Page 59 - DMGT524_TOTAL_QUALITY_MANAGEMENT

Total Quality Management

Notes

Case Study Chrysler’s Transmission Problem

hrysler pioneered its immensely popular mini van in 1984, which quickly became
the best selling product the company had ever built. Within five years,
CChrysler held more than 50% of market share of mini vans. In 1989 Chrysler
offered a new automatic transmission as an option in some of it’s to models of mini vans
and luxury automobiles. The new transmission immediately ran into trouble when many
customers reported serious problems.
Claiming that it had made improvement to reduce the initial problem, Chrysler continued
to use transmission. Meanwhile the centre of auto safety, a consumer group that monitors
the auto industry charged that Chrysler had not tested the transmission before introducing
it. The group’s claim was supported by data on owner complaints and frequency of repairs.
During the first years of ownership itself, about 20% of the owners were reporting problems
with the new transmission.

For the 1991 model, Chrysler extensively modified the design of the vehicle but continued
to use the same problematic transmission as standard equipment, with most of the large
engines in high demand.
As a result, the Chrysler which was placed at the top in magazine “Consumer reports” for
many years, dropped to bottom of the list in 1991, citing the transmission in particular as
well as other signs of deteriorating quality. A new Toyota model captured the top spot of
the year.
Questions

1. Make the brief presentation of the case.
2. To what factors might you attribute Chrysler’s failure to maintain market leadership?
3. How might a stronger focus on quality have helped Chrysler?

4. What might have Chrysler done differently? Give suggestions.
4.7 Summary

James MacGregor Burns, in his book Leadership, describes a leader as one who instills
purposes, not one who controls by brute force.

Quality leaders give priority attention to external and internal customers and their needs.
Everyone is responsible for quality, especially senior management and the CEO; however,
only the latter can provide the leadership system to achieve results.
Senior managers need to be provided with the skills to implement quality control
techniques and actively participate in the quality council.
Senior management must practice the philosophy of Management by Wandering Around
(MBWA).

Senior managers must be visible and actively engaged in the quality effort by serving on
teams, coaching teams, and teaching seminars.
A very important role of senior managers is listening to internal and external customers
and suppliers through visits, focus groups, and surveys. This information is translated
into core values and process improvement projects.

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