Organizaitonal Change and Corporate Culture

Failure to adapt to a new environment can cost an individual dearly, and in case of Stallkamp - it cost him his job. I do not believe Stallkamp was entirely responsible for his departure from Daimler-Chrysler AG. Instead, there were too many variables that weren't taken into account prior to the merger of Daimler-Benz and Chrysler that eventually culminated in Stallkamp's exit and the dissolution of Daimler-Chrysler AG alliance.

Stallkamp was in a situation where he and the management of both companies were trying to fit a square in a circle. The merger of Chrysler and Daimler was presented as a "merger of equals" and a "marriage in heaven" that would consolidate the strengths of both companies, increase market share, reduce costs, and more importantly increase the bottom line of the newly merged company (Wulf 68).

The problem with that assertion is that a large amount of attention is paid to the possible monetary benefits the newly merged company would derive from a possible merger while differences in organizational culture of the two companies are completely neglected which could potentially impact future profit generation. This problem stems from the fact that it is easier to quantify synergies and other cost cutting measures like reduction in employee headcount which would impress analysts and shareholders, and justify a merger. In comparison, talking about the benefits a company could derive from a resulting organizational culture of a merger would be a tough sell to stakeholders without a dollar sign attached to it. In the case of Daimler-Benz and Chrysler merger, the increased profits that would result from combining of the two companies was the main driver and the focus of the merger, while the conflicting organizational culture each company had was a non-issue. In order for a merger to be successful, the merger needs to occur where the organizational culture of both companies was compatible, and had employee support (Chatterjee, Lubatkin, Schweiger, and Weber 320).

In my opinion the management of both companies was too blinded by profit motive to come to a "rational" conclusion that the merger of the two companies was not feasible or in the best interest of shareholders and stockholders at large. Although on paper the merger of two companies might have seemed rational if not made an absolutely perfect business opportunity, the conflicting organizational culture both companies had would have eventually derailed the merged company - which was eventually the case of DaimlerChrysler. While culture may seem like a "small thing", its affect is pervasive. The culture of an organization affects how things are done within the organization, meetings are arranged, products launched, and how priorities are set (Weber and Camerer 401). Disregarding organizational cultures of different organizations can set a peril during acquisition or merger. In the case of Daimler-Benz and Chrysler merger, the focus was heavily on value it would create to stockholders in terms of increased profit, while no attention was paid to what type of culture the newly merged company would espouse.

I believe Stallkamp along with many other Chrysler executives became a collateral damage of this view which eventually forced him and others out of the company. Besides being in an impossible situation where the management was trying to fit a square in a circle, Stallkamp himself contributed to problems that caused his eventual departure. Stallkamp failed to adapt to a new environment where the Daimler-Benz culture seemed to have superseded the free-wheeling culture of Chrysler. Even though the merger was billed as "merger of equals", Stallkamp should have noticed the shift in power, and should have adapted appropriately. Instead, he stuck to his views which clearly conflicted with those of Daimler-Benz's organizational culture and traditions. When he questioned the remodeling of New York offices or the expenses related to board meetings, his no-frills approach was seen as placing priorities on inconsequential issues instead of focusing on increased profits. Stallkamp was also close-minded and impatient with the German management. He viewed his issues as being the "real problems" that need to be tackled and described the approach of Germans as "not making any sense" and a "do-nothing club".

Robert J. Eaton was also responsible for the departure of Stallkamp. He once described Stallkamp as a possible chairman of DaimlerChrysler to senior managers, but when Stallkamp credibility was under attack and was described by the German management as speaking above his pay grade or meddling in board affairs, Eaton didn't rectify the issue and this led to the perception that he was indeed attempting to punch above his weight. This lack of support from Eaton and Schrempp and the loss of credibility led him to become an open target for criticism and caused his eventual exit.

