, the company had more than 2 million partners worldwide that refer customers to Amazon.com. Partners that feature Amazon’s products in their self-contained online store embedded directly within their partners’ Web page can earn up to a 15 percent referral fee if the advertisement ends with a sale (cf. affiliate-program.amazon.com). Starting in 2000, Amazon.com has undertaken alliances with major ‘trusted partners’ that provide knowledgeable entry into new markets. For example, clicking ‘Office Supplies’ allows customers either to select from Amazon.com’s office supplies or to browse those to Office Depot; clicking ‘Health and Personal Care’ allows customers to benefit from great deals offered by Weight Watchers. In yet another extension of its services in September 2001Amazon.com signed an agreement with Borders Group Inc., providing Amazon.com’s users with the option of in-store pick up for their merchandise at Borders’ physical bookstores. 16 Amazon.com is also becoming a web fulfilment contractor for national online chains such as Target. AmazonFresh is a grocery delivery service. Amazon MP3 allows downloads, some free, others for 69¢ per song. Amapedia is a wiki for user-generated content, a video on demand service for Amazon MP3. AmazonConnect allows authors to post remarks on their book pages to customers who have bought their books. Amazon.com offers many Web 2.0 social shopping features (e.g. customers’ reviews). It also acquired Woot.com, a company known for its social commercial activities. The Results In 1999, Time magazine named Bezos ‘Person of the Year,’ recognising the company’s success in popularising online shopping. In January 2002, Amazon.com declared its first profit – for the 2001 fourth quarter. Since then the company has remained profitable. Annual sales for Amazon.com have trended upward, driven largely by product diversification and its international presence. This pioneer e-tailer now offers over 17 million book, music, and DVD/video titles to some 20 million customers. Despite the increased competition, Amazon.com has been holding its place as the number one B2C money making EC site in the world. Given its warehouse system and order fulfilment, Amazon.com can offer very low prices. Add to this to the high customer satisfaction and the huge and superb selection of products and you can understand why Amazon.com is selling more than three times the products compared to its nearest competitor. Amazon.com also offers several features for international customers, including over 1 million Japanese language titles. Amazon.com maintained its position as the number one e-tailer in 2008, generating revenues of $19.2 billion, with a net income of $645 million. Amazon.com the king of e-tailers, which has shown all others the potential of B2C eC, is increasing its profitability, even in economic crises. Questions: 1. What are the problems encountered by e-tailers? How has Amazon.com succeeded to deal with these problems? 2. Describe the key characteristics of Amazon.com’s approach that has ensured sustained stickiness among its customer base. 3. At a time when most businesses around the world have suffered the effects of recession, how has Amazon.com managed to grow its business year on year? 4. Do you think all e-tailers would be successful if they were to follow Amazon.com’s approach? Why or why not?

When it comes to meeting the needs of older adults in today’s culture and the role of the church, what are your ideas on what seems to be working well in addressing the needs of this group?

Description

At times the idea of working with older adults may bring a negative image especially when it comes to the complex care that older adults may require. At one time the care of older adults belonged to families; however, the responsibilities of older adult care have shifted increasingly to more structured care facilities such as assisted living places and nursing homes. When it comes to meeting the needs of older adults in today’s culture and the role of the church, what are your ideas on what seems to be working well in addressing the needs of this group? What ideas do you have to improve what is being offered to this population, especially when it comes to communities of faith? What do you think are the barriers to such suggestions?

What are the effects of neoliberalism in Africa?

