Gerhard Apfelthaler International Business Studies FHS Kufstein Tirol A-6330 Kufstein Austria

Robert R. Rehder Helen J. Muller Department of Organizational Studies Anderson Schools of Management University of New Mexico Albuquerque, NM 87131-1221

Submitted to: International Management Division

Abstract: As corporate mergers make organizations outgrow their cultural boundaries, transnational companies are increasingly trying to capture the strengths of the best talent and technology that each culture has to offer. The DaimlerChrysler merger foreshadows how people in corporations may change 21^st century work relationships and at the same time raises questions about the complexities of productive collaboration. The components of the award-winning M-Class production in Vance, Alabama/United States originally included German engineering, Japanese lean production, U.S. workers, and an American - German management team, a blend of cultures foreshadowing the DaimlerChrysler (DC) merger. In this paper we analyze the changing nature of the socio-technical processes that produced the prize winning M-Class suburban sports utility vehicle in Alabama and was later transplanted to Austria and integrated into a well established automobile production system. The "learning system" philosophy developed in Alabama in our view is a first step towards successfully using culture as a source of competitive advantage. However, not only that quality problems continue to plague the M-Class as managers and workers find that much improvement is needed in the "learning system", the DC merger also slowed down what has started as an interesting experiment in creating a global corporate culture.

GLOBAL CULTURE AS COMPETITIVE ADVANTAGE?

In today’s highly competitive global marketplace, corporations around the world are faced with increasing complexity. As corporate mergers make organizations outgrow their cultural boundaries, transnational companies are trying to capture the strengths of the best talent and technology that each culture has to offer. Executives seize opportunities to capitalize on the strengths of the best that each culture and its corporations, technologies, and human resources have to offer. In the early 1990s Mercedes-Benz was such a company that was faced with tremendous challenges. The traditional star of the Daimler-Benz group, Mercedes-Benz (MB) began to fade as open markets and Japanese competition in luxury cars eroded sales and diminished profits. In response to the market challenge, MB conscientiously engaged in dramatic restructuring and reorientation in four areas: increased productivity, globalization, new products, and continuous learning. By late 1998, Daimler-Benz/Germany merged with Chrysler/U.S. to become a premier example of the global corporate restructuring and reorientation that is taking place. Now the third largest automobile manufacturer in the world, Daimler-Benz owns 58% of DaimlerChrysler (DC) and is positioning itself to be the powerhouse in charge when the current co-executive top management team reverts to sole executive in the near future. DC may be the world’s first truly global company: it is the product of the biggest takeover in automotive history, an ambitious effort to blend not only two very different corporate cultures operating design and production sites on every inhabited continent and supplying customers around the world (Reier & Sullivan, 1999) but also to consciously use elements from other forms of culture (i. e. national, ethnic, professional) to create competitive advantage.

Before becoming this mega-sized company, MB in the mid 1990s embarked upon a first ambitious experiment to test out its restructuring and reorientation philosophy. The MB project team’s product was the innovative, cross-national collaborative venture to manufacture a sports utility vehicle (SUV) in the U.S. MB chose Vance, Alabama as its first MB North American plant site after a careful selection process. The state-of-the-art assembly plant, known as Mercedes-Benz United States International (MBUSI), became a testing ground for developing a new method of automobile production that integrated traditional German MB superior quality, engineering and training, highly trained U.S. workers, American pragmatism, and Japanese lean production automobile technology. MBUSI’s manufacturing system is a confluence of many different cultural ideologies and different technologies of automotive production that, together, illustrate emerging trends in international manufacturing systems. The multiple award winning M-Class all-activity-vehicle itself was a radical departure from MB’s traditional luxury car. Its sleek design, trend setting safety features including a lower bumper and side airbags (White, 1998), unique 4-wheel drive system, car-like ride and handling, and its reasonable price (for a MB) reflects top management’s philosophical departure to new products, a new customer orientation, and to excel to become the best in its class of vehicles.

The most important aspect of the MBUSI venture, however, is management’s conscious development of a learning field management philosophy that emphasizes continuous self-improvement, mutual learning from different cultures and the transfer of technology to its rapidly changing parent organization (which was MB at the beginning of our research project and which then became DC). As DC globally integrates new cultures, new technology, new management practices, and new production and inventory methods, the learning field corporate philosophy can play a strategically important role in shaping the rapidly evolving corporate culture and its vision of performance and product possibilities and human potentials.

