Chrysler: Iacocca's Legacy

Essay by guyescapUniversity, Master'sA+, November 2004

download word file, 7 pages 3.4

Chrysler Case Analysis

Give the history of the company in the case. In this history you should discuss how the company came into the situation presented in the case.

Chrysler Corporation was formed in 1925 when Walter P. Chrysler restructured several companies. Continued acquisition over the next several years placed Chrysler third among automakers worldwide. By 1978, the company was losing market share and showed a loss of $204.6 million. The president of Chrysler knew changes had to be made and recruited Lee Iacocca into the Chief Executive Officer position at the beginning of 1979 (Nohiria).

Chrysler had a history of financial investments that were unstable. The organizational structure was top-heavy with 35 vice-presidents and no system of communication between units. The financial officer was focusing on short-term profits, instead of long-term stability. In this case, Chrysler was suffering from losses on two separate points in time. The first was during the mid to late 1970s before Lee Iacocca took over as President.

The second began to develop in the mid to late 1980s when Iacocca began to diversify and grow the business in multiple markets.

Provide a short discussion of the key management of the company. In this section you should talk about any beliefs or values or philosophies of these individuals, which are important in understanding how the company operates or why the company is facing a decision or a problem in the case. Also discuss the training, experience or background of the key management individuals that are significant to the case.

When Lee Iacocca became President at Chrysler, he had a Bachelor's and Master's in Structural Engineering. He held a career of 32 years at Ford, and was acting president until 1978, when he was fired by Henry Ford due to a conflict of interest. While at...