I believe that Stallkamp was aware of what was happening around him, but was lamenting the change that was occurring and was attempting to do things the "Chrysler Way" post-merger. His questioning of the renovation of New York offices is an example of him attempting to force Chrysler's culture of no-frills approach on the Daimler management. Another example would be his attempt to streamline board meetings which he saw as a "good for nothing club". What Stallkamp wasn't aware was that he was losing allies fast which eventually led him wide open to attacks and criticisms that would undermine his credibility. James P. Holden I believe is a good example of an executive who was aware of what was happening around him, but quickly understood the rules of the new environment and adapted to it. This can be clearly seen when he urged the Chrysler staff to pull together as a business unit it as it was in the corporate organization chart. His quick adaption to the new environment along with the perception of being decisive made him appear to be a good leader in the Daimler management's eyes, and earned their trust.

I believe that there are 2 major lessons that can be learned from the above case study. First, if a merger is being proposed the stakeholders of two companies need to take into account organizational culture of their individual companies, and possible benefits and costs that would derive from it. If the organizational cultures are quite opposite and reconciliation of the two cultures is not possible, the stakeholders should look beyond possible synergies and cost savings and not go ahead with the merger. Second, during an acquisition, any individual within a company - whether he or she is an employee or an executive should be aware of the practices of the acquirer company and not bluntly stick to the views of their original company. It would be better if the employee or the executive knows where the management and the employees of the acquirer firm place their priorities on. This would assure that the employee priorities of the target firm are aligned with the priorities of the acquirer firm. Being patient, open-minded, and willing to do things in a new way will allow you to survive an acquisition as well as help you grow as a leader. Stallkamp felt that his was the right way, and that the Daimler management was doing nothing and just wasting time. His unwillingness to change to a new environment coupled with loss of support from his peers eventually led to his departure from Daimler Chrysler.

Unlike Stallkamp, I do believe that Donaldson was largely to blame for the missteps in Argos Diesel Europe. Donaldson made numerous steps that made him appear insensitive to his European peers. For example, Donaldson should have known the importance of titles and structure in German culture. This is evident when the German managers were demonstrated to be annoyed during the first training program when there were no titles. Since the Germans placed much emphasis on structure, one can imagine the response of Donaldson's manager when she was called a secretary. His continuous missteps made him appear abrasive and caused the European managers to doubt his ability to lead them through the integration program. Although Donaldson's missteps were bad, I don't think they were that severe, and since he wasn't a European, his staff should have been a bit more accepting of his gaffes. Even though I believe his European staff could have been more accepting of his "faux pas", it shouldn't be expected, and since Donaldson wasn't seen as making any attempt to even learn the Swiss German, any leniency for his gaffes from his staff would be highly improbable. In order to be successful in a foreign assignment, an expatriate needs to behaviorally adapt to some aspects of the local culture (Shin, Morgenson, and Campion 63). This was missing in Donaldson's case.

Waterhouse has two options; he can either send Donaldson back to United States with family problems as an excuse or put Donaldson through a mentoring program that would assist him in understanding the various European cultures. The problem with the second option is that a perception about Donaldson has already been made among the European managers, and it would take a long while for them to realize that Donaldson is attempting to change. If the perception that has been set would take longer than the specified contract of Donaldson, Waterhouse would be better of sending Donaldson back to United States, even though that would derail the European team program Donaldson was attempting to implement. The fact remains that even had Donaldson remained, his attempt to integrate various European teams would have failed anyway. There isn't just one European culture, there are numerous different cultures. Instead of prolonging the failure it would be better if Waterhouse acknowledged the missteps and instead started the process anew either an experienced European manager or redefined the European team building operations.

I agree with the views expressed by Roman Borboa and Fons Trompenaars. When executives are sent overseas to manage operations overseas, they face an environment that affects their effectiveness as managers. Donaldson should have gone through a cross-cultural workshop where he was taught about the cultural etiquette of Europe and when he arrived in Europe, he should have had a mentor or a consultant that would give him constant feedback on how he is performing and ways he can correct his faux-passes. The problem with Donaldson is that he doesn't know how his faux-pas is affecting his job performance, and had Argos Diesel Europe and Waterhouse recognized the importance of making Donaldson aware of cross-cultural communication issues, many of his faux-pas could have been avoided.