Our paper analyzes the progressing integration of the cross-national and cross-cultural sociotechnical components of the MBUSI management and production system. Our analysis, moreover, reveals that the pathway to produce the best practices in the automotive industry is a highly complex process of continuous human and organizational learning in a multifaceted and dynamic global environment. First, we explain our field study methods and then review the rationale behind the development of the innovative vehicle that necessitated collaboration among two western nations that have different managerial traditions and different approaches to employee and labor relations. We then analyze key elements of the MBUSI hybrid-culture and draw out the national origins of these elements to further understand the tensions in the hybrid model. Next, we appraise the challenges associated with transferring the MBUSI manufacturing system from Alabama to an existing contract-production plant in Austria. In conclusion, we draw out the implications of the analysis regarding the expectations and problems inherent in complex cross-cultural production-systems.

Study Methods

To collect data for our research project, we made site visits to MBUSI in Alabama and to the Austrian Steyr-Daimler-Puch Fahrzeugtechnik (SFT) plant and Eurostar Automobilwerk GesmbH & Co KG plant, a Chrysler joint-venture, in Graz, Austria. In these field visits we studied the communalities and differences in the M-Class manufacturing - assembly process between the U.S. and European operations and, as a result, we gained a deeper understanding of the various players and their roles in the transatlantic corporate relationships. We interviewed key plant managers at these sites, and, in Austria, we spoke with several scholars in Austrian academic institutions. At MBUSI, in Vance, Alabama, we enthusiastically took a test drive of the M-Class SUV with an engineering expert on the high performance test track and we toured the large, modern state-of-the-art training facility, that was built largely with state money, and the impressive Mercedes-Benz U.S. visitor center that includes a history of the company, its technological achievements, and product models. Our earlier studies of automotive manufacturing and assembly plants in Europe, Asia, Mexico, and the U.S. enhanced our sensitivity to the cross-cultural and cross-national technology transfer aspects of our observations and findings.

We collected reports about MB, MBUSI, and DC and reviewed the academic and popular literature pertaining to high performance automobile manufacturing systems and their organizations in Germany, Japan, and, the U.S., including Japanese transplants in the U.S. As our research was to follow the transfer and adaptation of MBUSI technology to Austria, the DaimlerChrysler merger took place. This resulted in a much broader set of organizational factors and issues within which to frame our study. Now the learning field framework, that was developed in Alabama, had major implications for not only the MB parent organization, but a learning field for the new DC global mega-corporation. Such a major unanticipated external event only heightened our enthusiasm for our study.

Learning at the crossroads of cultures

Learning organizations are the subject of much discussion among managers and academics. Garvin (1993) defines a learning organization as "an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights" (p. 80). The best example in the automotive industry of a learning organization is the Toyota corporation (Spear & Bowen, 1999). As the following pages will show, the MBUSI system, in its initial stages, does reflect learning practices; however, it is clearly a work in progress. Whether this corporate philosophy as the fundamental component of its strategy and culture will enable DC, it in the longer term, to be the "best of the best" will be the subject of much interest to managers and researchers.

The point of departure for MB were very tangible problems of increasing competition, declining market share, and diminished profitability in the early 1990s. Quite unusual for MB at that time, the answer was sought in a new and – for MB – somewhat radical approach. For the first time MB not only intended to open a production facility outside of Germany, but it also set out to accomplish a redefinition of automobile production. Being well aware of the fact that such an endeavor would involve different cultures of many kinds, the foundation of this transformation was former MBUSI CEO Andreas Renschler’s belief that cultures (in people, organizations and systems) are significant assets and that culture can be used for creating competitive advantage. This management philosophy is best reflected in Renschler’s (Mercedes-Benz U.S. International, 1998) own words:

Renschler’s own style is intuitive, in part; he looks for "people who are willing to change’…it’s a quality he…can sense after a brief conversation. You can develop very soon a gut feeling about a person…you have to accept your gut" (Ball, 1999, p. B8), he says. This view is also reflected in the fact that from the beginning, top managers had no interest in building a homogenous workforce. They specifically decided to hire exceptional managers from a variety of automobile companies that had expertise in different areas. This included, in particular, Japanese transplants from such companies as Nissan, Honda, Mazda, and Toyota, and innovative U.S. companies such as Saturn, along with other experts from the Big 3. The selection of key managers from Japanese U.S. transplants was deliberately designed to bring expertise in the lean production system to the Alabama plant. The make up of the MBUSI top management team itself symbolizes the European-American collaboration which is the essence of the organization’s technological know-how and corporate culture. The six top managers included three Germans: the former President, the VP for finance, and the VP for research and development, and three Americans: the VP for human resources, VP for purchasing and VP for operations. Following our site visit and after the DC merger, the new MBUSI President, Bill Taylor, the VP for operations and a former Toyota manager, was promoted from within the senior ranks. Other indications of heterogeneity are evident in MBUSI’s hiring of minority and women contract firms for construction and in meetings with the Alabama Black Caucus to affirm the company’s commitment to diversity in the workforce (Lamm, 1997). At MBUSI, about thirty percent of the workers are people of color and thirty percent of the production workers are women.

Nevertheless, it wasn’t only diversity for diversity’s sake that was sought at MBUSI, but more a calculated blend of beliefs and practices from different cultures that top management believed would contribute to its success. These include certain elements from German culture which are continuously infused into MBUSI through the presence of at least 70 German trainers. In the German organizational system, work relationships continue to be influenced by the medieval guild system wherein the "meister" or expert-boss is not necessarily the hero; instead the engineer fills the hero role (Hofstede, 1998). The German worker is a highly trained individual whose well-developed skill, based on training in the apprentice system, establishes his/her expertise in the production process. These skilled workers do not necessarily need a manager to inspire them; they expect their meister-boss to give orders and be the expert in resolving problems (Hofstede, 1998). One reflection of the "meister" system, within MB in the past, was the preponderance of engineers in management. This resulted in predominantly "top-down" decisions and hierarchical work relations that were with workers executing decisions rather than making them.

In contrast to the German organizational system, the Japanese production system as practiced by US-Japanese transplants focus on positional authority and systematic relationships rooted in the pure Toyota production system (Spear/Bowen 1999), such as:

1.work highly specified as to content, sequence, timing, outcome;

2. direct, unambiguous customer-supplier connection;

3. simple and direct pathways;

4. improvements through scientific method through guidance.

Decisions in such transplants are made frequently by well trained problem-solving subordinate groups of employees in specific areas of responsibility and therefore, are based more on group consensus, as in traditional Japanese organizations, than they are in the traditional German system. Recruitment and selection processes involve team-oriented situations and extensive pre-employment screening; intensive training is integrated into plant operations (Doeringer, Evans-Klock & Terkla, 1998). Studies reveal that both Germany and the U.S. lag behind Japan in automotive parts and automotive production productivity (Doeringer, Evans-Klock & Terkla, 1998; Gersbach, 1996); a large part of the difference can be attributed to superior supplier relationships where the supplier more closely adopts the Japanese final assembler sociotechnology (Sako, 1996).

MBUSI is clearly a hybrid organization that is in transition from the hierarchical German "meister" model to the team-based consensus Japanese approach. The superior-subordinate relationship was apparent by the fact that American workers at the MBUSI plant are trained by German "meisters" for very specific tasks in the assembly process, and we saw limited evidence, at that time, of consensus-based problem solving on the production floor. MBUSI is moving, nevertheless, in the direction of the U.S. - Japanese transplant model by training and establishing groups or teams of employees to take on a more team-based problem-solving approach. Such an approach will be important if a functional adaptation of the Japanese lean production system is to be accomplished in the near future. Currently, MBUSI is nonunionized but the UAW is making demands that workers be able to organize and the corporation says that it is open to this prospect.

It is in the area of cultural factors that the cross-national and hybrid nature of the MBUSI organization may be most clear. At MBUSI, there is evidence of both the German and Japanese cultural characteristics. Whereas German individualistic values are reflected in the respect for formal credentials, expertise, and specialization, at the same time (Hall & Hall, 1989; Hofstede, 1998, 1984), Japanese collectivist values are reflected in the emphasis on team development, interpersonal trust, and in consensus-oriented decision making. The organization of the plant’s manufacturing system appears to be moving slowly toward more American-rooted egalitarian relationships with all production workers being organized into "teams," and having the rank designation of "technician," and each person wears uniform shirts in various colors with the MBUSI logo. On the other hand, much of the technician training is being done by German trainers who continue to have the designation of "meister," or by engineers who hold positions of authority by virtue of their expertise and rank.

