How Tom LaSorda transformed Chrysler’s Communication | Môn Organizational behavior - Đại học Kinh Tế Quốc Dân

lOMoAR cPSD| 58675420
NATIONAL ECONOMIC UNIVERSITY
SCHOOL OF ADVANCED EDUCATIONAL PROGRAM *** ASSIGNMENT REPORT
HOW CHRYSLER’S TOM LASORDA LEARNED HOW TO TALK TO EMPLOYEES
Instructor: Assoc. Prof. Dr. Pham Thi Bich Ngoc GROUP:
1. Trần Phương Anh - 112107788
2. Trần Thị Vân Anh - 11219660
3. Ngô Ngọc Bích - 11210941
4. Hà Bảo Linh - 11219717
5. Lê Hà Phương - 11214761
6. Hoàng Minh Tùng – 11216114 HANOI, 2022 lOMoAR cPSD| 58675420 TABLE OF CONTENTS
EXECUTIVE SUMMARY ..................................................................................................... 2
1. ABOUT CHRYSLER ......................................................................................................... 3
1.1. Overview of Chrysler ..................................................................................................... 3
1.2 Brand’s history .............................................................................................................. 3
1.3 The Chrysler’s brand commitment .................................................................................. 4
1.4 Chrysler’s Achievement .................................................................................................. 4
1.5 Chrysler’s Awards and Accolades .................................................................................... 4
2. CASE STUDY: HOW CHRYSLER’S TOM LASORDA LEARNED HOW TO TALK TO
EMPLOYEES ....................................................................................................................... 5
2.1 Case summary ............................................................................................................... 5
2.2 Problem & Cause .......................................................................................................... 5
2.3. Question 1: In what ways can face-to-face communication between managers and
employees help them to develop better ways to reach a common understanding? ...................... 6
2.3.1 Case study analysis ................................................................................................. 6
2.3.2 Question answering ................................................................................................ 7
2.4: Question 2: What kinds of issues between managers and unions might be better handled
through other communications media such as written communication? .................................. 8
2.4.1 Case analysis .......................................................................................................... 8
2.4.2 Question answering ................................................................................................ 8
2.5 Topics in Organizational behaviors are applied in Chrysler’s case study ....................... 10
2.5.1 Communication function theory ............................................................................ 10
2.5.2 Elements of organization’s structure: centralization & decentralization ................... 11
2.5.3 Leadership theories ............................................................................................... 11
2.5.4 Motivating factors: ................................................................................................ 11
2.6 Recommendation ......................................................................................................... 11
2.6.1 Providing accurate and timely information ............................................................. 11
2.6.2 Giving feedback and responding immediately to employees' comments ................... 12
2.6.3 Choosing communication channels smartly ........................................................... 12
2.6.4 Building a centralized structure internally ............................................................. 13
2.6.5 Choosing managers satisfying criteria of leadership behavior ................................. 13
2.6.6 Having support policies for employees ................................................................... 13
3. CONCLUSION ................................................................................................................ 14
4. REFERENCES ................................................................................................................ 15 lOMoAR cPSD| 58675420 EXECUTIVE SUMMARY
Chrysler is famous for brand’s innovative in automobile manufacturers in the
United States. During the 1990s, it witnessed an extreme deterioration in their
performance. The reason for that situation is that Chrysler underestimated the vital of
communication in the workplace. Many laborers of the company and the trade unions
that represent many of them were not provided adequate information about current
problems of the company and future plans as well. Furthermore, its “ivory tower
approach” led top decision makers to remain isolated from what was going on in their
plants; the majority employees claimed that they had been kept in the dark as
announcements about their firm came from spokespeople reading prepared scripts. In
order to solve this problem, Chrysler appointed Tom Lasorda to come up with new ideas
about communication between managers and workers. This report will shed light on the
Chrysler’s case study, answer two main questions about oral communication and other
methods of communicating (such as written communication) and demonstrate what
kinds of theories related to Organizational Behavior subject have been applied. Last but
not least, the report will show recommendations and conclusions.
Keywords: Chrysler, communication, face-to-face communication, written communication,
leadership theories, centralization & decentralization, motivative factors lOMoAR cPSD| 58675420 1. ABOUT CHRYSLER
1.1. Overview of Chrysler
Stellantis North America (officially FCA US and formerly Chrysler) is known as
one of the "Big Three" automobile manufacturers in the United States, which its
headquarter located in Auburn Hills, Michigan.
Chrysler is a subsidiary of the multinational automotive company Stellantis that
invented the minivan and continues to stand for innovation, efficiency and functionality.
