Business Case Studies, Organizational Behavior Case Study, Corporate Social Responsibility

‘Nothing is permanent but for change.’ This adage holds good even for the industry – responsible for umpteen number of socio-economic changes in the modern societies – called industry of industries, the automobile industry. But, the changing times forced the global auto-industry to master newer tips for its survival. During the 1980s and early 1990s, the auto-industry shrunk, from a horde of independent companies, into a handful of global consortiums fiercely competing with each other. Immediate need to cut costs and intensifying price wars made carmakers align with each other (instead of competing) – for gaining access to technology and markets and to achieve economies of scale. In this milieu, the importance has shifted from capital intensive and risky mergers and acquisitions, to strategic alliances like the one formed by Fiat and GM. Some of these collaborations are by choice while others are by force like the Fiat-GM Alliance. This case study, first in the series of 3 cases, enables a discussion over the conditions that led to the formation of the alliance. It helps analyse the nature of the alliance and debate whether it was rneeded, in the first place, and how far it could endure. Does the alliance have the required steam to reward the partners? Was the partnership a result of mutual respect not sacrificing one side for the other?