Category: General Motors

Introduction

In contemporary business arena, business-leaders need to develop strategies that can enable their organization utilize factors of production effectively.

Scarcity in resources and competition in modern globalized world calls for adoption of strategic management policies; strategic management involvesdetermination of mission, vision, values, goals, objectives, roles, and responsibilities of an organisation and the pathways through which the organisation can follow to attain competitiveness.

Global automobile industry is competitive with players making different models and designs of vehicles. To remain competitive in the highly volatile market, General Motors has to have strategic management policies that will enhance the utilization of its strengths to take advantage of opportunities in the market. This paper undertakes an analysis of strategic policies of General Motors in 2009.

General Motors historical background

General Motor Corporation is world’s second largest automobile company after Toyota Motor Corporation; the company operates in more than 157 countries, it also sells cars and trucks through various divisions like Buick Cadillac, Chevrolet, GMC, Opel, Vauxhal, and Holden; it was founded in 1908 by William C. Durant. During the initial years of operation, the company targeted the well to do in the society as it produced custom-made automobile that were expensive for ordinary people.

However, in the 1920s, the company was struggling to keep up with competition of its main competitor Ford Motor company that has specialized in making low cost automobiles; the then management lead by Alfred P. Sloan had no option other than change their approach to the market.

At the wake of global financial crisis of 2008, the company suffered financial difficulties to the point of seeking billion of dollars to stay afloat from the government. The global financial crisis found a suffering company that had been dropping its employees and managers in dozens of thousands.

The main operating base of the company is in the United States of America where it has its headquarters at Detroit, Michigan. After the United states, China forms the second largest market for GM products; according to GM worldwide 2008 vehicle sales China sales was at 12.0% while that of America was 22.1%.

In May 2009, the financial base of the company was wanting to the point that management received a bailing out of 19 Billion from the government to boost its operations. However according to the company’s Car design Campion , Bob Lutz, the company has the potential of regaining its past glory, Strategic management aims at improving the overall performance of an organisation; it undertakes this role by focusing on an organisations strengths and energy.

Pillars of strategic management ensure that members of the organization are working toward the similar goals and objectives; the teams are orchestrated and have team spirit as their guiding policy. Policies of strategic management assess and adjust organization’s direction in response to a changing environment; focus of the management policy is on minimizing operational costs and maximizing contribution.

When doing business, organizations are affected by internal and external factors; when management is at the control of the business, they can manage their internal factors to work for its good. When dealing with the external environment, management are open to two main options, adoption or enactment.

When using the adoption method, the management sails in the prevailing market situation to learn the market so that it can create its own opportunities. When using the enactment method, the management influences the operational activity for its own benefit, for instance the management may decide to sell its produce at relatively lower prices than those of competitors to attract more customers.

When charting through strategic course, organizations should have room for mistakes and ensure that every process or every mistake done is a learning process. The management process’s should be both deliberate and emergent where firms follow certain pathway but remain in control.

Internal strengths and weaknesses of GM

Since its inception in 1908, the company has had effective management team with the will and power to pioneer change. In the 1920’s, to fight against competition from Ford, Alfred P. Sloan decided to change the companies approach that focused on the well to do in the community and include middle income earners who were not satisfied by its then production and production of Ford that was for the less earning.

The wakeup call that the company got from Ford made the management realize the need to plan its businesses effectively; at operational level, the management emphasised on treating customers’ right.

The spirit of competitiveness and the need to create value to customers enabled the company dominate in the United States car market where it controlled about 65% of the market. The management team that the company employs has wide experience in the sector, they well understand the trends of the market and with the understanding they are able to responds to different issues in the market when they occur.

From the 1920, GM had had issues choosing the target market, and then the company has structured its marketing and production to target the well to do in the community leaving the masses. It was this opportunity that Ford had been able to seize and made the company face fiancé competition. GM adopts a metrics organisational model; the model has issue and challenges in reporting the outcomes. Each department seems to work as an autonomy organ and the level of discussion with other departments is challenging.

There is much concentration of the hierarchy of own division thus less concern on what other areas might be doing. With such breakdown of information, the company has been corned with some inefficiencies and lack of control. The matrix model again has some challenges in conflicts resolutions; other than in divisional conflicts, times find the different divisions having friction with each other to the point of creating unfavourable working environment.