Both the strong influence of labor unions in Germany and the weaker influence of labor in Japan (with company-based unions) are absent at MBUSI where workers are relatively inexperienced in both union and consensus-based problem solving skills. The latter is on the agenda for additional training according to MBUSI trainers. The lack of union influence coupled with the workers’ inexperience in prior auto assembly work makes the training of workers and their socialization a key element in creating a high performance workforce plus, of course, a key element in socializing them in the MBUSI culture. Table 1 presents some work practices and cultural assumptions that the authors observed at MBUSI and contrasts these with German organizations and U.S. - Japanese transplants.

(place Table 1 about here – see this table at the end of the manuscript)

The Japanese-driven lean production system embodies a highly complex manufacturing system with distinct technology, practices, and philosophy. It is an interdependent, production, technological, managerial, and human resource system. The Japanese lean system and its hybrids, furthermore, are an important component of the international transfer and transformation of organizational and manufacturing systems that is emerging from the globalization of highly competitive world markets. The diverse hybrid variations of the Toyota-developed lean system that are being developed around the world result from the influence of governments, unions, and management, as well as organizational goals, cultures, technologies, and practices. Roth (1997) argues that the majority of German automobile manufacturers follow a hybrid model originally developed by North American Japanese -transplants which he characterizes as having Taylorized group work systems. The German firms’ production and assembly systems aspire to achieve high levels of performance through workers-groups but with very narrow, standardized, belt-dependent, and expert-led patterns of work. Such productions methods contrast with the Japanese-based lean system’s self-organized work group with a high level of task integration and collaborative, Kaizen-driven problem solving processes and high levels of employee motivation.

MBUSI’s goals, as described to the authors, are to move beyond (both Japanese and German and US) Taylorized work group assembly systems. This is to be achieved by a heavy investment in training facilities, careful pre-employment employee selection, autonomous work group training, the continuous learning plant philosophy, and other such factors. The organization, however, has much work to be done to achieve true autonomous work-groups yet it is striving to learn to decentralize decisions and resolve cultural differences in work styles amongst other issues. The main issue to solve will be around the fact that tasks are always negotiable, cultures, however, are not.

At our initial visit to Alabama in 1998, we believed that MBUSI could face some constraints in its effort to move beyond the Taylorized groups because it must respond to the extraordinarily high product demand for the M-Class in North America and Europe. This consumer demand resulted in new M-Class production goals of 110 units per day in 1998 in Alabama, almost twice the original production goal. By 1999, the Alabama plant expected to increase output from the 1998 level of 65,000 units to 80,000 units; already, the wait for U.S. delivery was six to twelve month (Albuquerque Journal, 1998). Such production increases, that resulted in overtime demands of workers in 1998, competed with team training that is essential to achieve real autonomous work teams and necessary time to let the new MBUSI culture develop.

Adapting the Hybrid in Austria

In addition to growing demand in the United States, European customer demand for the M-Class was so great that MB (before the merger with Chrysler) selected an Austrian assembly company in Graz, Austria to produce 30,000 units per year to start in May 1999. Around the time of our site visit to MBUSI, DB specialists arrived in Alabama to study the confluence of cultures and production systems that produced the M-Class in preparation for transferring this technology to Austria. It appeared, at the time, that the technological challenge was to tranfer and integrate the MBUSI sociotechnical manufacturing processes into the Austrian plant by training the highly skilled Austrian workers in the MBUSI process in addition to the Chrysler Operating System (COS) that was in use, and – of course - integrating them into the hybrid culture.

Interestingly, the plant in Graz where the M-Class is assembled already had a contract with Chrysler-Austria to assemble the Chrysler Grand Jeep Cherokee for the European market and with Mercedes Benz to assemble Mercedes E- and G-class models. In this set-up the Austrian company was already used to work at the crossroads of two very different corporate cultures. The challenge that arose at this time was: how to assemble and produce both SUVs in the same plant on the same line with the same workforce, efficiently, and still differentiate the high quality reputation and luxury price of the Mercedes M-Class.

