The Chrysler Group

Introduction

The Chrysler Group is an American automobile manufacturer founded by Walter P. Chrysler nearly a century ago.  Throughout its existence, Chrysler has produced innovative vehicles and has become one of the top American automobile manufacturers in the nation.  In recent years, the American automobile industry has faced stiff competition from both national and international car makers.  This stiff competition led Chrysler executives to change their focus to price and sales rather than maintain the quality advantage that led their founder to create the company.  Mismanagement at all levels of the company cried for a leadership change that needed to start from the top.  In 2008 Sergio Marchionne, whose past preceded him as the CEO who revitalized Italian car maker Fiat, was appointed the CEO of Chrysler Group.  This case study identifies some of the strategic decisions made by Marchionne to do the same for Chrysler.

Question 1: What are the observable artifacts, espoused values, and basic assumptions associated with Chrysler’s culture?

Observable artifacts are the physical manifestations of an organization’s culture (Kreitner & Kinicki, Organizational Behavior, 2013).  Chrysler’s culture has been around for nearly a century and has had some time to create observable artifacts.  In the article^[a][b], “Marchionne Upends Chrysler’s Ways”, the artifacts that appear are price cutting, rebates, incentives, and carrying on in the status quo producing mediocre vehicles.  Sergio Marchionne aimed to change those entrenched with the old culture by imposing new values.  The article also identified that Marchionne laid out some new espoused values in meetings that include improvements to margins and vehicle quality as well as better pricing controls.  In addition to those values, Chrysler’s website states the following as core values of the business (www.chryslercareers.com, 2014):

• We are a meritocracy.
• Leadership is a function of leading change and leading people.
• We embrace and cherish competition.
• We aim to achieve best-in-class performance.
• We deliver what we promise.

Core values can morph in a culture.  When they do, they become basic assumptions.  The basic assumptions of a culture evolve over time and have a way of becoming something other than the original intended value. In Chrysler’s case, a basic assumption arose that in order compete and sell cars, they must slash prices and give additional incentives for consumers to purchase their vehicles.

Question 2: How is Marchionne trying to improve the PE fit of his direct reports?

The PE fit that Sergio Marchionne implemented when he took over at Chrysler Corporation changed dramatically from his successor. PE fit is described as “the compatibility between an individual and a work environment that occurs when their characteristics are well matched (Kreitner & Kinicki, Organizational Behavior, 2013).” Mr. Marchionne has done several things to change the culture at Chrysler to fit his vision including ousting several veteran executives who did not agree with his vison for the future. Sergio held many short meetings with executives when he took over to find out who was willing to help him change the business model at Chrysler to a model that would be more profitable. Mr. Marchionne looked for his direct reports from other areas within the organization and often times promoted junior executives one or two levels because they were willing to work with his vision for the company (Kreitner & Kinicki, Organizational Behavior, 2013). At one point, Marchionne held a meeting with his direct reports to identify people in all ranks of Chrysler for future talent that could one day help lead the company (Muller, 2011). The changes Mr. Marchionne implemented to change the culture at Chrysler have helped the company become profitable and pay back its tax payer bailout.