Lee Iacocca made a name for himself by saving Chrysler Corporation from the brink of bankruptcy in the late 1970s and built it into a powerful and profitable firm in short time. Management and manufacturing changes implemented by Iacocca resulted in a dramatic increase in Chrysler's stock price and Iacocca's ego. However, as the cash flowed in during the early to mid 80's, Iacocca lost focus of what made the company successful and he changed Chrysler's growth strategy by investing large amounts of capital in businesses that were unrelated to the auto industry. In the early 1990s, Chrysler again found itself in a precarious situation with its market share and stock price in steady decline. In early 1993, Robert Eaton was set to succeed Iacocca as CEO in a pivotal period for Chrysler. Through an analysis of the strategic alignment framework, we have developed a plan of action for Eaton as he takes the helm at Chrysler Corporation.
Context of the Chrysler Corporation
In the second half of the 1970s and into the early 1980s, the automobile industry struggled to overcome economic weakness brought on by a combination of stagflation, rising fuel costs, regulatory pressure from Capitol Hill and intense competition from Japanese and German automakers. While these events negatively impacted each of the Big Three American automakers, Chrysler suffered the most due to its formal organizational structure, the attitude of senior management, the lack of culture within the organization and an emphasis on tasks centered on financial management rather than car design.
Chrysler's formal organizational structure preceding Iacocca's tenure involved each business line operating in separate silos; the 35 operating units had no communication with each other. There was no formal structure in place to supervise the cross-pollination of information and ideas across business units. The lack of cohesiveness and idea generation impeded management's ability to react swiftly to the outside forces that endangered Chrysler's financial health.
In addition to a poor organizational structure, Chrysler suffered from ineffective leadership. Before Iacocca, senior management was saturated with people who did not understand the auto industry. Management consisted of financial experts focused solely on tasks such as monitoring short-term results and Chrysler's stock price as opposed to a long-term vision and effective growth strategies. This led to a shortage of capital for investment in the design and engineering of new products critical to the future of Chrysler.
This paper will focus on the future of the U.S. Automobile industry as the United States recovers from the worst recession we have experienced in the past 75 years. I will provide information on the following topics pertaining to the U.S. automobile industry:
The Big Three automobile companies, General Motors, Chrysler, and Ford, also had a very demanding labor union, the United Auto Workers or UAW, which asked for many benefits and salary requirements which lowered their ability to compete with other companies on the market, foreign and non-union. The average...
In this argument I will be focusing on Fox Car Rental, Inc. as the basis for a systematic analyses of the organization, as I identify the strength, weaknesses, opportunities, and threats to the existence of the organization and its operations. Also, I will be providing three pitfalls to strategic management. In order to facilitate my argument, the use of a strategic matrix analyses will be utilized.
During the Great Depression, every work place was hit hard and many were out of work. The demand for vehicles declined, and the automotive industry took a hit. Once the Second World War began, the automotive industry was given a push in the right direction, and their vehicle production flourished...
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Fast Company,(139), 69-70,73,16. Retrieved from Research Library. Document ID: 1870795761. Wheelen, Thomas L. & Hunger, J. David, (2010). Strategic management and business policy.
with rheumatic fever. He had a harsh bout with the disease because there was no
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Ford Motor Company Strategic Audit Abstract The purpose of this paper is to give a brief detail of the strategic audit of Ford Motor Company. The method of research used was Internet research by topic. In addition to the class textbook audit example used, other written references in the area of Ford Motor Company were used, in order to develop the subject more in detail.
In order for one to evaluate and identify with the diverse business structures, he/she must be aware of the meaning and standards that makes that structure. Various businesses functions in different ways as the world is full of technology and new structures, company cultures and new ways in which companies are run. In order to fully grasp the concepts of Organizational structure and culture in the movies, I will use the Movie Up in the Air and The Devil Wear Prada movies to analyze a business scenario from them.
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