In addition to the Chrysler brand, Stellantis North America sells modes of transport
worldwide under the Dodge, Jeep, and Ram nameplates. It also includes Mopar, its
automotive parts and accessories division, and SRT, its performance automobile division.
1.2 Brand’s history
The Chrysler Corporation was established in 1925 by Walter Chrysler from the
remains of the Maxwell Motor Company.
Chrysler quickly acquired control of auto companies in France, Britain, and
Spain in the 1960s. The company experienced some challenges in the 1970s, when the
economy changed, there were more American competitors, and new safety,
environmental regulations were put into place. Dodge and Plymouth cars will now be
sold under the Mitsubishi name in North America. This partnership was found quickly
and smoothly. In the late 1970s, on the verge of bankruptcy, however, it was saved by
$1.5 billion in loan guarantees from the U.S. government. Lee Iacocca was the new
CEO of a company in the 1980s. He was credited with helping the company return to
profitability. In 1985, a new company called Diamond-Star Motors was formed. This
was a collaboration between Chrysler and Mitsubishi, and it helped expand their
relationship. Chrysler acquired American Motors Corporation (AMC) in 1987. This
made the Jeep brand part of Chrysler's business, which was already successful. In 1998,
Chrysler and German automaker Daimler-Benz merged to create a new company called
DaimlerChrysler AG. This merger was not popular with many investors, who thought it
was a risky decision. Chrysler was sold to Cerberus Capital Management in 2007. The lOMoAR cPSD| 58675420
company was renamed Chrysler LLC. After Daimler divested Chrysler in 2007, the
company operated as Chrysler LLC for a few years and then as Chrysler Group LLC
for a longer period of time. In 2014, Fiat S.p.A. acquired Chrysler and made it a
subsidiary of FCA. In 2021, Chrysler is a subsidiary of
Stellantis, which is the result of the merger between FCA and PSA Group (Peugeot Société Anonyme).
1.3 The Chrysler’s brand commitment
The Chrysler Brand has always strived to be a leader in the future of mobility
and will continue its commitment to sustainability with a unified effort to be fully electric by 2028.
1.4 Chrysler’s Achievement
United States sales: one of the "Big Three" American automakers is Chrysler
(Stellantis North America, Ford Motor Company, and General Motors). FCA US sold
slightly more than 1.8 million cars in 2020.
Global sales: According to US new best cars in 2022, Chrysler was the 2thlargest
automobile manufacturer in the world. April 1, 2022 , Windsor, Ontario - FCA Canada
today reported first-quarter 2022 total sales of 42,587 vehicles.
1.5 Chrysler’s Awards and Accolades
In 2022, the company received many awards, reinforcing their position in its market.
- The 2022 Chrysler Pacifica has achieved a 5-Star Overall Crash Safety Ratin
- The 2022 Chrysler Pacifica Limited was named a Best Interior of 2022 Under $50,000 by Autotrader
- The 2022 Chrysler Pacifica is one of the Best Family Cars of 2022 according to Kelley Blue Book’s KBB.com
- The 2022 Chrysler Pacifica was named an IIHS Top Safety Pick. lOMoAR cPSD| 58675420
2. CASE STUDY: HOW CHRYSLER’S TOM LASORDA LEARNED HOW TO TALK TO EMPLOYEES
2.1 Case summary
Chrysler has been blamed for the failures in conveying current situations and
further goals for their employees and the organizations which represent them. Worse,
all the superiors were isolated from what was happening in their manufacturing plant,
and the employees felt abandoned while working in this period of time because they
could only receive the company statements from a well trained spokesmen.
In the 2000s, the main company's concern, which is a rambling connection
between the executives and their workers, was solved by plenty of efforts from the
company to bring the managers and employees closer to address the problem. Chrysler
took necessary actions to strengthen the collaboration by giving promotion to managers
who follow closely the conditions of the remaining workforce.
Tom LaSorda — Chrysler’s top executive responsible for manufacturing,
employee relations, global business development, alliances, etc. — was appointed to his
current position in August 2007. With his brilliant leadership, he led Chrysler through
many challenges, despite the loss of benefits caused by the 2008 recession and had
helped the company lay the foundation for the future.
2.2 Problem & Cause Problem:
Inadequate communication between employees and Chrysler companies about
current problems: The management was slow in responding to external and internal
changes since the system in place was meant to ensure stability.
