Examining a Business Failure - Research Paper Example

The problem that could have been predicted was the lack of coordination among the different arms of the company and the expected results at a time when the company was under a lot of pressure to perform and match up to its main competitor, General Motors. With this in mind, then decision-making and leadership would have played a crucial role in ensuring that the company knew what was coming in terms of expectations of success or failure. In addition to decision-making and leadership, the company was also shifting from one tradition of centralization, where all the decisions were made in one place, and by one person, to a system that allowed each branch to make its own decisions.

The decision-making and leadership theory would have allowed the leadership of the company to see that the former director micromanaged the whole company according to his wishes and expectations. As a result, decentralization of the company’s command led to loss of communication between central management and the subsidiaries as their managers were expected to make their own decisions. The explanation for this is the breakdown in communication and lack of anticipation for future developments in terms of making changes in organizational behaviour without feasibility study, but based on the management structure of another competitor.

The bureaucracy theory can also be applied in the failure of Chrysler LLC in relation to predicting its potential failure and explanation for its failure. This is evident in that micromanagement of the company stands for s a non-standard form of bureaucracy, where the manager decided everything to be done in Chrysler LLC. This is to mean that nothing could take place without his knowledge, and the director who followed the founder of Chrysler LLC made the decisions and issued them as directives, where there was no order to feasibility.

The director became the final authority directing every step of the company to an extent of reverting to the centralized management style that had been discarded for the decentralized style. Bureaucracy could have predicted the eminent failure by the director’s impulsive directives to match the needs of the market and carve a name for themselves to overthrow General Motors (Sheppard, 2001). The main cause of failure in Chrysler LLC can be attributed to the organizational structure and management, where the largest portion of the blame lies with management.

This is because the management failed to consider most of the factors, especially the long term, which is in its mandate to ensure that the company’s long-term goals are taken care of to an extent that, predictions into the future of the company can be made. In addition, the management contributed the largest part in the back and forth struggles to change the organizational structure, where the organizational structure is sucked in as a contributor. Organizational structure caused the failure of Chrysler LLC by losing grip of the leadership structures such that leadership was concentrated on a few people