The "M-Class - Grand Jeep Cherokee" factory in Graz is an interesting confluence of cultures, owners, and organizational relationships. It’s corporate entity is Steyr-Daimler-Puch Fahrzeugtechnik (SFT), a 100 year old company, who owns several plants on the same site in Graz, has major customers and cooperative partners including Audi, BMW, Daewoo, DC, Fiat/Lancia/Alfa Romeo, GM, Matra, Opel, Renault, Rover, and Volkswagen. Its lines of business are (1) development of complete vehicles and vehicle components, (2) production of automotive components and systems, and (3) production of vehicles; its sales in 1998 accounted for 838.4 million Euro dollars (Steyr-Daimler-Puch Fahrzeugtechnik, undated). SFT is itself a unit of automotive supplier Canadian Magna International Inc. that is owned by an Austrian immigrant in Canada (Coleman, 1999).

The director of Chrysler-Austria, oversees the DC contract with SFT to produce both the Chrysler Grand Jeep Cherokee and the M-Class SUV. He is, moreover, also the managing director of the Chrysler Voyager-Austria plant (where the COS, a modified Toyota system, is used) which is situated at a site adjacent to the "M-Class - Grand Jeep Cheorkee" plant which is on the SFT grounds. Each of these two sites has a separate gate, offices, and checkpoints from which to enter the factories, yet they exist side by side and share a common fence. Mr. Cash says that assembling both the M-Class and Grand Cherokee SUV vehicles "is a learning experience for us…we can work at synergies on a small level here and see how to use them on a larger level" (Coleman, 1999, p. A18). The "M-Class - Grand Cherokee" plant in Graz is actually the first point of contact in the merger of Mercedes Benz and Chrysler in the production process and as such has been heavily publicized as the midwife for the merger. Ironically, the plant is owned by neither of these two companies - thus the merger in the product production and assembly process is facilitated by a third party - SFT which is neither German, American, nor Japanese. We have constructed a diagram to illustrate the relationships among these various companies (see Figure 1).

(Insert Figure 1 about here – see this figure at the end of the manuscript)

The decision to proceed and tackle the complications of using the same assembly line to build two different vehicles based on two different platforms from two different brands was not an easy one but senior managers felt it to be the least expensive option for getting the M-Class off the ground and for responding readily to the European demand (Coleman, 1999). Assembly of the M-Class and the Jeep Cherokee on the same line seemed to contradict the Mercedes brand purity philosophy, but safeguards are said to be taken to assure that the M-Class is identical to those that come off the line in Alabama (Kisiel, 1999). This task became the responsibility of a German engineer, who lives most of the time in Vance, Alabama, but commutes frequently to Graz. He has a team of production engineers from Alabama on call for both the day and night shift in Graz and several suppliers, also, from Alabama keep a representative on duty in Graz (Chappell, 1999a). The 65 M-Class suppliers for the Alabama plant are the same ones for the Graz operation. All of the supplies, except the German made engines and transmission, are shipped 4000 miles from the U.S. to Austria where the Chrysler-Austria company oversees their delivery on a modified just-in-time basis to the SFT plant. Since Chrysler-Austria was already handling the suppliers for the Grand Cherokee at the SFT plant, it could gear up to handle the supplies for the M-Class plant more quickly than others for this complex system of parts tracking and production control.

When we visited the Graz plant in early July 1999, we observed the color coding on the supplies and the machinery which was correspond to the particular SUV that was currently under assembly: blue and green differentiated the brands. For every four or so Grand Jeep Cherokees, there was one M-Class under assembly and on the same line except for one or two areas where the lines diverged. The same workers worked on both vehicles except for the divergence point. The paint shop handled both SUVs and offered a limited selection of options for the European SUV in comparison to Alabama. Moreover, the M-Class under production was a 4 cylinder vehicle and not the V6 and V8 now available in the U.S., and the sticker price was $10,000 more than the V6 built in Vance. We noted a substantive number of vehicles in the end-of-the-line area that temporarily stopped those with defects. This clearly indicated that, at this early stage in the assembly process, the Graz facility was still working out its quality control issues and it had not incorporated the worker-on-the-line quality control of the Japanese lean system. Production of the M-Class is terms of output of SUVs per week was about half that projected.

