DaimlerChrysler CVD

4 Pages   |   758 Words

Key Issues

The main issues highlighted in the given case included generalization, lack of synchronization, poor integration and ignorance of some ground realities. There was a lack of coordination amongst the different regions in which DaimlerChrysler CVD had their operations. There were other recorded issues like the presence of better local suppliers when the company was generalizing the supply chain. Moreover, there were several growing markets which were ignored by the company, making it lose on some potential global market's share. There were other corporate management issues like mergers and disoriented business plans. In addition to that, some facts like variation in demand, difference in IT for the divisions, heterogeneity of legal requirements and production volumes calculation were completely or partially ignored.

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How were these issues handled?

These issues were and are well spotted and partially cured under Lauk's leadership. He firstly organized the company into one single format and tried to centralize the decision making power and design. He also came up with solutions towards a better integration amongst different geographical regions and merged some of them to flatter the organizational pyramid through collective control over one main region rather than every single country. The company also speckled some previously overlooked markets and tried to develop a business plan with other major suppliers or bigger names of some local markets. They also implemented better supply chain management and came up with solutions on organization's global and domestic fronts. This was a wise and flexible move which furnished the company's goal of being a major stakeholder of the global CVD market.

However, all the decisions taken by the firm were not totally right. The company ignored the fact that not all the regions in the world can be generalized, and different strategies regarding every aspect of the business were required to be molded accordingly. For example, one design for a vehicle can never be good enough for customers in Europe and in America. Also, merger with an organization with a completely different organizational structure can be fatal for the company's own growth and interest.

Alternative courses of action and their evaluation

In order to overcome all these problems associated to the scenario, several alternate courses of action can be taken. Firstly, there can be a better plan for grouping the regions rather than just sticking to one design. Secondly, better supply chain management can lead the organization towards its ultimate goal of profit maximization. A better management of human resource especially keeping in mind the cross cultural exchange and diversified experience can also be a solution to overcome the lack of coordination. This can in return be fruitful in terms of better synchronized organization; its productivity and easy to manage resources. Cultural exchange can also be a major contributor towards the better understanding of the global market research and in calculating the diversified market risk in the regional markets. There can be a better assembly of uniform IT in the operations that are being run across the globe. There is also a need for the customization of products and regulations according to different regional legal and sociopolitical setups. The production volumes should also be analyzed more critically. And lastly, there can also be a much better plan for taking over the global market share rather than merging with different major local market players, without calculating the share of profits and loss of company's core values.

Best course of action

The best arrangement in the given scenario would be to come up with a proper business plan. The company should set its goal, regionally and globally. The regions should be divided on the basis of cultural and market similarities, not solely on the geographical basis. After that, there should be a comprehensive market research that is to be carried out globally, primarily focusing on the untapped markets like Asia. After the research, designs should be customized according to the region by keeping the local (cost effective) suppliers in the loop. The organizational structure should be flatter in terms of the flow of information. All the major decisions should be made at the global HQ, not the regional head offices. Cultural exchanges workshops should be planned in order to attain the better understanding of the global market scenario. This would also contribute in polishing the maximum potentials of the human resource through exposure to the diversified market setups. There should be a more efficient risk management and precise production volume prediction which would ultimately lead the firm towards its goal of being the global market leader.

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