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This case study analyzes the crisis faced by daimler ag in china following an incident involving the ceo of daimler trucks and buses china. It examines the impact of the incident on the company's reputation, market share, and stakeholder relationships. The study then evaluates various strategic options for mitigating the situation and proposes a comprehensive action plan, including immediate termination of the ceo, public apology, cultural sensitivity training, and community engagement programs. Valuable insights into crisis management strategies and the importance of cultural sensitivity in international business.
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Submitted in partial fulfillment of the requirement of the course WRITTEN ANALYSIS AND COMMUNICATION (WAC) Submitted to Prof. Dr. Urjani Chakravarty Submitted by: Mr. KOUSTUBH BHUJANG HIRE Mr. KARTIK MORE Class: C Roll No: MBA/3061/ Roll No: MBA/3076/ On 2 nd
Indian Institute of Management Bodh Gaya PGP 2024-
To: Mr. Robert Veit Director of Mercedes-Benz Truck Overseas From: Koustubh Bhujang Hire Subject: Comprehensive analysis and recommendations to Daimler Trucks and Buses China. Dear Mr. Veit, I am writing to express my intent to provide a comprehensive analysis and actionable recommendations for addressing the recent incident involving Rainer Gärtner, CEO of Daimler Trucks and Buses China Ltd. The incident has caused significant reputational damage to our brand in China, a critical market for our operations. Our objective is to implement strategic actions that will restore public trust, enhance cultural sensitivity within the organization, and ensure alignment with Daimler's core values of respect and integrity. Through this report, we aim to turn this crisis into an opportunity for positive change and reaffirm our commitment to the Chinese market. Thank you for entrusting me with this important task. I look forward to presenting our findings and collaborating on the best course of action to improve our current situation. Sincerely, Koustubh Bhujang Hire Consultant
1.Situation Analysis Incident Summary : o What happened : Rainer Gärtner, CEO of Daimler Trucks and Buses China Ltd., was involved in a heated dispute over a parking space that escalated into him allegedly using racially charged insults and pepper spray, resulting in physical injury to a bystander. o Immediate aftermath : The incident was captured by witnesses and quickly spread across social media, sparking widespread outrage and calls for boycotts of Daimler products. Impact on Business : o Stock market reaction : Following the incident, Daimler’s share price began to decline, underperforming in a generally stable or positive market. o Brand image : The event negatively affected Daimler’s reputation, particularly in China, where calls for boycotts from a significant consumer base threatened future sales and market position. Stakeholder Reaction: o Public response : The Chinese public expressed deep disappointment and anger, particularly on platforms like Weibo, where the story gained extensive traction. o Media coverage : The incident was covered globally by major news outlets, amplifying the reputational damage and increasing the pressure on Daimler to respond. o Internal stakeholders : The potential unrest among employees and management within Daimler, especially in multicultural teams, could impact internal morale and global operations.
2. Problem Statement
The incident involving Rainer Gärtner has precipitated a severe reputational crisis for Daimler in China, necessitating immediate and strategic actions to prevent long- term damage to the company’s market share and brand image.
3. Options The options available to Daimler include: Immediate Termination of Rainer Gärtner : Dismissing Gärtner could signal taking responsibility and a desire to change. Public Apology from Senior Management : This could help mitigate the impact of the incident and begin repairing trust. Cultural Sensitivity Training : Implementing comprehensive training for all executives and staff in China. Community Engagement and Partnerships : Collaborating with Chinese cultural organizations to improve community relations. Intensive PR Campaign : A campaign to positively reinforce Daimler’s commitment to China. 4. Criteria for Evaluation The options for addressing the crisis will be assessed based on the following criteria: Effectiveness in Repairing Reputation : Measures the potential of each option to restore and improve Daimler's public image and consumer trust in the Chinese market. Cost : Considers both the financial implications and resource allocation required for implementing each option. Implementation Speed: Evaluates how quickly each response can be
Community Engagement Programs: Engaging with cultural organizations to build goodwill and better local relationships. o Effectiveness: Moderate to high o Cost: High o Speed: Medium o Sustainability: Moderate o Risk: Moderate (depends on public reception) 6.Recommendation It is recommended that Daimler adopts a multi-faceted approach to ensure both immediate and long-term benefits: Immediate Actions: Terminate Gartner and issue a public apology to demonstrate accountability and remorse. Long-term Strategies: Implement cultural sensitivity training and initiate community engagement programs to rebuild trust and improve internal corporate culture.
7. Action Plan Implementation Immediate Actions: Week 1: Termination of Gartner and a public apology via major media outlets in China, along with an initial press release explaining the steps Daimler intends to take moving forward. Long-term Strategies : Month 1-3: Develop and launch cultural sensitivity training for all staff in Daimler’s China operations. Month 3-6: Establish partnerships with key Chinese cultural organizations and begin collaborative community projects. Ongoing : Regular monitoring of public response and adaptation of PR strategies based on feedback and changing market dynamics.
8. Contingency Plan Should there be continued backlash or escalation of negative sentiment: Reshuffle the Senior Management: Bring in new leadership in China if necessary to refresh the organizational cultural and public image. Conduct an International Audit: Review and possibility overhaul company practices and culture to ensure compliance with global standards of conduct and sensitivity. 9. Exhibits Graph of Daimler’s Share Price: Illustrate the impact of the incident on Daimler’s financial performance. Timeline of the Incident and Response Actions: Detail key events and company responses to provide clarity on the sequence and timing of actions taken. Survey Data on Consumer Attitudes: Present recent survey data reflecting Chinese consumers’ perception of Daimler before and the incident to gauge the effectiveness of implemented strategies.
