General Motors Company

1.Company Description and Problem Statement:

General Motors is one of the leading manufacturers of cars, trucks, and vans, with manufacturing

plants not just spread out to the United States but all around the world in 35 countries. The

company was founded by William C. Durant in September 1908. General Motors captured major

market share until 77 years from 1931 to 2007. General Motors went bankrupt in the year 2009

after suffering heavy losses that also resulted in losses of the investors and shareholders of the

company. The big auto giant went through a bankruptcy protection for consecutive six-week in

2009. The great economic recession which began in the latter half of 2008 had an adverse effect

on the economy of the United States. Due to the economic crisis that year they showed a dramatic

drop in the automobile sales which not only affected General Motors but also Chrysler the big

automakers of US. Companies went bankrupt and liquidated that they approached for help to US

and Canadian government to provide financial support. Because of these, the US and Canadian

government provided unprecedented financial bailout support which was worth $85 million to both

companies. A new company was formed with majority owned by the United States Treasury after

General Motors emerged back from bankruptcy.

The main problems faced by GM that brought the company to the verge of bankruptcy were: 1.

An inability to bring out new and Modern Technology Improvised Vehicles in the market catering

to the customer need, 2. An Irrelevant business strategy and a major internal problem such as not

providing healthcare and pension benefits to its employees. Eventually, these problems coupled

with the financial crisis and recession in the economies of certain developed and developing

countries adversely impacted the revenues of GM. Due to this reason, US Government provided

financial accommodation to GM.

With following the energy crisis occurred in 2000, the US automakers failed to manufacture more

fuel-efficient cars compared to the SUV that was considered highly profitable for the company.

Therefore, they went on producing the products that did not fulfill the customer's demand. This

point should be noted as sellers can only survive in the market if there are enough buyers and GM

should be aware of the fact that if needs and wants of the customers arent satisfied, they wont be

profitable in the long run for building a successful empire.

2.The Impact of Culture on the Performance of General Motors

In todays fast-moving world, there is the constant development of business units, the creation of

new infrastructure and technology and most importantly adoption of great culture by the company.

For big corporations like General Motors culture plays a dominant role in the overall growth of

the company. GM is not the first company that faced the problem old dominating culture, there are

also companies like Xerox, IBM, Kodak that equally launched various programs only to realize

that their old culture can ruin themselves in the long run.

The old dominance culture of General Motors focused more on cutting costs anyway regardless of

quality rather than focusing on customers with ensuring better quality and safety for them. Change

is vital for every business in a periodical manner. Changing the culture of the organization is the

toughest task, everyone in the company are used to the culture that no one is willing to change.

Therefore, that was the same thing with General Motors as they were well aware of all the problems

since early 2000 but they just ignored it, never took responsibility for it, and moved on and that

was the reason for their failure later on which resulted in 42 deaths due to defects in auto vehicles

manufactured by them.
3.General Motors Old Culture:

GM became a practitioner of cost culture with following intense cost-cutting measures for the

survival of the company. The culture was also set such on not passing any bad news out of the

company. The organization structure of General Motors is too vertically integrated. There was no

proper flow of information from the bottom level to top level in the company. Employees working

in the company were unaware of any facts and decisions made by the Managers and Superiors of

the company. Due to that, workers who were responsible for car production equally took their

hands off for any responsibility or problem that occurred during the manufacturing process. There

was a lack of transparency and accountability between management and workers.

General Motors were always being criticized for reluctantly firing poor executives from work,

slow and delaying in taking any responsibility for problems, hesitant and scared about delivering

bad news to upper-level management authorities.

United States Attorney Anton Valukas introduced the concept of GM Nod Culture during the

investigation of faulty ignition against the company. He stated that during meetings and

conferences held Senior Executives and Managers showed their consent to complete the assigned

task but later there were no practical implementations seen for the task given.

He also witnessed GM Salute Culture which showed an interaction of arms folding each other,

meaning that duty was to be fulfilled by another person and not me.

The General Motors is packed with thousands of workers who were hired to work in a culture

where the main target was to fulfill quarterly numbers given by the company. The communication

between internal organization was stifling because people did not talk to each other.
4.Ways to improve and establish a new culture

General Motors Corporation was founded 108 years ago and to change the culture of the company

was a tough job. After the recession and financial crisis, they realized that change is a vital and

necessary to implement in order to gain back the reputation of the company and be profitable in

the long run. Mary Barra, CEO of GM said Its is hard to identify, tricky to implement and tough

to measure how an organization goes about changing its ways.

4.1. Leadership Engagement Plan

The first step they took towards the organization change was created a new leadership position

which focused on basic leadership procedures raised to its most elevated amount of organization.

The Seniors Administration was going to be the focal point of these issues. Databases were

improved and training programs were launched in order to facilitate employees and in return

provide great service to its customers. Communication between different departments was

necessary to improve internal environment of the organization. They set up meetings and scattered

reports that got different people talking with each other to familiarize themselves and developed

strong team bonding with equally promoting teamwork. Upper-level managers and bottom level

employees were made aware of the ownership of responsibilities and problems that could occur so

the disputes can be resolved and production process wont stop working. Recognizing employees

work and treat everyone equally was very important. The executives in the organization must

support the cultural change in different ways beyond behavioral and verbal support. It is very

important for them to constantly support change.