Unobvious future prospects for employees: Chrysler agreed to change work
practices by laying of 54,000 employees that resulted in decreasing operating costs and
they found ways to lower healthcare costs. Cause: lOMoAR cPSD| 58675420
The "ivory tower strategy" used by Chrysler, which results in managers being cut
off from their workforce and failing to inform them of current issues and future goals.
Chrysler layoffs of white collar workers have dumped about 300 people withhis type of
training on the job market, making it difficult for him and the others like him to find work.
Employees often felt they were kept in the dark as announcements about their
company lead to wide gulf between Chrysler managers and employees - it contributed
to the company’s deteriorating performance during the 1900s.
In conclusion, that is acceptable given the fact that Chrysler struggled in the 1990s
despite their many prior accomplishments. They also carried out some solutions to address problems:
+ Promote managers who understand the concerns and problems facing its workforce.
+ Invite Tom Lasorda to share and communicate with employees
+ Chrysler provides major funding, new training, education, and severance benefits to laid-off employees.
2.3. Question 1: In what ways can face-to-face communication between managers
and employees help them to develop better ways to reach a common understanding?
2.3.1 Case study analysis
In any business, face-to-face communication is the key to success. Once
communication is not taken seriously, failure is only a matter of time.
Employees at Chrysler constantly receive notifications from spokespeople hired
by the company, who read pre-written scripts carefully and mechanically. It makes
employees feel that the information received is no longer important because it is not
coming from the superiors they work with on a daily basis,
After realizing the detrimental effects of a lack of communication between
management and employees, Chrysler made a brilliant decision to turn the situation around. lOMoAR cPSD| 58675420
They appointed Tom LaSorda - who has first hand knowledge about the feelings
of car workers when thousands of them were losing their jobs because of intense global
competition and has many generations of working for the company and the position of
CEO. After taking office, Tom has focused on communication between employees
more, making up for the shortcomings of the former employees who were unfortunately
fired and the employees who are still accompanying them.
Therefore, face to face communication is a way for businesses to have dedicated
and unanimous employees to move the business forward.
2.3.2 Question answering
Face-to-face communication is very effective at work, if the receiver is unsure of
the message, rapid feedback allows the sender to detect and correct it quickly. Therefore,
the possibility that employees miss important information is also reduced.
Every employee is aware that, understanding the requirements assigned from the
superior, the new working efficiency is guaranteed. Talking and communicating directly
between the parties will make this easier, and the manager can also give suggestions
and give timely feedback to ensure the working process is not difficult and challenging.
Tom used this method to better understand his employees and also listen to their
opinions to improve the business.
Furthermore, video conferences and online meetings are also effective ways for
businesses to transmit information and feedback to their employees. Online meetings
can be used anytime, whenever everybody is in different regions and still make sure that they get all the information.
In short, direct communication is also a way for people to express their emotions,
help managers and employees find common ground, promote trust and be happy and feel comfortable at work. lOMoAR cPSD| 58675420
2.4: Question 2: What kinds of issues between managers and unions might be better
handled through other communications media such as written communication? 2.4.1 Case analysis
Lasorda reassured Chrysler troops. A model of media richness helps explain
channel selection among managers. The choice of channel depends on whether the
message is routine. Routine messages tend to be straightforward and have minimal
ambiguity; channels low in richness can carry them efficiently. Nonroutine
communications are likely to be complicated and have the potential for
misunderstanding. Managers can communicate them effectively only by selecting the
appropriate channel for the message. Chrysler’s method of operation may yield the most
receivers and help to unite the group members, but it is the least effective in terms of
“information saturation” and richness.
2.4.2 Question answering
Face-to-face communication is a method which is time-consuming yet but has a
high information density. Oral communication is typically preferable when messages
are critical and the sender is unsure whether a written message will be understood. But
it cannot be denied that a major disadvantage of face to face communication surfaces
whenever a message has to pass through a number of people is that the more people, the
greater the potential distortion. Each person interprets their messages in their own way.
The message’s content, when it reaches its destination, is often very different from the
original, even when we think the message is simple and straightforward. Therefore, face
to face communication “chains” are generally more of a liability than an effective tool in organizations.
Written communication holds great importance in today’s business world. It
involves creativity and innovative ideas of the mind. It is necessary for business owners
and managers to develop effective written communication skills and encourage the
same in the employees as well. Effective written communication is essential for
preparing valuable promotional materials for business development. Effective writing
involves careful choice of words, their organization in the right manner in sentence
formation as well as the cohesive formation of sentences. Written communication lOMoAR cPSD| 58675420
includes letters, e-mail, instant messaging, organizational periodicals and any other
method that conveys written words or symbols. Written business communication today
is usually conducted via letters, PowerPoint, e-mail, instant messaging, text messaging,
social media, apps and blogs. We are all familiar with these methods, but let’s consider
the unique current business communication applications of them.