One challenge that organisations adopting matrix model have had is the issue of dealing with transfer pricing among departments; there are no cut policies through which the departments can communicate and come up with the right method of setting transfer prices. With the current situation, some departments feel intimidated by the system.

External environment surrounding General Motors

The motor vehicle industry is considered as one of the fast growing industries in the world; it has attracted May players and customers buy first, second or third hand cars. Other than in the developed worlds, the industry has taken much shape in the developing worlds like Africa and Caribbean Countries.

The motor vehicle industry has been on a fast change with players from different countries coming up with products aiming at different markets. In the wake of the changes, an organisation needs to enact policies and strategies that will see it remain strong in the situation. In the 1960s, GM was the dominant automobile producer in the United States; the company was among the most profitable in the world.

However in 1970s, the dominance of the company started to melt because of high competition (there was emergence of low-cost/high quality Japanese cars) and the global oil crisis of the time. The Japanese cars came with more fuel efficiency exposing the guzzlers that GM was making; there was a shift of customers to the new development.

The 21^st century saw the world change with globalisation; with the new trend, GM is able to target customers from the Diaspora. Enlarged market is an advantage to GM as it offers the company a wider market to sell its products, however it comes with the challenge of managing the big business as well as coming up with the right products for every customer.

In 2009, the world was suffering from global financial crisis, during the period, individuals and organisations were finding it hard to buy and maintain vehicles thus the sales of automobiles reduced. With the reduced sales, GM had to contend with losses to the point of seeking financial assistance from the government.

With the low performance, the company saw Toyota Motor Corporation take leadership in sales and production of automobiles. The strategies that were implemented by Toyota were much similar to the ones that Ford has initiated in the 1920 to outdo GM competition.

One challenge that is facing the automobile industry is the effect that fossil fuels driven vehicles have on the environment. Environment activists have condemned the industry for being responsible for environmental damage with the pollution and emissions that automobiles emit. Although the automobile industry has one of the highest revenue contribution in the world, the sector has been greatly affected by environmental concerns.

To remain in the market and seem to have minimal effects on the environment, different companies have developed different brands of automobiles; GM has produced electrically charged vehicles as well as hybrid ones to remain in the market and reduce the adverse effects its products have on the environment. With the new outcomes, the cost of production, innovation, and invention has skyrocketed for the company.

The world is increasingly becoming cautious of the effects that human activities have on the natural environment; the effects of global warming are becoming real in different part of the world; focus has been given to the effect that the automobile has in environmental damage.

Until the 21^st century, the automobile industry depended solely on fossils fuels for its operation. When fuels and oils in vehicles are burnt to propel the engines, they produce green house gasses, which are harmful to the environment. In response to environmental conservation campaigns, the automobile industry has embarked on massive products improvement; they have developed highly fuel-efficient cars, gas vehicles and electric vehicles.

National and international legislations has been put in place to control the industry, for example German environmental conversation movement on 2007 released carbon emission control policy on car manufacturers; the policy required that 2012, vehicles produced should not produce more than 130 grams of carbon dioxide per kilometre.

General Motors SWOT analysis

The first strength that the company has is the wide experience that it has been able to build over time. For over a century, the company has been producing automobiles and have seen the industry grow from what it was to what it is today. The succession of management has been there to continue the spirit of improving the company’s competitiveness.

With the longevity in production, the company has built strong brand name in different part of the world thus selling its products is easy. The company has a dedicated human capital that is willing to use their intellectualism for the good of the company.

One weakness that has prevailed in the company is lack of aggressiveness to invent new products; the company has been technology adopters and not inventors. With the trend, it is not able to take the cream of the market. The management structure of the company creates some departmental frictions to the disadvantage of the company. The financial base of the company has been challenged by global economic changes to the point of seeking for bail outs, these shows a company without contingency plans.

There are numerous opportunities that GM has; they range from the opening of the global market where the company can sell its products in different countries. Selling is facilitated by growth in effective transport and communication channels. As the world interacts, demand for automobiles has continued to grow to the advantage of the company.