What we found unusual in the plant was the automated shifting and rotating of heavy equipment, some of which were robots, to work the production line as the SUVs in alternating brands came down the line. This was all computerized with workers able to stop the line if needed. Workers, moreover, appeared to have a keen awareness about which vehicle they worked on because the parts for each worker station depended on which vehicle was coming down the line and each worker had to handle both parts. Unlike at the Vance plant, in Graz, workers do not wear colored variations of the same brand shirt uniform. This was one indication that the team concept appeared to be a philosophy that was valued, but it did not appear to be implemented to the degree that we found in Vance. At a meeting with the SFT plant manager, Mr. Wolf, and the Chrysler-Austria Director, we learned that one of the key reasons for selecting the SFT plant for M-Class production was that there was slack at the plant and SFT had a reputation for gearing up for automotive production quickly and effectively; they attributed this to their proactive work mentality, their flexibility, and their well-established reputation for dealing with a variety of different contractors. However, one must not conclude from this ability that the M-class SUV production in Graz is in any way a good example for a transfer of the MBUSI hybrid culture into yet another culture. Extending the production to Austria compromised the initial goals of bringing together the best of the best of various cultures to create competitive advantage. The setup in Graz is different from MBUSI in three ways. There is:

1. a different organizational setup: SFT is not a DC owned, but independent plant. As such it has its own corporate culture which is deeply rooted in Austrian culture. The contractual setup prevents DC from carrying their cultural experiment into SFT.

2. a different technical setup: for the first time we see the production of two completely different automobiles on one line. In both SFT’s and DC’s view this tremendous task could only be achieved by taking the focus off the „soft" factor culture, and by concentrating on engineering aspects.

3. a different cultural setup: at the Graz location the separation between the „low cost-hi volume-tight control" Chrysler culture from the „lots of important experts in suits" MB-culture is still very present. SFT, being an independent contractor, has no role whatsoever in bringing these cultures together.

In the 1990s MBUSI started a very valuable experiment by creating a learning field that serves to integrate new cultures, new technologies, new management practices, and new production and inventory methods, and to stimulate problem solving and policy development. By taking key cultural elements from different cultures, such as

1. efficiency from Japanese culture and its Toyota production system;

2. training and socialization from the expert-oriented „Meister" system in German culture; and

3. pragmatism, team-orientation and flexibility from US culture

the MBUSI production system (including the technology and the team-oriented social system) aimed to achieve its intent to be the "best of the best" automotive production system. First in the US, and then to transfer a proven model into yet another country, Austria. The question, now, is whether they succeeded.

When it comes to technology transfer it is apparent that MBUSI’s stated goals are to move beyond Taylorized work group assembly systems in order to develop a U.S. - Japanese transplant lean production system. Progress is being made in this respect and a recent J.D. Power and Associates 1999 report may have helped to spur this on. The M-Class was pegged with 235 problems per 100 vehicles which was more than twice the next highest SUV; interestingly, this report was released simultaneously with the New Product Award from the National Society of Professional Engineers. (Chappell, 1999a). German inspired engineering dominated the design of the M-Class and the German "meister" system with which this design is associated also affects the production process. Quality control is more at the end-of-the-line as in the German system rather than on-the-line as in the Japanese system. To transfer this still-improving-in progress MBUSI system to Austria where workers use a modified COS to produce the Grand Cherokee further complicates the goal of achieving fewer defects. Whether Graz can affect quality improvements more quickly than Vance remains to be seen; the corporate learning philosophy could play a crucial role. One Chrysler manager believes that SFT, already, is more proactive than MBUSI; but whether a third party contractor can work with this philosophy needs to be demonstrated. The supplier chain is another interesting issue in the technology transfer process and this appears, at the moment, to be less of an issue at Graz than vehicle assembly: thus the 4000 miles between sites is effectively managed by MBUSI and Chrysler-Austria to create a modified just-in-time system. But it is also this supplier chain that contributes to the high cost of the Austrian-built M-Class. Such quality and supplier factors are the critical components in keeping DC’s overall average assembly productivity and worker comparison ratios well above the U.S.-Japanese transplants (Woodyard, 1999). Worker comparison ratios are the number of workers each company could shed if it matched Toyota’s benchmark productivity in assembly, stamping and powertrain.

