1. Sergio Marchionne: leading
change in Fiat and Chrysler
 Aisling McCarthy
 Aisling Nee
 Natasha Earls
 Ramoji Alla

2. Background
Fiat Chrysler
Sergio Marchionne took over as
CEO of Fiat in 2004, during that
time Fiat:
 Had losses of $1.3 Billion
 Had a reputation of poor quality
 Had poor relationship with
Unions
By 2006 Marchionne had changed
the management system and the
company was now profitable
Marchionne took over as CEO
Chrysler in 2009 when it:
 Was near bankruptcy
 Had no market value
 Had a $6 Billion Government
loan
By 2011, Chrysler had an
operating profit of $2 Billion
and had repaid all Government
loans

3. Types of Change

4. Revolutionary Change
Change which requires rapid and major strategic as well
as culture change.
Involves:
 Clear strategic direction
 Marchionne articulated a clear strategic direction and
action plan for Fiat in 2004. His aim was to achieve great
integration and remove several management layers.
 Top management changes
 Marchionne found that in Fiat, the habit of upward
referral was so ingrained in the top management, that
he had to let 2,000 managers and executives go.

5. Revolutionary Change
 Multiple styles of change management
 Marchionne identified 26 young leaders in Chrysler, from two
or three levels below top management, who were to report to
him directly, in order to flatted out the organisation.
 Culture change
 Marchionne worked with elements of existing culture at
Chrysler. He drew on the experience of the existing
management team to improve the product range.
 Monitoring change
 Marchionne set unambiguous targets for his staff to achieve.
These were linked to financial targets. In this effort to reduce
costs in Chrysler, many jobs were cut and wages were slashed.

6. Managing Strategic Change
Styles
 Education
 Participation
 Intervention
 Direction
 Coercion/Edict

7. Managing Strategic Change
Styles
Most appropriate?
Intervention – ‘includes the coordination of and
authority over processes of change by a change agent
who delegates elements of change process.’ Exploring
Strategic Change Johnson, Whittington, & Scholes.

8. Style and Context
 Personality Types
 Different Styles for different changes
 Power

9. Levers for Change
Challenging the taken for granted
 Why did it take Fiat four years to develop a new model?
Changing Operational Processes and Routines
 Forced managers to think differently
 Separate brand departments in Chrysler
Power and Political Systems
 Fiat formed a strategic alliance with Chrysler
 Remove individuals resistant to change

10. Symbolic Changes
Kindergarten's and grocery stores opened next
to the plant
Behaviour of managers
Change Tactics
Take advantage of the performance downturn
Arrival of Marchionne as new CEO

11. What others might have been
used?
Symbolic change: Organisation Rituals & Change
 To signify a change of status or role provide
induction to new roles through training programmes
 Recognise effort benefiting organisation through
award ceremonies and promotions
 Reduce conflict and aggression through negotiating
committees

12. Effectiveness of the Change
Programmes

13. Build the case for change
Identifying the key problems
Status quo is not important
Change of culture
Talent spotting
Achieving the turnaround.

14. Share the Vision and values
Creating a compelling vision of the future
Business plan
Managers – Think out of box and do the things quickly

15. Resources and Information
Building a change coalition
No – Layers of Management
Eliminated proliferation of committees
Brought executive council – 24 person from all
divisions- sharing of ideas

16. Management and leadership
capabilities
 Mobilize commitment
Invest in people and involving the right people
Complete openness, fast communication.
Autonomy and Accountability
Spotting opportunities

17. Communication
 Everyone informed and motivated
 Keep it simple, Make it clear