MEMORANDUM
Overview of Daimler Chrysler
Daimler
Chrysler is the name of the the car company that Chrysler
and Daimler, the make of the Mercedes
Benz merged in 1998 to form. Apparently Chrysler, the US auto
maker, is having problems with a slumping market for US automobiles.
Chrysler's new chief executive officer and former Daimler board member
Dieter Zetsche wants to work aggressively to turn Chrysler around and not
make the make the merger with Daimler a bad business mistake.
Problems Facing Chrysler
The Fortune
magazine article referred to above mentions a few of the problems facing
Chrysler. They are not all serious business problems, but they are problems
that can lead to the loss of money if the proper decisions are not made
and if those decisions are not carried out.
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One problem facing Chrysler was a plant in
Sterling Heights Mich. The Plant needed to be able to produce convertibles
and hardtops at the time. This is a task usually performed by two
separate lines. Chrysler did not have the funding to support two lines
so they had to figure out how to deal with the problem.
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As mentioned above Chrysler faces a bad future
out look for American car sales in the year 2001.
Daimler Chrysler's Decision Making Models
I think that this article displays a combination
of two of the organizational decision making models that were discussed
in class.
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The first decision making model that I think
the Daimler Chrysler problem falls under is the Incremental Process model.
The reason I picked incremental is because the problem identification seemed
easy to Chrysler, they had to produce convertibles and hard tops in the
same plant. The solution to this problem is very difficult especially considering
most automobile factories assemble them on separate lines.
The answers to the problems of the convertibles
and the hardtops and many other problems facing Chrysler were not as difficult
as initially thought. The manager in Sterling Heights found out that there
is a Daimler plant in Germany that can handle the process of making hardtops
and convertibles. Even more interesting is the fact that the new process
involves just as many workers and about the same amount of floor space.
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I think that this method of decision making
is most similar to the Garbage Can method. the only thing that seems
to vary with this and the problem facing Daimler Chrysler is that in the
Garbage Can method problem identification is difficult, I think that Chrysler
knew what their problem was, but the only way to solve it effectively was
to just find out that Daimler already knew how to deal with the problem.
This probably saved the company a lot of money on trial and error alone.
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Estimates by Chrysler's manufacturing chief
Frank Ewasyshyn say that by using the Daimler methods of combining hardtops
and convertibles in the Sterling Heights plant that has saved Chrysler
$100 million.
There are other things that Chrysler learned
from Daimler to be more cost effective and things that Daimler has learned
from Chrysler.
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By using rear wheel drive automatic transmissions
in Jeeps, a design developed by Daimler Chrysler can save over $600 million
around the year 2005.
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Daimler has started to use Chrysler's more
effective method of preparing car doors for painting.
The Importance of Effective
Decision Making
For a business to succeed it is very important
for the manager or person in charge to be able to make responsible decisions.
If not for the methods of decision making that officers of Daimler Chrysler
made the company could have lost a great deal of money. With the forecasts
that they have made that is money that can not be taken lightly. |