Mercedes Case Study
The main advantages of the SUB over other models: higher vantage point for drivers, better capacity for towing and more room which makes it a much more attractive option (Geiger). Moreover Subs are considered to offer higher safety level, which is important aspect for the consumer group that Includes families with children.
Compared to the rest of the world, Americans drive much larger cars and pay much less for gas. Opportunity to pay less for gasoline makes Subs more affordable to American consumers rather than its European counterpart.
Mercedes M class was introduced in 1997. In Just 1998 it was awarded as Truck of the Year by Motor Trend Magazine and was voted the 1998 North American Truck of the Year at the North American International Auto Show January 2008 In Detroit. The enthusiasm for the new car was so great that Mercedes-Benz Initially had difficulties In satisfying the anemia, winch Implicates ten success AT ten model mere 1.
2. Place The plant is located on 1,000 acres of land donated by the state of Alabama.
The land was donated as part of the bid, by Alabama, to win the contract with Mercedes (Horopito). Moreover, as it was mentioned in the case, the state of Alabama offered significant help to Mercedes valued at $250 million, which included $90 million in training assistance. The US is the largest market for sport utility vehicles and it already was in 1993 when the plant was built. American consumers appreciate big cars for their size, space inside, safety and off-road operation.
That is why organizing the production of Mercedes M class there meant going closer to the main consumer, minimizing the costs of transportation from Europe. Labor costs in the selected region were also significantly lower than in Germany at that time, which also minimized the total cost of the vehicle. . 3. People According to the case, apart from financial support state of Alabama offered to Mercedes a supply of quality workers.
Although those workers did not have any experience in building cars, Mercedes took it as a two-way opportunity.
First of all it is easier to train people without experience and teach them according to required standards and needs, than retrain experienced ones and force them to adapt to new rules and requirements. From the other side Mercedes could carry out and develop new production and organization methods not typical for German plants. 1. 4. Cultural Competence Cultural aspect plays an important role in strategic planning, especially concerning human resources.
Awareness of cultural differences helps to understand expectations and behaviors of employees and improve the overall quality of organization performance. Starting out in Alabama Mercedes paid significant attention to cultural competence. The company organized the exchange of workers from the United States to Germany and other way in order to transfer valuable knowledge and experience of Mercedes-Benz. To prepare for the effective knowledge transfer exchange workers were given cultural and language trainings in order to adapt to local culture and working environment.
From the other side, the management team itself was international in nature including people from different countries who previously had experience at other international car manufacturers.
Managers with international experience are likely to understand the cultural differences and deal with the problems connected to them. Culture differences may often “pursue counter-productive goals resulting in conflicts and ineffectiveness”. Thus, the challenge for management team is adaptation of these cultures to new ways of how to perceive the work while overcoming ethnocentric (Gillie).
As a result, cultural approach in preparing workers for the new plant was quite effective: quality standards were preserved and improved; the plant in Alabama was expanded and attracted new workers; practices that were used in Alabama were transferred to the new plant in Austria and the workers that were trained became trainers themselves and were moved to share new production methods and working approaches. 2. Role of HER 2.
1 Hiring policy Mercedes focused on adaptability and the ability of individuals in teamwork.
It also appears that Mercedes-Benz is not the first car manufacturer to establish itself in the US. In this sense, Mercedes is able to use the cultural advantage of the American production system alongside the economic advantage of wage cost but international sourcing advantages. 3. 2 Cultural Colonization Mercedes focused on the alignment of culture within the firm.
They chose to do this by not only sending Americans to Germany to gain expertise, but to also understand the cultural context of Germany as a whole and pay for cultural and language training.
Workers were chosen for their adaptability, a key to colonization, and a formal collective approach was taken. 3. 3 Managing Value Difference Concerning the competing value mode, autocracy was the style emphasized. Mercedes took a risk in integrating both cultures collectively, which could have caused value and identity confusion.
Yet it led to entrepreneurial and dynamic outcomes. I nee anneal people walkout experience In Dulling cars, Ana tens sent teem to Germany in order to train them. There, they could give the workers the organization’s values. They chose them according to their adaptability, which is a key to colonization.
Research current Peruvians currently in the company and assess ability of leadership and repatriation 3.
Assess labor pool and initial assessment of country’s skilled labor by city location 4. Invest in Peruvian recruitment firm and integrate within Mercedes’ hiring practices 5. Assess value regarding transfer of Argentinean and Brazilian leadership and HER over hiring within Peruvian talent pool 6. Determine cost effectiveness of German training HER to Peru over price of training Peruvians in Germany a. Use Brazilian/Argentinean training resources to lower investment cost 4.
4 Implementation 1 .
The first stage of strategy would be to develop the external stakeholders within the country in terms of governmental support, institutions, and agencies alongside the connection to the private sector and sources of input. By adding Dominican Republic and Colombia as two additional companies provides competitions to the countries in seeking to provide additional incentives for Mercedes investment into the country hill also serving as a contingency should there be any difficulty in Peru or risks not assessed and to have an exit strategy while not losing full investment within the region. . Within Mercedes if there are currently Peruvians, there might be potential in drafting incentive plans to encourage repatriation to Peru. Within HER, it would be beneficial to have nationals already familiar with Mercedes culture, vision, mission, values, and goals.
Leadership at this level can help smooth the transition for both Mercedes Into Peru Ana Peruvians Into ten German company Ana culture. Assessing the national talent pool sees the ability of unskilled and semi-skilled workers and the overall competencies.
This research allows Mercedes to determine the cost to value ratio of hiring Peruvians and the training costs associated or looking at talent from the neighboring countries within South America and see which will fit the overall objective of the company. 4. Integrating a Peruvian HER recruitment firm to that of Mercedes allows Mercedes to keep the overview and ability to do value based recruitment proceedings while understanding the cultural aspects of Peruvians and owing the right traits and people to select within the hierarchy of Mercedes processes.
In terms of management, Brazil and Argentina share similar cultural backgrounds and have already been adapted within the Mercedes value system. In this regard, these employees might make the best potential management team in terms of reducing costs and the need of centralization regarding sending Germans to lead in Peru. 6. Because Mercedes has Brazilian and Argentinean factories, it is important for Mercedes to determine whether to send Peruvians to Germany to align them toward the company values and operating processes or if Mercedes can plicate this cultural development program locally in Peru.