The main threat that General Motors has to face is high competition in the automobile industry; the industry is invested with multinational that seems to have captured the art of producing customer focused products. This challenge GM that has to remain on the toes to make competitive products; other than the competition, the company faces the threats of changing world economic situation; it has in the past been affected negatively.

General motors’ organisational structure

Since the 1990s in the wake strategic management structures, GM opted for a change of its organisational structure; the decision was made to streamline its operations, decision making, as well as integrate its design and manufacturing operations.

The company adopts a matrix organisational structure; under the structure, activities within the company are grouped in particular basis that the management feels fits for the prevailing business environment. At GM activities are grouped on basis of products, services, customers, programs, technical process, or geography; to ensure that there is efficiency, each activity head or department is manned independently by a departmental head who has the mandate of developing and maintaining an orchestrate winning team.

The structure of the company aims at ensuring that the company achieves high economies of scale through integrating functions in line with product development, engineering manufacturing, and customer relation management structures. Generally the company is divided across two main segments as the production team and support staff sections.

Under the manufacturing team, the management ensures that efficiency has been embraced and the employees in this department are well qualified. The marketing, research and development of the company ensures that the company has updated information on what is taking place in the outside world to assist it make the right decisions.

As a key organisational structure, the company aims at improving innovation and invention in the company; there is much emphasis on use of employee’s intellectual capacity and personal talents and skills to undertake different tasks. When using the policy, the management ensures that staffs are highly motivated to produce products that satisfy customers.

With changing global environments, the management approach assists the company establish opportunities offered by the global automobile industry and mitigate against any business risks or threats that might come along. When making decisions, the management adopts a scientific decision making policy that emphasis on the need to research a certain challenge and come up with the best solution.

When making the final decision, the company has the tendency of involving its human capital and ensuring they well understand the reason behind the decision. With modern globalized world, GM has taken advantage of the existing environment, the company has diverted in the global market using different styles that will see it able to use add value to its customers and compete against high rivals like Toyota and Ford.

The company has invested heavily in Information technology to assist it minimize costs and increase the contribution it gets from its products. The company’s information and technology system is hybrid that it assists the company get solution to complex and challenging situations it is going through.

Other than the information technology structures and systems, the company sorts for consultancy services from IBM to facilitate the fast transfer of information between countries, divisions, and departments. The system integrates different policies and structures which include supply chain, human resources management, and stock management.

With the expansion to different markets, the management has adopted the team management organisational structure; under this approach employees with particular qualification and those who could reinforce each other positively are grouped together to undertake a particular task. With such an arrangement, the management aims at increasing efficiency, increasing control, and profitable growth.

The management leaders who can be classified as divisional and corporate leaders ensure that the company has been managed in the best approach possible. This entails divisional leaders taking care of day to day business operations as corporate leaders look into the larger picture and corporate objectives/strategies of the company. With the two level management structures, the matrix model supports a multiple support systems and authority relationships; employees are answerable to their activities to two or more heads.

Business level structure

General Motors’ targets domestic and international markets with new and refurbished automobiles. The management ensures that the products meet the demand of the target market irrespective of their location or income. General Motors has a hub-and-spoke business strategy; the strategy assists the company advantage of the existing business opportunities.

When tapping the opportunities, the business structure assists in coming up with policies that improve its business and mitigate against business risks and threats; the company’s strategy is highly responsive to any changes in world economies and improves its products with the wave of change.

General Motors business strategy is mounted on hard-to-emulate mix through visional management, geographic location management structure, embedded in an ambitious and dedicated work force. With the business strategy, the company aims to attain dominance in the global automobile industry in sales and production. The company has embarked on quality customer service and aims at improving the reliability of its products.

When operating in the internal market, the marketing team is mandated with the task of analysis the market and advising the management on the best approach to adopt in a particular market. For instance in the developing world, the company seeks to have the sale of refurbished automobiles while in the developed worlds, the market is mostly dominated with brand new automobiles.

General Motors Internal structures controls system and how they match the company’s structure

To ensure that the company has been managed effectively and there is a form of uniformity in management and decisions in different parts of the world, the company has internal control policies to address these issues.

The management structure which follows the hybrid matrix model ensures that employees have a hierarchy through which they can communicate to the management and vice-versa. On the other hand the system allows for free flow of corporate information and accommodates recommendations from staffs and people on the ground.

