Evaluation of Chrysler’s Organizational Culture, Case Study Example

Chrysler, like many other companies has experienced much change in terms of its culture, and work operations to conform to the demands of the market. The company has experienced a number of challenges affecting its sales and profitability in the past. This has led it to experience changes in leadership in an effort to protect it from collapse. New leadership always would be accompanied by key changes in culture, work design, and value change with the intention to boost the productivity of the business. For the case of Chrysler, the company has seen cultural change in terms of its value systems, management change, as well as, the work culture affecting the overall performance. The coming in of Mr. Marchionne into Chrysler’s business was accompanied by cultural changes that he introduced in the company (Kreitner, 2013).

Mr. Marchionne joined the company as it battled with the challenges of decline in sales. This problem was closely linked to cultural and management issues due to the tendency to maintain old ways to do thing. Mr. Marchionne introduced change in leadership by taking on a transformational form of leadership in making key decisions affecting the business of the company. For instance, when he took over, he changed the its culture of pricing. In this context, he introduced a new culture where he reacted to the falling sales by slashing the prices of the automobiles. This context put the competitors of Chrysler in bad shape. In defending this move, he argued that this change was necessary for it will lead the company to generate sales in the long term (Ahlstrom & Bruton, 2009).

In addition, Chrysler was struggling with basic assumptions and values in its culture that was leading it to run bankrupt. One of the values was that the company maintained the traditional supply chains, and prices of its automobiles amidst the sour market condition. Mr. Marchionne observed that this culture much fostered by the old school leadership maintained by the company over a long period. In this context, he took on radical steps to contain the management problem that was faced by the company. The first move that was undertaken was to oust out the veteran executives. He ousted out veteran executives, and replaced them with new executives committed to take the company through the change process to recover its lost glory (Berger, 2001).

Mr. Marchionne tried to improve the PE fit of his direct reports by putting pressure on the new executives to account for the performance of their respective areas. This made many of the members to develop an element of fear. Using the competing values framework, Chrysler’s new culture is a transformational leadership culture, with a mixture of adhocracy, market, and hierarchy cultures also being applied. Hierarchical culture is evidenced by the force and pressure that Mr. Marchionne gives to the new executives. Market cultures are also evidenced by the way Mr. Marchionne leadership is responsive to the market changes that takes place in the market.

Chrysler’s mission or vision statement on the company’s website reveals that the mission is geared towards customer satisfaction, through developing best automobile brands in its market. The current culture is consistent with this mission, because this culture is focused on creating change to fit to the demands of the market. In other words, its focus is on the customers in the target market, which ultimately will lead to increased customer satisfaction (Chrysler Group LLC, 2014).

References

Ahlstrom, A. & Bruton, G. (2009). Strategy and Culture in the Emerging Automobile World. London: Cengage Learning.

Berger, M. (2001). The Automobile in American History and Culture. London: Greenwood Publishing Group.

Chrysler Group LLC (2014). Available at: http://www.chryslergroupllc.com/company/AboutUs/Pages/AboutUs.aspx

Kreitner, K. (2013). Organizational Behavior. Available at: https://www.inkling.com/read/organizational-behavior-kreitner-kinicki-10th/chapter-3/sergio-marchionne-undertakes