Written communication is often used as a reference. It can be used as a
controlling tool for controlling the activities of the organization. The recipient of the
information gets sufficient time to think, act and react. In the case of long-distance
communication and repetitive standing orders, written communication is very useful. It
is suitable for long distance communication and repetitive standing orders. It creates the
permanent record of evidence. It can be used as a legal document. It can be sent to many
people at a time. It is suitable for sending statistical data, charts, diagrams, pictures, etc.
Order, allocation of work, job distribution, etc. in written form reduce ambiguity and
help in fixation of responsibility. Uniformity in work procedure can be maintained
through written communication. It is easy to send unpleasant or bad news through
written communication. A good written communication can create goodwill and
promote business. For example, PowerPoint can provide information about an
upcoming project, campaign, or plan of the company that needs to convey a lot of
information and highlight important key issues to mention; and the website provides an
overview of the business, its vision, mission, purpose, achievements, and future plans.
It is very difficult for a manager to directly inform all his employees about the
company announcement, and it is also very time consuming. That's why in this case,
email or texting is obviously the first choice and beneficial. In addition, specific details
such as time, location and content will be referred and recorded in the most accurate
way, avoiding the case that employees forget or lose focus.
When there are important administrative, economic and legal issues, they must be
expressed on paper or electronic media files as evidence to ensure the authenticity of the issue. lOMoAR cPSD| 58675420
2.5 Topics in Organizational behaviors are applied in Chrysler’s case study
2.5.1 Communication function theory
From practice, Chrysler had to deal with communicating problems, which means
the Communication functions theory has been implemented ineffectively. Based on
Communication functions theory, there are 5 functions which are management,
feedback, emotional sharing, persuasion, and information exchange.
Management: It is a fact that Chrysler failed to give adequate communication
about its current matters and future plans; consequently, workers or trade unions did not
know clearly what they could do, which led managers to hierarchies and guidelines for employees.
Feedback: The reason which leads to the deteriorating performance of Chrysler
during the 1990s is the lack of comments from managers about employees’ operation.
Workers were not aware of the inadequacies in the work done, did not receive feedback
and solutions for their problems, thereby causing the company's business to seriously decline.
Besides, feedback sent to employees can help them improve their performance. This
links to goal-setting theory. However, Chrysler did not give their employees comments,
so that they also lost their chance to develop.
Emotional sharing: Moreover, withouting communicating, members in
Chrysler couldn’t show satisfaction and frustration.
Persuasion: In terms of persuading function, if a leader or manager is trying to
persuade a work group to believe in the organization’s commitment to corporate social
responsibility, it will effectively impact the performance of a company. Considering the
case of Chrysler, howerver, employees have no idea about the company's plans so it's
difficult to persuade them to do what they don’t know about.
Information exchange: Obviously, there’s no communication means no
information exchange between members and managers, so workers are not able to
clearly orient the current problems as well as the future changes of the company. lOMoAR cPSD| 58675420
2.5.2 Elements of organization’s structure: centralization & decentralization
Centralization: refers to the degree to which decision making is concentrated at
a single point in the organization. It means that high-level managers make decisions and
the low-level managers simply implement their directives.
Same goes with the Chrysler case when employees remained in the dark
whenever they heard new announcements. It was one of the factors that led to their
terrible performance during the 1990s.
2.5.3 Leadership theories
Tom was truly a leader. Due to Behavioral theories (The Ohio States Study),
Tom fulfilled both 2 key dimensions of leadership behavior:
Initiating structure: Tom helped the UAW recognize the reality of global
competition and why it was so important to restructure again: laying off 54000 workers,
changing work practices that resulted in high operating cost.
Consideration: Tom spent considerable time walking around Chrysler’s plants
talking with workers, meeting with UAW executives, and addressing union members at their annual meeting
2.5.4 Motivating factors:
Chrysler has implemented a desirable compensation policy: providing both
financial (severance benefits) and non-financial (new jobs, new training, new education,
equity) rewards for the lay-off workers
2.6 Recommendation
According to aforementioned theories, not only Chyrsler but also companies and
business have to propose approriately policies about Internal communication.