The flow of information is structured through system rights, and the level of interaction and control that someone has. For instance technical teams have to clear with their departmental heads/ divisional heads when they have an issue before channelling the same to the top management. The structure does not however distance the management with subordinates or force dictatorship model of management.

In the 1990s under the leadership of Jack Smith, the management decided to cut down the number of production plants to concentrate on adding value to the already existing once. Since then the company has an efficiency program that aims at creating state-of-the-art assembly plants and aims at closing down those areas that give inefficiency in the organisation. With the program that is currently operating, the company has managed to keep up with new developments in the market and come up with customer focused products.

When deploying employing as well as appraising them, the management adopts an effective human selection and recruitment method. Under the method, the company ensures that it has recruited highly talented individuals with experience in their area of specialization. In the event that such people have not been found, the company has a talent and skill management department that focuses on building competence among staffs.

With the management policy, the company ensures that production is effective and factors of production are put into use effectively. When appraising employees, GM adopts a balanced scorecard approach, under the approach, focus shifts to looking into revenue and non-revenue features of the human resources maintained. In the event that an employee has portrayed some potential in a particular area, the management is quick to reward and motivate the employees work harder.

Another way that the company maintains control is through the use of research and development team; the teams are given the task of advising the management on the best management style to adopt in the changing business environment.

When a certain recommendation has been offered, the management discusses it out using and make a decision using scientific decision making approach. With the openness of decision making, an action undertaken by one segment will have been understood by other to ensure that control has been maintained effectively.

The matrix model of management is another control method that the company has adopted, the method allows for teams which are self regulated to make decisions and manage particular segments of the company. The teams are given the task and mandate of ensuring that the resources that they have been allocate has been managed in the most effective manner. In the event that some area has reported a deficit, the deficit can be traced back and addressed accordingly.

In the cost management and managing how funds are managed in the organisation, the company has an effective internal finance control policy. Under the policy the management emphasis that there must be accountability of at least two people before passing any financial undertaking. On continuous basis the management vets the system to see whether there is an area that needs improvement or an area that is yielding negatively.

Financial managers have the responsibility of preparing, disclosing, presenting, and interpolating financial accounts of their organizations. To undertake above role, the managers use financial analytic tools like audit notes and financial ratios. Both audit notes and financial ratios are used by shareholders, financiers, creditors, and potential shareholders to make decisions whether to do business with a particular company.

Other than above external users, financial accounts analytic tools are used by management to gauge their level of performance. General Motors financial department has the mandate of providing such quality, timely and reliable information to the management to facilitate making of quality decisions. When such information has been provided, the company will be more competitive amidst its main competitors (Toyota and Volkswagen).

Recommendations

Past performances of GM have shown that the company is vulnerable to changes in the global economic environments; although this is likely to happen in all industries, the effect that it has had at GM are high. The management should learn from past performances and adopt futuristic strategies/policies that will focus on cost reduction and improvement of the products quality. This can only be attained by aggressive research and developments that will assist the company understand the prevailing business environment it operates in.

The research and development team seems not to be fulfilling their tasks effectively; last hick-ups that the company has were as a result of it being caught off guard by changes in the global markets. The management should aim at having a devolved research and management team which can address issues as they arise; with such an aggressive team the company will be able to redesign vehicles that better satisfy its customers.

With the high competition, GM should embark on policies that facilitate cost management/cost minimization; some of the policies include total quality management and adopting Six-sigma management structures. When implementing cost minimization policies the company should focus on ensuring that factors of production are allocated effectively in every department and they have been used effectively. Waste management policies should be on the centre stage of the management and input-output models should be emphasised.

In the international ventures that the company has engaged in, the marketing team should design the pathway for the company and creates the company brand name. Although the company boosts of a strong brand name, the management should be sensitive of effective of brand erosion.

The marketing team should work with the assistance of other strategic policies like integrated supply chain and logistics management to ensure that consumers get confidence and loyalty with the company’s products. Of late, the moves to undertake root marketing and culture intelligence in marketing should be embarked on; the company should ensure that when selling the products they well understand the needs at a micro level rather than address target markets from the macro angle.

