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DaimlerChrysler Knowledge Management Strategy

Summary

This paper discusses the famous merger between Daimler and Chrysler in the year 1998

which led to the creation of a highly exhaustive knowledge management program in the

merged firm that was central to its success. The paper starts with a brief discussion on what

knowledge is followed by a visit to the past to see what led to the merger and the results

that followed. Transformation of data to knowledge is a systematic process and knowledge

is often not scientific but tacit in nature. The preservation and development of the

knowledge is very important for the firm which gives it a competitive edge over others.

Unlike objects, knowledge grows with time and usage and has almost zero marginal cost

hence research spent on acquirement of knowledge is lessened. Knowledge management

programs develop an efficient system for knowledge storage and sharing the developed

tacit to explicit knowledge as and when desired. The role of IT in knowledge management

programs is enormous which includes creation and execution of database management

system, communication system and secure browsing.

The paper then talks briefly about the history of Chrysler prior to the merger in 1998. In the

beginning Chrysler had lots of cutbacks but, Chryslers 3 step process to get back to a

position of strength and became very skilled at discovering and serving niche markets with

the innovation. Daimler on the other hand had problems with creative innovation as they

were players in the luxury car market with their Mercedes A class cars and suffered heavy

losses in 1995 to the tune of 5.7 billion. The merger happened in the year 1998 and merged

one immediately became the 5th

largest car company in the world which combined

Chryslers expertise in innovation and a strong North American presence with Daimlers skill

in engineering and manufacturing combined with its presence in the upscale segment of

North America, Europe and Asia. The mergers strategic objectives focused on global

overcapacity, understand and better serve the changing market and to control the rising

costs of the business and identified knowledge management programs as central to the

merger.

The post-merger integration program (PMI) focused on 2 things; transfer this knowledge

among the firms and new program on resolving management issues. DaimlerChrysler aimed

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to survey and identify various domains of knowledge, i.e. critical expertise areas and then

aimed to build a repertoire of such knowledge and to build a platform to securely share

them. Special emphasis was laid on this knowledge management system meeting the needs

of the weak parts of the organization. When compared to the same program at Ford, they

had managed to diffuse it very effectively along the organization. General Motors had

created a General Motors university to transform the company into an organization that

encouraged learning Toyota focused on centralized information gathering with heavy

emphasis on personal contact. General Electric focused on globalizing its knowledge with a

structure of cross business councils. Siemens had a corporate level knowledge management

program.

DaimlerChrysler found that its knowledge management program was very comprehensive

but scattered. When compared to the same program at Ford, they had managed to diffuse it

very effectively along the organization. General Motors on the other hand had created a

General Motors university to transform the company into an organization that encouraged

learning. It created centers of knowledge and the best practices were discussed and shared

on the intranet. Siemens had a corporate level knowledge management program. Toyota

had no formal knowledge management program. Instead, it focused on centralized

information gathering with heavy emphasis on personal contact. General Electric focused on

globalizing its knowledge with a structure of cross business councils to find best practices in

marketing, sales, manufacturing, technology, six sigma etc.