Organizational Change (General Motors) Case Solution

Abstract

            Companies need to be flexible and innovative in the ways in which they deal with the unfamiliar situations they often see themselves in.Change management is considered as the structured approach to transitioning individuals, teams, groups, departments, and organizations from a current state to a desired future land. It is applied to situations such as downsizing for cutting cost, growing organizations, or even adding new technology.It is an organizational process aimed at assisting employees to see, commit to, and live with and adopt changes in their current job environment.

            The sales and the revenue of the General Motors (GM) started decreasing due to which the company had to file for bankruptcy. The sales and revenue of the company are declining due various reasons such as internal and external issues faced by the company. These issues occurred due to the high wage rates of the employees, financial crisis, capacity issues, and increased completion. The company wants to develop a plan that focuses on the bringing change in the company in order to maintain sustainability and achieve competitive advantage. The company, in this case, has two options, either it should keep preparing the fuel effective cars or either it should focus on improving the image of the company through improving the quality.

            In this case, the management brought the change within the company by focusing on two strategies; cost cutting and changing the organizational culture. The company has made a board of eight member’s board, reporting directly to the CEO to adopt changes and evaluate the outcomes. It is recommended that the General Motors should focus on involving the employees in their decision making process, as well as it, should also focus on improving the quality in order to meet the customers’ expectations and achieve the competitive advantage.

Problem Statement

            The annual sales and revenue of the General Motors are declining due to various internal and external issues faced by the company such as financial issues, highwage rate of the employees, plant capacity issues, business operations of the company, etc. The company has gone through organizational change by developing cost cutting strategies and changing the organizational culture.

            The company now hastwo options whether it should start preparing fuel efficient automobiles or it shouldfocus on changing the perception of customers by providing high quality products and services. The company would have to decide its future upon these two strategies in order to achieve competitive advantage and compete other competitors like Toyota and other Chinese based automobile manufacturers.

Case Study Analysis

Company Background

            General Motors Corporation, also known as GM, is an American based company headquartered in Michigan, USA. It designs, manufactures, and distributes vehicles and their parts and sells different financial services around the world. It produces vehicles in more than 37 countries under thirteen different brands including Chevrolet, Cadillac, Holden, Opel, etc. The company holds a 20% share in the Industries MécaniquesMaghrébines (IMM), a Tunisian car manufacturer headquartered in Kairouan, Tunisia. It also holds a 77% share in General Motors Korea. The company has more than 200,000 employees around the world and is being operated in more than 120 countries.

            General Motors led global vehicle sales for 77 consecutive years from 1931 through 2007, longer than any other automobile manufacturer, and is currently among the world’s largest automobile manufacturers by vehicle unit sales. In 2009, General Motors had to file for bankruptcy due to several internal and external issues. In 2010, the company reorganized itself by going through organizational change and ended with an initial public offering that was one of the world’s top five largest to date and took back to profitability later that year.

Analysis

            In 2009, General Motors declared bankruptcy after several years with a diminution in sales, revenue and market share.The issues that the company faced are given below;

Issues Faced by General Motors

            The main issue for the company was the high wages of the employees due to which the company started facing financial issues. The company was paying high wages as compared to other automobile manufacturers. The company was paying $74 per hour whereas its competitors like Toyota Motors were paying $44 per hour. The company had an agreement with the trade union that the company would run the plant with minimum 80% capacity whether it needed or not. These things played an important role in the bankruptcy of the company and decreased its annual revenue……………………..

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Organizational Change (General Motors) Case Solution
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