When it comes to personnel issues, a key question for MBUSI in Alabama remains its ability to move beyond the modified German expert-led continuous improvement model to the Japanese group-based Kaizen model, developed by Toyota, as a key element in its hybrid lean production system. As mentioned earlier, performance pressure due to high demand, may complicate time needed for additional training of workers in problem-solving processes. At the same time that MBUSI is learning to improve its own hybrid lean production processes, its managers are attempting to integrate its sociotechnical system into yet another workforce in another country with its own cultural complexity and within a well established company whose workers are already assembling a very different SUV. The Austrian labor unions and their reactions to and willingness to adapt worker requirements especially on-the-line responsibilities may also affect production efficiency and quality.

In order to have employees move among various units so that technology transfer and learning with its corporate structure can occur, DC is trying to develop and offer creative incentives to get its workers in Europe and America to go abroad. The problem seems to be more with the Americans going to Europe: Americans have less experience going overseas and hold just as many stereotypes against Germans as Germans hold against Americans. Stereotyping and communication problems can be major impediments to people’s successful cultural interface and socialization. So far the Germans are doing a better job at embracing the American culture (Henry, 1999) than vice versa.

The key to Toyota’s success has been its ability to resolve its paradoxical system: activities, connections, and production flows are rigidly scripted, yet its operations are enormously flexible and adaptable; workers are constantly being challenged to higher levels of performance to enable the company to continually innovate and improve (Spear & Bowen, 1999). Because Toyota is truly a learning organization with workers learning from a socratic-like method, it models an automotive production organization toward which DC’s learning field framework may aspire. DC’s paradoxical roots in fundamentally different organizational cultural components - the German which is inherently inflexible, and the U.S. Japanese transplant - which is inherently flexible, are its greatest challenge as well as its greatest asset in developing the goal of becoming the "best of the best."

It has been suggested in many reports that - because of its emphasis on a learning field framework and the quest for innovation that is demonstrated in the M-Class features – the MBUSI experiment may be a model for other parts of the DC mega-corporation. After all, the former CEO of MBUSI, Andreas Renschler, because of his success at MBUSI was given the task of "blending the international management of the combined companies" and to "begin integrating Daimler-Benz AG’s often conservative, century-old German traditions with Chrysler Corp’s less formal, sometimes corner-cutting American ways (Chappell, 1998b, p. 8)." If one looks at the facts, however, the future role of the MBUSI as a template for success based on cultural competitive advantage is bleek mainly because of:

1. overwhelming demand, quality problems, and the post-DC merger syndrome all drain the original experiment in Vance, AL of its energy and perspective.

2. the fact that DaimlerChrysler stopped / slowed down further development of the great experiment in culture as competitive advantage which it started in Vance: Austrian production was never intended top be either an example for cultural synergy or a good midwife in the DaimlerChrysler integration. The Graz production lies with an independent sub-contractor and not with a DC plant.

At this point in time of our study we foresee two possible future developments. First, DC may realize that it has started yet another experiment in Graz/Austria. There it is not only redefining the Toyota production system, but it is also making the first step away from the traditional automobile manufacturer it was in the past and transforming itself into a Dell-like consumer goods marketer. Or, secondly, DC again recognizes the value of the MBUSI experiment and makes another conscious attempt at extending this model for using the best of the best of various cultures for creating competitive advantage. Our research and the close attention that MBUSI received in the world of automobile production have convinced us that MBUSI has the potential to become a template for the complex cultural integration of divergent organizations like Daimler-Benz and Chrysler and, moreover, a sample of global corporate culture as a competitive advantage.

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Table 1

Adapted from: Lisa Hoecklin (1997) Managing Cultural Differences: Strategies for Competitive Advantage. Wokingham, England: Addison-Wesley Publishing Co. & J. Lawrence French (1995) Japanese and German Human Resource Practices," in Advances in International Comparative Management, Vol. 10, pp. 201-226. JAI Press, and from interviews with MBUSI personnel in Vance, Alabama.