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Case Study

DaimlerChrysler: Corporate governance dynamics in a global company

By Ulrich Steger and George Rädler

27 pages

November 2003

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Reference: IMD-3-1273

The development of the corporate governance system of DaimlerChrysler is of special interest, because few companies made such an organizational leap to globalization in such a short period of time. At the time of the merger in 1998, Daimler-Benz AG was an export-oriented, predominantly German company, whereas Chrysler Corporation focused almost exclusively on the US market. The $36 billion merger to form DaimlerChrysler AG (DC) was massive by any standard. But what happened afterwards? This case gives a detailed overview of what took place in the five years after the announcement of the deal in 1998. The main purpose of this case is to outline the intricacies DC encountered in the process of merging American and European corporate governance features. DC had to design a governance system, which overcame national differences, regulatory divergence and reflected business developments. Although DC was based in Germany, it was operating globally and had to comply with many rules and regulations. How could DC set up a governance system, which offered on the one hand transparency and accountability while allowing top managers enough time to properly do their day-to-day job?

Keywords

Corporate Governance, Global Business, Risk Exposure, Automotive

Settings

World/global
1998-2003

Type

Field Research

Available Languages

English

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