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INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

End-Spring Semester 2017-18

Date of Examination: 25/04/2018 Session: 2-5 PM (AN) Duration: 3Hrs Full Marks: 100

Subject No.: BM61010 & BM60012 Subject: Strategic Management

Department/Centre/School: VINOD GUPTA SCHOOL OF MANAGEMENT

Specific charts/graph paper/log book etc., required: No

Special Instructions (if any): None

Question 1 (case study) is compulsory. Answer any five (5) from the rest (Q2-Q7)

Questions

1. Read the case given on the next page and answer the followings:(a) Diamler-Benz and Chrysler Corporation, two of the world's leading car manufacturers,

merged sometime back. Describe briefly the culture of Diamler-Benz [6](b) Describe briefly the culture of Chrysler Corporation [6]

(c) Give your opinion on what culture the merged entity should follow to succeed incompetitive automobile industry? [8]

2. "Does structure follow strategy or strategy follows structure?" Discuss. [4]Discuss the following organizational structure: (a) Functional (b) Matrix, and (c) Productdivision mentioning their advantages, disadvantages and suitability for strategy/environment.[12]

3. What are the distinctive features of the Mckinsey 7-S Framework? [8]Define "leadership". "Good leaders are scarce"- what factors affect the supply of goodleaders? [2+6]

4. What are the main roles, responsibilities and power of the Board of Directors (BoDs)? [8]What are the four basic styles of Corporate Strategic Management? Explain briefly. [8]

5. What is social audit? Why should companies undertake social audit? What are the differenttypes (or framework) of social audits? Explain briefly. [2+4+ 10]

6. "Like any product, technology has distinct phases in its life cycle." What are these phases?Explain briefly along with associated cost curve for each phase. [8]What are the two main routes for technology up-gradation? What are the key factors to beconsidered for deciding these two options? [8]

7. Define knowledge management. "Successful implementation of Knowledge Managementrests on three essential strategies." Describe these strategies. [4+ 12]

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Case Study (refer to Question 1)

In May 1998, Daimler-Benz and Chrysler Corporation, two of the world's leading car.manufacturers, agreed to combine their businesses in what they claimed to be a"merger of equals." The merger resulted in a large automobile company, ranked thirdin the world in terms of revenues, market capitalization and earnings, and fifth in Utenumber of units (passenger-cars and commercial vehicles combined) sold. DCXgenerated revenues of $155.3 billion and sold 4 million cars and trucks in 1998.Schrernpp and Eaton jointly led the merged entity, as co-chairmen and co-CEOs.

. - . .

DCX's success depended on integrating two starkly different corporate cultures.Daimler-Benz was characterized by methodical decision-making' while Chryslerencouragedcteativity. Chrysler. valued efficiency, empowerment, and fairly. egalitarian relations among still; whereas Daimler-Benz seemed to value respect forauthority, bureaucratic precision, and centralized decision-making. These culturaldifferences soon became inanifest in the daily activities of the company.

'Another key issue at DCX was the differences' in pay structures between the two pre-merger entities. Germans disliked huge pay disparities and were unlikely to accept anysteep revision of top management salaries. But' American CEOs were rewardedhandsomely: .: Eaton earned a total compensation of $10.9' million in 1997.Complications would arise. if an American manager posted at Stuttgart' ended upreporting to a German manager who was earning half his salary. Chrysler could cutpay only at the risk of losing its talented managers. ...

Germans and Americans also had different working styles. The Germans were used tolengthy reports and extended discussions .. On the other hand, the Americansperformed little paperwork and liked to keep their meetings short. Americans favoredfast-paced trial-and-error experimentation, whereas Germans drew up painstakinglydetailed plans and implemented them precisely. In general, the Germans perceived theAmericans as "chaotic" while the Americans felt that the Germans were stubborn"militarists." . .. '.. .

Chrysler' managers believed in spotting opportunities and going for them. However,post merger; they were trapped in. the Germanstyle of planning, constantly being toldwhat to do .. Steve Harris, Chrysler's former communications chief (who defected toGeneral Motors) commented, "The Germansplayed literally by the book-theirs.You'd go into a meeting and have to turn to Volume 7, Section 42, page 597." TheGermans prided themselves on! analytical research that produced a 'plan, while theAmericans reached for the impossible and kept coming up with new ideas to achievethese "impossible" goals.

Before the merger, Daimler-Benz was known for its top-down management approach.Chrysler, by contrast,seemed to be . a humble collection of colorful consensusmanagers. DCX claimed that the merger process would be complete in twelve months.However, analysts felt that the authoritarian German management methods wouldprove foreign to the non-hierarchical style at Chrysler making the. integration of thetwo cultures difficult. . ...

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