When I came to United States, I was admitted into a bi-lingual program. Although I knew English, the program served as a medium through which I learned nuances of American culture and etiquette. It was a one on one program lasting for a year, in which my teacher coached me about "dos and don'ts" in America to popular music and movie stars. The program greatly assisted in my assimilation to American culture. A similar program could have also assisted Donaldson in his understanding of European values and etiquette. For future assignments to be successful, Argos International should develop a program where it can identify leaders who can successfully complete foreign assignments, train executives in adapting to foreign culture, provide continuous feedback on their absorption of culture of their new host country, take into account potential affect of foreign assignment on the expatriate family, and the stress of the foreign assignment on the executive. Argos International should also know benefits of sending an executive to a foreign assignment versus selecting an executive locally (Harvey 131).

Some of the common themes that I believe both Donaldson and Stallkamp shared were that they didn't figure out the rules in the new work place, they were unable to change to a new environment, they felt that their way was the right way of doing things, and went out their way in implementing their views on others, and both limited their interaction in the new workplace and as such failed to create new partnerships and networks.
Donaldson and Stallkamp both didn't get the memo that they were in a new workplace, Stallkamp felt that it was still the same old Chrysler he worked for, and unwilling to change to the new realities. Since the merger, the rules of the office changed and his freewheeling style directly conflicted with the authoritarian management style of Daimler-Benz. In case of Donaldson, he was assuming that Europe was United States and what worked in Detroit would also work in Europe. He didn't take into account the vastly different cultural differences that exist in Europe, and was unwilling to drop the practices that worked in US, which seemed to go nowhere in Europe. In a study carried out by Christine Grosse, she found that 80% of respondents to a cultural knowledge survey felt that their knowledge of local culture and language benefited them in their careers and gave them a significant competitive advantage in business (Grosse 366). In the case of Donaldson, he was in Europe for a few years, but he didn't make any attempt to learn cultural nuances of various European countries, not he made any visible effort to learn any of the European languages which put him in a further disadvantage in trying to bridge any cross-cultural miscommunications.

Both Stallkamp and Donaldson didn't agree with the way work was done at their new workplace. In Stallkamp's case he felt that the Daimler way was too authoritarian, which conflicted with the open Chrysler culture. He attempted to enforce the open culture during board meetings freely discussing issues that didn't concern Chrysler, which were seen as annoyances by the German management. He also felt that Daimler spent money on unneeded luxuries such as renovations of New York offices, which on the other hand were seen as inconsequential. As far as the Daimler was concerned leadership wasn't about harping offices, but rather making bold decisive decisions which they saw as lacking in Stallkamp. Donaldson on the other hand thought that employees in Europe were practicing the old ways and that they need to catch up to Argos' way i.e. his way of doing things. According to Donaldson's view it was ok to go beyond scheduled timings, eat at office desk, and involve private life and office life, all of which conflicted with the European view of doing things. Failure to reconcile these differences on Donaldson's part ended up with the European managers becoming non-responsive to his requests and eventually asking for his replacement.

Neither Stallkamp nor Donaldson made an effort to make connections with their peers in the new workplace. In Stallkamp's case, I didn't see any proactive effort on Stallkamp's part to interact with colleagues in Germany. His interaction seemed to be limited to the board members of the Daimler management in United States. For example, had he interacted with other colleagues from Daimler-Benz, he could have avoided the strategic planning fiasco, and instead might have co-opted Eckhard Cordes in strategic planning of the firm. Donaldson on the other hand was seen as an "Arbeitstier" - a work animal who never interacted with his staff during lunches, and instead preferred eating sandwiches in his office. Donaldson could have also attempted to establish informal network with other expatriates from both within his firm and outside his firm which could have exposed him to a wide array of new career opportunities. Having formal and informal ties with other expatriates could have also assisted him in fulfilling his organizational responsibilities (Yan, Zhu, and Hall 383). Donaldson also didn't seem to have trust or a line of communication with other European managers, as they all come to his manager to address their problems instead of grieving their issues direction to Donaldson.