The Daimler Chrysler Commercial Vehicles Division
On Monday, November 16, 1998, the day before Daimler-Benz would officially merge with Chrysler, Dr. Kurt Lauk, head of Daimler-Benz' commercial vehicles division (CVD) reflected on the organizational changes he had directed over the course of the previous two years to make CVD more competitive in an era of industry-wide globalization. To unite an extremely decentralized organizational structure at Daimler, Lauk initiated a worldwide reorganization and the integration of the company's manufacturing operations. He encouraged individual units within CVD to look for collaborative opportunities that would enable the division to realize global scale economies. Although Lauk promoted a global perspective within CVD, he believed that the business units could compete effectively only if they were allowed considerable autonomy to respond to their own unique market conditions. Lauk was proud of the achievements resulting from these directives. However, pressing concerns overshadowed his satisfaction. Although the CVD was profitable overall, its Power Train Unit continued to lose money. In addition, Lauk was concerned about Daimler's progress in building adequate distribution channels in the Asian region. Finally, Lauk considered the impact of the merger with Chrysler on CVD and the general uncertainty concerning how a more centralized organization would affect the CVD.