Cultural Comparison of Australia and Japan using the Automobile industry

Essay by aayushmailUniversity, Master'sA-, August 2009

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INTRODUCTIONDiamlerChrysler is an Anglo-German motor corporation formed out of Diamler-Benz of Germany and Chrysler of America. It is the world's fifth largest car manufacturer, best known for its Mercedes and Maybach brands. Jurgen E. Schrempp, the company's Chairman wanted to create a "Welt AG"(global corporation) with widespread presence across all major markets. He unsuccessfully courted Nissan and Honda (Miller, 1998) before finally settling on Mitsubishi Motors. Mitsubishi was hit hard due to the East Asian Financial crisis and was under a debt of 1.7 trillion Japanese Yen (Bremner, 1999). Finally DC acquired a 34% controlling stake in Mitsubishi Motors, the deal between the two companies was billed at 2.1 billion Euro. Although DC had Veto Powers in all board decisions, most of the older management in Mitsubishi was retained (Schmid, 2000). The Germans were confident of turning the company around with a stress on quality and a standard restructuring job.

The deal was expected to give the company access to many more markets and models. Yet the Mitsubishi mess was much worse than expected and put the company's global strategy at risk. The damage was particularly bad in Australia. There was wide spread dissatisfaction with the employee morale at a low point. There was high rate of absenteeism and the company's image in the eyes of the government, public and customers took a beating.

This situation could have been avoided if more emphasis was paid on the cultural aspect and the problems were identified earlier. The internal and intra company problems are generally overlooked by MNCs while targeting global policies. These in turn hurt the company and its finance. A detailed study is required for this purpose and thus the senior management should predominantly be from the region of operation so that employee sentiments and preferences can be...