The growth of computers and various technologies can also be put in use to assist the company come up with better decisions; for example, the company should develop virtual teams situated in the country of diversification; with virtual team that work across time, space, and geographical area, sharing of information will be facilitated. The higher the quality of decisions a company has, the higher the chances of making responsive decision.

When undertaking an international venture, undertaking a market research is crucial; the research will assist the company understand the market trend in the country of venture and come up with the right market entry policy. Information is power, it will assist the company make strategies that are responsive to the needs of the market; market research helps in making marketing penetration strategy, product development, and differentiation strategy; when a company gets the strategies right, then they offer it a competitive advantage.

After venturing in the foreign market GM should embark on consumer-relationship management strategies to develop and retain consumers’ loyalty; the management policies will see the company success in the competitive markets.

Management gurus emphasize that the best method of remaining competitive in fiercely competitive market is through products and service differentiation. On the other hand to attain differentiation, focus shifts to quality improvement and ensuring that products address the needs of consumers. GM should embrace policies that facilitate products quality improvement. The channels through which the company offers its products should be efficiency and offer quality services to users.

In contemporary business environments, there are new management practises that have been developed; they include blue-ocean management, integrated logistics management, strategic alliances, and customer relation management practices. General Motors should adopt such programs in its internal structures as it will facilitate the attainment of its corporate goals and objectives.

Introduction

Among the U.S. car manufacturers, General Motors is one of the most influential market players that distributes vehicles of such brands as GMC, Chevrolet, Cadillac, and Buick. Although the company uses a market-based pricing strategy to align with the competitors, they increase their revenue by offering the exceptional quality of its products and serving premium sector customers. Although the company has extensive plans for the development of electric vehicles, today, they are producing only one model of e-cars Chevrolet Bolt EV (General Motors, 2020). Building such types of cars is a challenge due to the high manufacturing costs caused by the battery price. A cost-based pricing strategy is, therefore, inefficient for electric vehicles, as it increases the price far above their value and prevents customers from purchasing them. Value-based prices have the potential to promote sales and reduce costs per unit. Moreover, the battery costs are expected to decrease in the future, making the development of EVs a significant investment.

Cost-Based Versus Market-Based Pricing Strategy

A cost-based pricing strategy has been adopted for many years as it provided a solid justification for setting price levels. The approach assumes that the price level should consist of the total manufacturing expenditures per item and the added revenue. However, modern market theory and practice prove its inefficiency under the competition. The reason for this is that this approach applies the costs per unit plus revenue model when, in fact, units cost change with the quantity sold, and this amount directly depends on the price level (Nagle & Müller, 2018). It is impossible to establish the level of sales and fix the price based on it when it is the price that determines the purchases. When the company sets higher prices aimed to cover production expenditures, the costs per unit tend to increase.

The cost-based approach is particularly flawed in the case of technological innovations, such as electric vehicle production. The manufacturing of such products usually requires significant investments in research and design, which can be minimized by selling more items. Moreover, emerging technologies tend to become steadily cheaper when they are demanded on the market. That is why companies reduce prices on innovative products to promote sales and attract future consumers.

Given the flaws of the previous model, modern strategies tend to make prices value-oriented. An adequate pricing approach should focus on the price that the consumers are willing to pay for the item that possesses particular qualities. That is why it should not significantly exceed the price level of the competitors offering similar products. Nagle and Müller (2018) highlight that the strategies should not only adapt prices to the customers’ purchasing willingness but “raise customers’ willingness-to-pay to a level that better reflects the product’s true value” (p. 5). That is why the optimal price strategy should base on the combination of the value-based competitors’ adjusted prices.

Strategic Implications of Prices for General Motors on the EV Market

Despite high manufacturing costs, many automobile companies have entered the electric vehicle market during the recent decade. Although such cars are less profitable than petroleum-fueled vehicles, such companies as General Motors still pursue manufacturing due to imperfect competition. According to Matsushima and Khanna (2018), the strengthening of environmental regulation forced the automobile giants to improve the fuel economy of their cars. Moreover, companies tend to reduce prices and get lower revenues for these vehicles (Matsushima & Khanna, 2018). The technologies used in EV manufacturing are new and require significant investments and increased expenditures per unit. The batteries for electric cars constitute the majority of production costs (Kochhan et al., 2017). Nevertheless, the number of such vehicles grows due to several reasons. Apart from environmental regulation, the companies predict a decrease in technology costs and, thus, aim to win on the market before it happens.