Topic: Political economy. Choose one of question from the above list. 6,600 words. Answer only “one”. 1. What are the effects of neoliberalism in Africa? Using the case study of Kenya, discuss the effects of neoliberal policies and in particular the structural adjustment programme. In your discussion, include how neoliberal policies are reflected today in Africa economies. You must answer each part of the question correctly. If you choose this question, please make sure you include the attached readings materials. They are mandatory. plus other materials. 2. According to the Karl Marx “Capitalist system inherently contained the seeds of its own destruction” Using extensive research, discuss the above statement. Minimum 6600 words- maximum excluding footnotes. Deadlines 25 of April 2022 at 8pm. Please try to breakdown the question into different paragraphs i.e. Formatting of the assignment. Introduction: – Please provide precise introduction with clear thesis statement. – You also need to provide a clear structure on how the research paper will proceeds. A good paper tells the reader what to cover in each step. Body This part should consist of different paragraphs. – Each paragraph must start with clear topic sentence, followed by explanation of the topic sentence, then evidence for the claims made, then analysis and synthesis of the claims and conclusion. There must be proper linking or coherence from one paragraph to another. – Each paragraph must have separate point i.e., paragraph one – Alienation of workers in production, paragraph two, Conflict between one group and another etc. – What featured in the first paragraph should not appear in the second paragraph. – Please adhere to subject- verb agreement- When the subject is plural, the verb must be plural etc – Adhere to tenses as well i.e., a past tense cannot be proceeded by present tense. – Adhere to grammatical rules. All sentences must start with capital letters and end with appropriate punctuations. – Must reference the work in accordance with academic referencing procedures. – Use Chicago citation style with footnotes. – Use Ibid if you use the same source subsequently – You need to use a variety of sources from books, journals articles, reports, books chapters and edited works. Maximum of 30 and above. – Avoid copy pasting as this work will be subjected to Turnitin software testing. Conclusion The research must provide good conclusion. Conclusion is not a mere repetition of main points in the body but critical synthesis and analysis of information. Do not introduce new idea in conclusion. You can conclude by generalisation, re-instatement, or recommendations. Please use only one way of conclusion.

Is Forced Migration considered a subset of international Migration, causing many people worldwide to be unprotected and forced to immigrate to another country?

Outline and Annotated Bibliography: Forced Migration

            Principal Question: Forced Migration is considered a subset of international Migration, causing many people worldwide to be unprotected and forced to immigrate to another country?

Introduction

Fiddian-Qasmiyeh, Elena, Gil Loescher, Katy Long, and Nando Sigona, eds. The Oxford    handbook of refugee and forced migration studies. OUP Oxford, 2014.

            The book by Fiddian-Qasmiyeh, Elena, Gil, Katy, and Nando contain in-depth investigations, research, and scholarly knowledge on forced migration, among other things. The writers present essential details on the reasons for forced migration and also the difficulties experienced by those who are left behind likely to those who are compelled to migrate. Information about forced migration and also the refugee issue is abundant in this book, which also provides extensive coverage of the refugee situation. The writers summarize the supporting evidence of numerous reasons for forced migration in one section.

Disaster

a). Climate Change

Do Yun, Seong, and Brigitte S. Waldorf. “The day after the disaster: forced migration and income loss after hurricanes Katrina and Rita.” Journal of Regional Science 56, no. 3 (2016):420- 441.

            Based on the damage of property and the collapse of money generating industry, Do Yun and Brigitte talk about the forced migration that occurred after hurricane Rita and Katrina in the United States. The authors present a thorough analysis of the numbers of people who were displaced as a result of the disasters. The article as a result provides facts and statistical information representing the economic losses that have occurred as a result of the storms, as well as how the hurricanes’ impacts have resulted in forced migration.

Price, Susanna, and Jane Singer, eds. Global Implications of Development, Disasters and Climate Change: Responses to Displacement from the Asia Pacific. Routledge, 2015.

            The book by Price and Jane is concerned with the consequences of disasters in the Pacific and Asia, based on how governments react to different natural disasters that impact the region. The authors draw attention to forced displacement across Asia and the Pacific. A collection of disasters statistics and case studies that have contributed to forced migration are included in this book. The authors are particularly interested in how governments respond to forced displacement as a result of natural disasters and climate change. Full knowledge of natural disasters as reasons for forced displacement is possible by the reading this book.

b). Political reasons and warfare

Bin Talal, El Hassan. “Europe And The Future Of International Refugee Policy.” Forced

Migration Review 51 (2016): 78. Advanced Placement Source. Web. 3 Feb. 2016.

            The author’s recommendations on how to deal with the large impact Syrian refugee issue that is expanding throughout Europe are presented in this post. By concentrating on the devastated Syrian refugees given their impact on Europe, this piece serves as an inspiration to European authorities to welcome them and give them the necessary aid they need to survive in a foreign land. Having several doctoral degrees and writings on a variety of themes, the researcher is a representative of the renowned Jordanian royal family, who has shown strong support for the integration of refugees stuck in other nations. Also included is expressed emotions intended to persuade authorities to empathize with refugees around and enable them to acquire help from inside the hosting nation.

Collins, Doug, et al. “The Pros And Cons Of Allowing Syrian And Iraq Refugees Into The United States.” Congressional Digest 95.1 (2016): 14. MAS Ultra – School Edition. Web.