They have organized Speak Up for Safety program urging representatives to report issues related

to wellbeing faster. The company regularly communicates with employees about the safety
concerns and hear their voices to the top with sharing their safety messages in newspapers and

bulletins. They have also declared making of Global Product Integrity Association that will

strengthen on improving the general security and quality execution process of GM said by Mary

Barra.

General Motors company appointed 35 Wellbeing Specialists who enable them to recognize and

address issues more efficiently and quickly than before. They can see the positive effect and

consequences at work. They also appointed Jeff Boyer Vice President of Safety of General Motors

for resolving the issues relating to the organization properly, incorporating the security issues

under a protected pioneer. Mary Barra restructured the decision-making process for safety issues

so that they are raised to the highest levels of the company.

Reward and Recognition System has been highly redefined to make the processes of GM move

faster and easier. All representatives in the Company work in a collateral structure which is better

than the old culture. The collegial instructing moves from top to bottom in GM. Leaders and

employees who did not follow the new practices and rules defined by GM were either ought to be

expelled from the company or necessary actions were taken to make them implement.

Mary Barra, CEO of General Motors lead the great transformation and cultural change in the

company of all time. She displayed the leadership challenge very well as described by James

Kouzes in his book. A leader can take the leadership approach by Modelling the way. She spoke

in the House and Senate Committee meeting openly and accepted the reason of their failure. She

took the challenge ahead to make them debt free, gain back the trust of stockholders and make

produce fuel efficient car by the company. She moved her steps in that direction. She inspired a

shared vision that GM is changing the way there were doing business earlier. She challenged the

process and brought new innovative culture in the company like working as a team, sharing
accountability even for others responsibilities and be cooperative in that case. She enabled other

subordinates in the company to act, speak up and share freely about their fear or any king of

wrongdoing they see in the company. Enlisting others in the decision-making process and made

them feel that their reviews and solutions will equally be heard and implemented. She encouraged

everyones heart to work again and promised that General Motors will be the worlds largest

automaker company which they used to be for consecutive 77 years and set an example for others

to be like them.

In my research, I found the five dysfunctions of the team best suits the problem faced by the general

motors given by Patrick Lencioni. The Absence of Trust, Fear of Conflict due to the flow of

information, lack of commitment, avoidance of accountability and not paying attention to the

results were the root causes on which the old culture was standing. Therefore, the individuals in

the organization should change their behavior and this is the hardest part of the cultural change.

Toyota Motor Corporation is the current competitor for GM. Toyota is a Japan based company

and worlds largest manufacturer of auto vehicles, revenues, and designs. Toyota business strategy

is focused on global market penetration, it has captured each and every segment and also produces

zero emission vehicles. In accordance with the cultural change, this company undergoes

considerable change once in a while. Toyota organization culture indicates a very careful approach

in organization learning through constantly supporting teamwork, improvement through learning,

giving quality products is at the heart of the company. It mainly highlights the value of developing

an appropriate culture for achieving success globally. General Motors improvising on their old

culture can definitely beat up its competitors in various aspects. Toyota company benefits

themselves with problem-solving due to its organization culture and GM can definitely implement

this area of expertise compare to Toyota. Presentation of SWOT analysis to company leadership
can also to achieve the predicted outcomes for the company. It separates the internal and external

environmental assessment to achieve the company objectives

Change Management Plan

Ensuring we have a smooth transition to the updated process is extremely important to capturing

our projected benefits. Change manager can also be designated to the manufacturing plants who

will produce weekly reports and will lead a monthly group meeting with staff of GM.

The framework for the change manager's weekly reports and monthly meetings will be based on

the following six key elements to assist an effective transition:

1. Communicate the threat of not changing

2. Involve your team in decision making

3. Minimize uncertainty.

4. Celebrate successes in moving toward the goal

5. Explaining reasons for change

6. Be as transparent as possible

Lastly, a company can only work if they pay attention to the problems raised at the ground level,

recruit proper staffing, give timely training programs, respect each other, mutual understanding,

celebrate success and equally consider the work done by the workers who helped them achieve the

success. If this methodology of working is adopted in the company like GM than I believe none

of the problems can arrive as companies can maintain control over their internal environment.
References

http://culturalkeys.us/ck/Briody%20et%20al.%20-%20Story%20Impact%202012.pdf

https://www.washingtonpost.com/news/on-leadership/wp/2014/06/05/what-gm-could-do-to-

change-its-culture/?utm_term=.ddab491e3dd4

https://www.slideshare.net/chaarlesjose/general-motors-case-study-59822159

https://www.thebalance.com/how-to-change-your-culture-1918810

https://en.wikipedia.org/wiki/Effects_of_the_2008%E2%80%9310_automotive_industry_crisis_

on_the_United_States/

https://www.forbes.com/sites/johnbaldoni/2014/03/11/general-motors-the-problem-is-greater-

than-a-faulty-ignition-switch/#6465633343a7

VCU library data guide

http://subscriber.hoovers.com.proxy.library.vcu.edu/H/company360/fulldescription.html?compa

nyId=10640000000000&newsCompanyDuns=832447812

https://dash.harvard.edu/bitstream/handle/1/12111351/14-062.pdf?sequence=1