2.6.1 Providing accurate and timely information
The deteriorating performance of Chrysler stems from inadequately providing
the company’ problems and plans in the future, making workers feel being kept in the
dark because of not having clear orientations. lOMoAR cPSD| 58675420
As far as we know, employees are also a part of an organization, so that they have
a right to be updated with the latest news in the internal company. For that reason, the
firm should inform employees about the work that has been, what is happening and
what will take place so that employees have the best overview of the current company
situation as well as prepare for the upcoming work. Through internal communication
activities, all information is exchanged transparently, clearly and fully, helping
employees understand their goals and duties. From there, departments will coordinate
more smoothly and reduce work overlap and avoid conflicts.
2.6.2 Giving feedback and responding immediately to employees' comments
It is also the manager's responsibility to monitor and evaluate work quality.
Weekly and monthly reviews should be given. Let employees know ahead of time and
be prepared to listen to management's suggestions that a few things need to be improved
to better meet the needs of the job. Annual reviews should be a time when Chrysler
managers summarize and discuss future plans with employees.
During those weekly reviews, or at regular intervals throughout the month/week,
take the time to listen to and respond to all of your employees' ideas. Many may not
agree with every piece of employee feedback. Take it lightly, however, and they will
feel respected. This is also when communication's emotional sharing function comes into play.
2.6.3 Choosing communication channels smartly
The choice of channel depends on whether the message is routine. Routine
messages tend to be straightforward and have minimal ambiguity; channels low in
richness can carry them efficiently. NonRoutine communications are likely to be
complicated and have the potential for misunderstanding. Managers can communicate
them effectively only by selecting the appropriate channel for the message.
There are two prime ways to provide data: Oral communication and Written Communication.
The benefits of oral communication are speed, feedback and exchange, in which
the listener can receive a response in minimal time. If Chrysler needs to transmit facts lOMoAR cPSD| 58675420
quickly, they can meet face-to-face, hold a meeting or choose other channels such as
phone calls, video calls. It cannot be denied the advantages of written communication.
In case of having an amount of working information that needs exchanging and not be
missed, or you want the data to be tangible, verifiable, and “on the record”, written
communication like: email, text messaging can be chosen.
In addition, body language, emotional expression through tone of voice is also a
way to make employees and managers understand problems.
In short, Chrysler managers need to pick approriate methods of communication to meet their purposes.
2.6.4 Building a centralized structure internally
It is necessary to build a strict internal management system in the enterprise in
which high-level managers make decisions and the low-level managers implement their
directives. As a result, the information can be transferred smoothly and effectively.
2.6.5 Choosing managers satisfying criteria of leadership behavior
The evaluation criteria in the selection of managers of an enterprise depend on
various factors and purposes; however, companies besides their own rules about a
qualified manager in the professional field, it is also necessary to meet basically based
on the theory of leadership behavior like Tom Lasorda in Chrysler’s case in order to
limit the situation of no communication internally, improve the connection between
employees and management, between departments, which contributes to the
development and operation of the company.
2.6.6 Having support policies for employees
Not only do current workers have rights to receive benefits and welfare provided
by companies but layoff ones also deserve to obtain support to some extent.
In the case of Chrysler, they have implemented a desirable compensation policy:
providing both financial (severance benefits) and non-financial (new jobs, new training,
new education, equity) rewards for the lay-off workers. lOMoAR cPSD| 58675420 3. CONCLUSION
To sum up, the Chrysler’s case is an insightful example about communication issues
and the way they handled it. It will definitely be a valuable lesson for managers to be
more aware of communicating effectively with their employees, hence helping the
companies become a place not only for work, but also a place where people can
comfortably share their viewpoints and stories. lOMoAR cPSD| 58675420 4. REFERENCES
(1) Chrysler (2022) Wikipedia. Wikimedia Foundation. Available at:
https://en.wikipedia.org/wiki/Chrysler (Accessed: December 5, 2022).
(2) This is Chrysler - News, partnerships, Community & More (no date) chrysler. Available at:
https://www.chrysler.com/this-is-chrysler.html (Accessed: December 5, 2022).
(3) Robbins, S.P. and Judge, T. (2019) Organizational behavior. Harlow, England: Pearson.
(4) Saxena, A. (2022) Written communication: Advantages and disadvantages,
unlu Blog! unlu Blog! Available at:
https://unlu.io/blog/advantagesdisadvantages-of-written-communication (Accessed: December 5, 2022).
(5) Written communication: Meaning, advantages and limitations (2015) Your
Article Library. Available at:
https://www.yourarticlelibrary.com/businesscommunication/written-
communication/written-communication-meaningadvantages-and-
limitations/70195 (Accessed: December 5, 2022).