Would it be feasible for Spotify to develop other kinds of exclusive content, such as video?

SPOTIFY CASE ANALYSIS The Case is written in 2019; however, our focus is to bring in more content details to support the current business. To help with your critical thinking: 1. Understand the situation, from the viewpoints of the environment, competition, and the company’s corporate mission and vision statement (see additional documents posted in the Assignment on Blackboard). 2. Position alternative courses of action Case Synopsis In early 2019, Spotify announced an operating profit of $95 million for the fourth quarter of 2018. The world’s largest streaming company was approaching profitability for the first time after a decade of massive losses. Previously a staggering increase in revenue, which exceeded $5 billion at the end of 2018, had failed to get it out of the red. By the late 2010s, streaming had become the way to consume music, fueling the first global sustained growth of the music industry since the 1990s. Spotify had nearly 100 million subscribers and 200 million users overall but the company was not immune to threats. The Case jumps back to the 1990s to talk in detail about how digital formats disrupted the music industry. Several innovations changed the way people could acquire and listen to music, which caught the music industry off guard. Revenues had fallen, and it was not until the success of digital music downloads— spearheaded by Apple and at the time its iTunes stores (as you know, Apple transitioned away from iTunes early 2019 into the Apple Music app) in the first decade of the 21st century—and in particular streaming in the 2010s that the industry seemed to finally get on a path to recovery. The Case then describes Spotify’s features and its two business models: one free service where users can listen to music but are interrupted by advertisements every few tracks, and a premium service without the commercials and with several features added. Royalties were the biggest component of Spotify’s costs and depended largely on deals with the major music labels controlling the industry—deals that Spotify was able to renegotiate in 2018. The Case then sets out the threats facing Spotify, particularly the threat from large digital companies such as Apple, Amazon, and Google. Spotify was engaged in a bitter rivalry with Apple Music, which had become a success on its own. Apple CEO, Tim Cook claimed that Apple Music was already the top streaming service in the US music market and the largest in the world by revenue. Apple had announced plans to create a cultural one-stop shop that would include music, video, books and even video games. Likewise, the retail giant Amazon was already bundling music streaming with its own retail and videostreaming services, and Google was doing something similar with YouTube. It was in the landscape that Spotify announced the acquisition of several podcast publishers and creators, starting what it regarded as an audio gamble and expanding its catalog to include content unrelated to music. Podcasting was still a very small market but it was growing in popularity. Observers might ask whether Spotify could work its magic twice, growing podcasting as it had done with music. The Case concludes by asking whether this gamble can make Spotify more competitive against its growing rivals. or whether there are other strategies the company can adopt. You have been called in by the founders, Daniel Ek and Martin Lorentzon to assist with continuing to move their business model forward with their Podcast strategy. The Founders know you are not an industry expert in the music streaming industry but respects your knowledge as a marketing consultant leader. Ultimately if this meeting goes well, you will be invited to present your recommendations/analysis/argument to Board of Directors. The Founders sent the below to assist with your critical thinking and integrate into your analysis/argument. This is based on Spotify’s strategic move into nonmusic content with the Podcast Gamble. • The podcast strategy allows Spotify to differentiate itself and compete on content. The Founders strongly believe nonmusic audio content has better synergy with Spotify’s expertise and infrastructure • To increase user retention and engagement—Podcasts are episodic and are released at regular intervals. Popular podcasters have loyal audience who listen to new content as it is published. • To reach potential customers who are not interested in music streaming—but may be interested in some of the many topics covered by podcasts. In addition, the Founders are asking you to consider other alternatives, to remain competitive, grow and drive revenue, such as: • Acquisition—should they purchase several podcast creators and publishers • Should Spotify be acquired—by another company with competencies or • Partnerships—not acquired but enter into partnerships in order to improve competitive position • Encourage more focus from free to premium—If the free version is just a means to get people to go for premium, maybe the “natural” number of free users should be lower than it is now. Consider further limiting the free version’s features. • Competing on content—Spotify’s nonmusic audio gamble (growing the podcast business) is a way for the company to compete on content. Would it be feasible for Spotify to develop other kinds of exclusive content, such as video? • Geographical expansion—Spotify has started to enter emerging markets such as the Middle East and India. It has yet to enter the Chinese mainland are other markets considerations for Spotify should enter? Are there also drawbacks to geographical expansion. Spotify’s Mission Statement Spotify’s corporate mission is “to unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by these creators.” In this corporate mission statement, the company declares its purpose in supporting creative work, creators’ livelihood, and worthwhile access to these creators’ works Spotify’s Vision Statement for a Cultural Platform Spotify’s corporate vision is to be “a cultural platform where professional creators can break free of their medium’s constraints and where everyone can enjoy an immersive artistic experience that enables us to empathize with each other and to feel part of a greater whole.” The company’s nature as a platform, and the metaphysical value of the music streaming business are specified in this corporate vision statement. In essence, Spotify considers itself as a promoter of international societal improvement via cultural relations.