General Motors tends to employ the pricing model that prevails on the EV market for its Chevrolet Bolt EV. Despite the increased costs, they cannot set the prices too high as they would become uncompetitive. The discussed car has a similar set of features as its competitors, including Fiat 500e or Hyundai Kona Electric. With the battery capacity from 60 to 66 kWh, and a range of 239 miles it offers substantial value to the consumers (2020 Chevy Bolt EV). To compensate for the reduced price level (starting at $36,620), the company has designed a Premier model that several premium options. Thus, General Motors applies market segmentation to fit into the competition with the base price but to increase revenue using the premium class goods.

Pricing Model for Chevrolet Bolt EV

Cost Structure of Chevrolet Bolt EV

This analysis includes the data for the currently sold models of Chevrolet Bolt EV provided by Lutsey and Nicholas (2019). The scholars claim that the price structure of Chevrolet Bolt EV consists of such components: Battery pack, EV powertrain, vehicle assembly, and indirect costs. The price for the battery pack was calculated for the specific model of reported $160 per 1 kWh and comprised $10,560 for a 66 kWh battery (Lutsey & Nicholas, 2019). Other components of the powertrain, vehicle assembly, and indirect costs were considered average for the vehicle category and class offered by Lutsey and Nicholas (2019). Thus, the total cost structure for Chevrolet Bolt EV was calculated as follows:

• EV Powertrain: $10,560 (battery pack) + $3,449 (other components)
• Vehicle assembly: $12,600
• Indirect cost (including research and distribution): $10,584

Thus, the total approximate cost of production of one Chevrolet Bolt EV comprised $37,193, which is slightly higher than the basic price of a car. The calculations might differ from the real costs as the analyzed data concerning the overall costs of EV production without the specification of a particular company or model (apart from the battery pack price). It should be noted that the indirect costs used for research, design, and promotion can become substantially lower with the increase in sales, justifying a relatively low price level.

Price of Chevrolet Bolt EV Premier

Given the specificity of the EV market, the primary goals of the companies are to promote sales of electric cars and to win the consumers before the predicted cost decrease. Due to such purposes, a cost-based pricing strategy is inapplicable here as it would set the price on a higher level than those of the competitors. Even a moderate revenue of 5% will increase the price up to $39,052. That is why the focus should be made on reducing the eight indirect costs, which currently comprise $10,584 per unit. Setting the price around the current costs ($37,000) will maximize sales, lower indirect expenses, and make the car profitable for the company. Moreover, General Motors works on technological improvements that would make the batteries cheaper in the future (General Motors, 2020). That is why such price levels would help to promote the car and attract customers, creating a competitive advantage in the future.

Conclusion

Due to high manufacturing expenditures for Chevrolet Bolt EV, the cost-based pricing strategy is inapplicable, as it would decrease the sales of the car. The offered price level is derived from the competitors’ rates and the value of the item for the consumers, and thus cannot be significantly higher than the costs. The current paper proposes to set the prices at a lower level than the cost-based model would expect. The reason for this is the high proportion of indirect variable costs, such as research and design, that will decrease per unit as the sales grow, generating profit for the company.

References

2020 Chevy Bolt EV. (2020). Web.

General Motors (2020). How we’re making EVs affordable. Web.

Kochhan, R., Fuchs, S., Reuter, B., Schickram, S., Sinning, M., & Lienkamp, M. (2017). An overview of costs for vehicle components, fuels, greenhouse gas emissions, and total cost of ownership update 2017. Research Gate, 1-26.

Lutsey, N., & Nicholas, M. (2019). Update on electric vehicle costs in the United States through 2030. International Council on Clean Transportation, 1-12.

Matsushima, H. & Khanna, M (2018). Revealing auto-manufacturers’ implicit pricing strategy under the reformed CAFE standard: A reduced form approach. Proceedings of 2018 Agricultural & Applied Economics Association Annual Meeting.

Nagle, T. T., & Müller, G. (2018). The strategy and tactics of pricing: A guide to growing more profitably. Routledge.

Introduction

The GM Culture Crisis is a case study highlighting the leadership challenges General Motors, or GM, faced during the early 2000s. The case study is an actual example of how a company’s leadership style and organizational culture can impact its decision-making process, the behavior of employees, and, ultimately, its success. The case study focuses on the change in leadership style and the influence of organizational culture on the company’s decision-making process and employee behavior.

Evaluation of the Leadership Theory

The leadership style used in the case study is authoritarian leadership. During the early 2000s, GM faced a crisis, and the company’s CEO, Rick Wagoner, took a top-down approach to decision-making and imposed strict rules and regulations on employees (Kuppler, 2015). However, as the crisis worsened, there was a shift in leadership style towards a more participative leadership style, where the CEO involved employees in the decision-making process and encouraged collaboration.

The characteristics and decisions of management that helped explain the shift in leadership style include the willingness to involve employees in the decision-making process, a focus on collaboration, and an openness to new ideas. The change in leadership style was also influenced by external factors such as changing market conditions, increasing competition, and declining sales (Kuppler, 2015). Changes in market circumstances, greater competition, falling sales, and the need for a more participatory leadership style to enhance employee engagement and motivation are some of the internal and external pressures on the company. In addition, that may have prompted the shift in leadership style.

The relationship between the leadership style used by the organization and the decision-making process was significant. The authoritarian leadership style imposed by the CEO during the early 2000s resulted in a rigid decision-making process with little room for employee input (Kuppler, 2015). However, the shift towards a participative leadership style allowed for more collaboration and increased employee engagement in decision-making.

Organizational Culture Assessment

The internal culture present within the organization was hierarchical and bureaucratic, with a focus on top-down decision-making and strict rules and regulations. The rigorous decision-making process, the emphasis on rules and regulations, and the lack of employee engagement in decision-making are specific instances from the case study that reflect the internal culture.

Insights and Conclusions

The organization’s leadership style and internal culture complement each other, as the hierarchical structure of the internal culture supports the authoritarian leadership style. It is evident from the case study that leadership style and organizational culture can have a profound impact on a company’s success and growth. However, as the company shifted towards a participative leadership style, the internal culture also shifted towards a more collaborative and participative culture. The changes in leadership style and internal culture influenced each other, as the shift in leadership style towards a more participative style resulted in a more collaborative internal culture. Employee conduct is controlled by the organization’s leadership styles and internal culture. The hierarchical and bureaucratic internal culture, combined with the authoritarian leadership style, resulted in a lack of employee engagement and motivation. However, the shift towards a participative leadership style and a more collaborative internal culture led to increased employee engagement and motivation.

In conclusion, the GM Culture Crisis case study highlights the importance of leadership style and organizational culture in determining a company’s success. The shift from an authoritarian leadership style towards a participative manner, combined with a change in the internal culture from a hierarchical and bureaucratic structure to a more collaborative and participative one. This significantly impacted the behavior of employees and, ultimately, the company’s success. This example highlights leadership and organizational culture’s critical role in determining a company’s performance and the need to adjust to changing market conditions and be open to new ideas and methods. The GM Culture Crisis highlights the interplay between leadership style and organizational culture and how changes in one can impact the other. The case also serves as a cautionary tale for companies and leaders, emphasizing the need to continuously assess and adapt leadership style and organizational culture to ensure continued success and growth.

Reference

Kuppler, T. (2015). The GM culture crisis: What leaders must learn from this culture case study. WebArchive. Web.

Introduction

The success of a business highly depends on its supply chain metrics, which should be in accordance to its organizational goals. The metrics indicate performance, diagnose issues, suggest improvement and define expectations of a firm. If the metrics of a firm are properly formed, implemented, monitored and evaluated, they will lead to success. This case study discusses the effects of existence and lack of supply chain metrics of General Motors Company.

The Flaws that Led to the Collapse

There are various basic flaws in GM’s supply chain system that significantly contributed to the company’s collapse in the early 21^st century. The supply chain system personnel of the company were arrogant and did not care about the customers’ and dealers’ needs (Crumm, 2010). The company produced what they deemed appropriate and took it to the market for sale (they build the vehicles to stock and not for demand). The supply chain system lacked responsiveness at a time when the customers were more aware of their tastes and were more demanding. This was because of internet indulgence of the customers providing them with more market information on the commodities and services available in the market.