Discuss some realistic recommendations which will help to address the issues that should be addressed to make cross-cultural merger a success.

Assessment 2 – 1500 words (+/-10%) Individual Report (60%)

 

Individual Report

 

Please pick part A or B and critically respond to the questions.

 

 

Part A

 

  • Daimler – Chrysler Cultural Mismatch Case Study

sd

Introduction

In May, 1998, Daimler-Benz1 and Chrysler Corporation, two of the world’s leading car manufacturers, agreed to combine their businesses in what they claimed to be a ‘merger of equals’. The DaimlerChrysler (DCX) merger took approximately one year to finalise. The process began when Jurgen Schrempp3 and Robert Eaton4 met to discuss the possible merger on 18 January 1998. After receiving approval from a number of groups, the merger was completed on 12 November 1998.

 

The merger resulted in a large automobile company, ranked third in the world in terms of revenues, market capitalisation and earnings, and fifth6 in the number of units (passenger cars and commercial vehicles combined) sold. DCX generated revenues of $155.3 billion and sold 4 million cars and trucks in 1998. Schrempp and Eaton jointly led the merged entity, as co-chairmen and co-CEOs. DCX sources were confident that the new company was well poised to exploit the growth opportunities offered by the global automotive market in terms of geographical and product segment coverage.

 

However, analysts felt that to make the merger a success, several important issues needed to be addressed. The most significant of these was organisational culture. German and American styles of management differed sharply. A cultural clash would be a major hurdle to the realisation of the synergies identified before the merger. To minimise this clash of cultures, Schrempp decided to allow both groups to maintain their existing cultures.

 

The former Chrysler group was given autonomy to manufacture mass-market cars and trucks, while the Germans continued to build luxury Mercedes. However, analysts felt that this strategy wouldn’t last long. When Chrysler performed badly in 2000, its American president, James P. Holden, was replaced with Dieter Zetsche from Germany. Analysts felt that Zetsche would impose Daimler’s culture on its American counterpart. A few senior Chrysler executives had already left and more German executives were joining Chrysler at senior positions.

In an interview with the Financial Times in early 1999, Schrempp admitted that the DCX deal was never really intended to be a merger of equals and claimed that Daimler-Benz had acquired Chrysler. Analysts felt that this statement probably wouldn’t help the merger process.

 

Clash of cultures

DCX’s success depended on integrating two starkly different corporate cultures. ‘If they can’t create a climate of learning from each other,’ warned Ulrich Steger, a management professor at IMD, the Lausanne business school, ‘they could be heading for an unbelievable catastrophe.’ Daimler- Benz was characterised by methodical decision-making while Chrysler encouraged creativity. Chrysler was the very symbol of American adaptability and resilience. Chrysler valued efficiency, empowerment, and fairly egalitarian relations among staff; whereas Daimler-Benz seemed to value respect for authority, bureaucratic precision and

centralised decision-making. These cultural differences soon became manifest in the daily activities of the company. For example, Chrysler executives quickly became frustrated with the attention Daimler-Benz executives gave to trivial matters, such as the shape of a pamphlet sent to employees. Daimler-Benz executives were equally perplexed when Eaton showed his emotions with tears in a speech to other executives. Chrysler was one of the leanest

and nimblest car companies in the world; while Daimler- Benz had long represented the epitome of German industrial might (its Mercedes cars were arguably the best example of German quality and engineering).

Another key issue at DCX was the differences in pay structures between the two pre-merger entities. Germans disliked huge pay disparities and were unlikely to accept any steep revision of top management salaries. But American CEOs were rewarded handsomely: Eaton earned a total compensation of $10.9 million in 1997. Complications would arise if an American manager posted to Stuttgart ended up reporting to a German manager who was earning half his salary. Chrysler could cut pay only at the risk of losing its talented managers. Schrempp mooted the idea of overcoming the problem through a low basic salary and high performance-based bonus, unlike anything seen in Europe. Base pay would be lower than Germans were used to, but the pay structure would have more variables such as stock options (an American feature).

 

Germans and Americans also had different working styles. The Germans were used to lengthy reports and extended discussions. On the other hand, the Americans performed little paperwork and liked to keep their meetings short. Americans favoured fast-paced trial-and-error experimentation, whereas Germans drew up painstakingly detailed plans and implemented them precisely. In general, the Germans perceived the Americans as ‘chaotic’ while the Americans felt that the Germans were stubborn ‘militarists’.

Chrysler managers believed in spotting opportunities and going for them. However, post-merger, they were trapped in the German style of planning, constantly being told what to do. Steve Harris, Chrysler’s former communications chief (who defected to General Motors) commented, ‘The Germans played literally by the book – theirs. You’d go into a meeting and have to turn to Volume 7, Section 42, page 597.’ The Germans prided themselves on analytical research that produced a plan, while the Americans reached for the impossible and kept coming up with new ideas to achieve these ‘impossible’ goals.

Before the merger, Daimler-Benz was known for its top down management approach. Chrysler, by contrast, seemed to be a humble collection of colourful consensus managers. DCX claimed that the merger process would be complete in 12 months. However, analysts felt that the authoritarian German management methods would prove foreign to the non-hierarchical style at Chrysler, making the integration of the two cultures difficult. From the start, the cultural differences made DCX’s post-marriage period of adjustment difficult. No sooner was the merger announced; Schrempp started issuing reams of organisational flow charts to the employees. Every phase was given titles like ‘synergy tracking’; and every group had its weekly meeting schedule. DCX also set up a ‘post-merger integration’ (PMI) structure in which 12 ‘issue-resolution teams’ were assigned to push and cajole their counterparts into combining everything from supplies to research. Every time there was disagreement, the integration process for that group was halted until a solution was found.

 

Attempts to bridge the chasm

DCX took several initiatives to bring the two cultures closer. Press reports indicated that in Stuttgart, the more formal Germans were experimenting with casual dress. The Germans were also taking classes on cultural awareness. The Americans at DCX were encouraged to make more specific plans, while the Germans were urged to experiment more freely.

Analysts felt that there were many indications that the Americans and the Germans might come closer. The Americans were impressed by their German counterparts’ skill with the English language (though they tried to cut down on slang to simplify speech when the Germans were in town). To reciprocate, many Americans were taking lessons in German. When the DCX stock began trading on 17 November 1998, German workers celebrated with

American-style cheerleaders, a country & western band called The Hillbillies, doughnuts and corn on the cob. At a Detroit piano bar, the Americans were taken by surprise when they realised that the Germans knew the lyrics of old rock-and-roll songs.

 

Daimler’s hegemony

In 2000, there was a management exodus at Chrysler headquarters in Detroit: two successive Chrysler presidents, James Holden and Thomas Stallkamp, both American, were fired. Holden was fired after only seven months in the position. Stallkamp replaced Holden and was forced to resign after only 12 months as CEO. Unreal as it might seem, two highly regarded Chrysler executives were fired from their CEO positions in the space of 19 months. Zatsche, the newly appointed CEO of Chrysler USA, was a Daimler executive and a close confidant of Schrempp. He, in turn, appointed Wolfgang Bernhard, another Daimler executive, as COO. Neither had any real exposure to the US marketplace. This turn of events demoralised Chrysler’s workers. According to an employee, most of the workers were disgusted and frustrated because they felt they were being punished. The employees were expecting big layoffs, and were worried that the company would be sold out.

Analysts felt that after the merger Chrysler would no longer exist as an entity. In fact Chrysler was reduced to a mere operating division of DCX. The Daimler-Benz management presence permeated every important function at Chrysler USA. There was no Chrysler presence on the DCX supervisory board or the board of management. By the end of 2000, there were only 128000 Chrysler employees still working in the US operations, all anxious and demoralised. Ex-Chrysler managers felt that Daimler-Benz was steadily leading Chrysler into a state of chaos.

Schrempp himself said that he never intended the merger be one of equals. He openly acknowledged that if Daimler-Benz’s real intentions were publicly known before the merger, there would have been no deal. However, in a press interview, Schrempp largely retracted his statements by saying that if the strategy were to take over Chrysler Daimler would never have included them in the name of the new corporate entity. Analysts felt that these contradictory statements had severely tarnished Schrempp’s image, both in Germany and the US.

Given these chaotic circumstances, Chrysler reported a third-quarter loss of $512 million for the period ending 30 September 2000; and its share value slipped below $40 from a high of $108 in January 1999.

 

DCX in trouble

Analysts were of the opinion that DCX should eliminate between 20 000 and 40 000 jobs at its North American Chrysler division and permanently close at least one of its 13 plants in the US and Canada because of huge financial losses in 2000. After third-quarter losses of more than half a billion dollars, and projections of even higher losses in the fourth quarter and into 2001, Schrempp told employees that Chrysler had only 13.5 per cent of the US market, but it was staffed as if it had a 20 per cent share.

 

In early 2001, DCX announced that it would slash 26 000 jobs at its ailing Chrysler division. ‘No one wants this to happen. I personally wish it didn’t have to happen,’ said Zetsche. He called the moves painful but necessary in the face of ‘brutal’ competition and low US sales. Zetsche said a large part of the job cutting would be through retirement programmes, layoffs, attrition and other means. About three-quarters of the job cuts would be made in 2001, he said. In addition, production would be curbed at factories in Canada and four states in the US by slowing assembly lines and trimming the number of shifts.

However, analysts interpreted this move as a failure of the German and American auto-makers to live up to their promise. One of them said, ‘Instead of making the billions of dollars in cost savings and synergies at the time of the merger, they’re making desperate cuts to get Chrysler back in the black.’

 

Why the merger failed to realise synergies

Analysts felt that, strategically, the merger made good business sense. But opposing cultures and management styles proved to be a hindrance to the realisation of synergies. Daimler-Benz attempted to run Chrysler USA operations in the same way as it would run its German operations. This approach was doomed to failure. In September 2001, Business Week wrote, ‘The merger has so far fallen disastrously short of the goal. Distrust between Auburn Hills and Stuttgart has made cooperation on even the simplest of matters difficult. Coming to terms with issues like which parts Mercedes-Benz would share with Chrysler was almost impossible. The Germans and the Americans had been out of sync from the start. The two proud management teams resisted working together, were wary of change and weren’t willing to compromise. Daimler- Chrysler have combined nothing beyond some administrative departments, such as finance and public relations.’

 

Questions

Mergers and acquisitions take place to realise the synergies between the two or more companies involved.

  1. Using Cultural theories, explain why do you think the Daimler-Chrysler merger failed to realise the synergies that were expected from it?
  2. Discuss some realistic recommendations which will help to address the issues that should be addressed to make cross-cultural merger a success.

 

___________________________________________________________

 

Part B

____________________________________________________

 

Question 2:

Choose either pay & rewards or recruitment, and critically discuss whether it is best for MNCs (multinational corporations) to globally integrate their (pay & rewards or recruitment) HR strategies for managers or whether it is best to adapt them to local conditions. Provide specific examples and case studies from the literature as support.

Choose ONE out of the following two international HR strategies, focusing on either:

 

  1. Pay and Rewards
  2. Recruitment

This essay is placed in the broader debate on global integration versus local adaptation. Global integration requires the transfer of HR practices. According to Ghoshal and Bartlett’s (1998) concept of the ‘transnational’ company, the transfer of practices among the MNC network is the most efficient way to innovate and share best practice. However, not all MNCs engage in diffusion; not all practices are transferred; and not all outcomes are the same.

The answer would benefit from a critical understanding of key IHRM models. It should carefully weigh pressures of global integration vs. pressures of local adaptation of HR practices. You should critically weigh different influences on the transfer process: The MNC sector; the organisational structure and corporate strategy of MNC (e.g. the method of affiliate establishment as either Greenfield investment or merger); the influence of national institutional and cultural systems of home and host countries; and organisational politics. Do these promote or hinder the transfer of HR practices? You do not need to discuss all of these, but show you are aware of alternative explanations. Focus on what you consider to be the most important influence on the transfer process specifically when it comes to recruitment or pay of managers. Consult the readings from on Pay, or on recruitment. You can also use examples and readings from Term 1.

This essay could either argue for a strong local adaption of pay/recruitment policies, or for strong global integration. Consider whether global integration necessarily means the direct translation and standardisation of HR policies, or whether global integration and local adaptation can go hand in hand.

Provide specific examples. Draw on the key and further readings of the lectures and seminars, and find additional sources. You can complement the reading list with sources written in your main mother tongue as long as they relate to HRM and/or ER.