The supply chain system of the company also failed to follow up on the special orders that the informed customers placed on the market, causing delay in deliveries. There was the lack of visibility, which left the dealers and customers with no way of checking on the progress of the company on their orders. Increasing supply cost was increased by the lack of upgrades to the system, insufficient processes and the increase in the costs of raw materials and inventory costs (Cohen & Roussel, 2005). The various departments in the company kept pushing the customers’ orders back and forth to avoid responsibilities. All the abovementioned flaws were heightened by competition from rivals, causing the collapse of General Motors Company.

Indicators of the Collapse

Among the various indicators that showed the collapse would happen were the unsold stocks in the dealers’ premises. This was a clear indication of the fall in the demand for commodities and services for the company, and ought to have been looked into for better performance. The company failed to respond to the various constraints that were evidently pointed out by dealers and the customers (Crumm, 2010). The company lacked customer satisfaction drive and concentrated on stock, and this was its undoing since customers should be the main priorities.

Solving the Issues in the Company

However, the company, on noticing the collapse and dedicated its resources to come back to a leading position in the industry through various steps. The supply chain system increased responsiveness to customers by conducting market researches and introduced follow up programs on the customers’ orders. The company’s production aim was changed from being stock oriented to being demand oriented (Crumm, 2010). The company designed an approach to eliminate the various constraints in the supply chain system, which ensured better quality and services hence customer satisfaction.

Communication in the company was enhanced by getting all departments to work together for a common goal of customer satisfaction. Quality of the products and services were improved through reduction in the inventory levels (Cohen & Roussel, 2005). This reduced the costs incurred by the company as well as the time in which the products reached the customers. The metrics that were put in place were monitored and those that were working maintained. Those metrics that did not work as desired were either improved or dismissed.

The Company’s Future

In future, the GM’s OTD system aims to achieve reduced cycles and lead times. There will be production of more customized vehicles and parts as well as services. Through integration with dealers and increase in number of dealers, integration of the technology and advancing with changing times the firm aims to attain global systems and processes (Cohen & Roussel, 2005). The abovementioned changes will work towards the financial and strategic restoration of the company. The financial restoration may be effected through a reduction in inventory costs, quality improvement, and customer outreach. The strategic restoration will result from careful planning and formation of metrics by the involved departments and dealers to work towards the common organization goals through integration.

Conclusion

It is possible for the company to restore its leading position in the industry by adopting proper supply chain metrics that are focused on both the customer and the business. A large company takes time to adapt to changes in the market, and GM showed excellent responsiveness to stay in the market despite the collapse. The metrics they have already adopted presuppose a positive impact on both the customer and the business. The improvements to be made include order response time reduction, increase in material availability, improved inventory management, creation of logistic values, and search for more support from partners and customers.

References

Cohen, S., & Roussel, J. (2005). Strategic Supply Chain Management: The 5 Disciplines forTop Performance. New York, NY: McGraw-Hill.

Crumm, T. A. (2010). What Is Good for General Motors?: Solving America’s Industrial Conundrum. New York, NY: Algora Publishing.

General Motors, also called GM, is an American-based company, which has the international reputation for quality manufacture of cars and trucks. William C. Durant established the company in 1908 and currently, under the leadership of Edward Whitacre, it operates in sells and services of automotives in over one hundred and forty countries around the world. Employing about 244,500 people in its various manufacturing operations around the world, GM is playing a leading role in stimulating economic growth worldwide.

The automotive industry is exemplified by high profile trade disagreements as well as intense rivalry in this century. Since its establishment, GM has been undergoing important organizational changes from a traditional organizational model to a transformed organizational model in order to preserve its longevity in the market. This paper attempts to analyze the structure of the company and its organization style.

GM sells most of its vehicles to the U.S. market. For example, in 2008, out of 8.35 million cars and trucks sold globally, the U.S. accounted for 22.1% of the market share. The top four regional markets for the company are North America, China, European Union, and South America in that order.

The company has collaborations with different automakers around the world. Some of these are Shanghai Automotive Industry Corporation of China, Fiat, and Ford Motor Company. In the global market, the company has recorded significance performance in the Chinese market. For example, in 2009, the company sold 1,830,000 cars and trucks in China, which represented 13.4 percent of its total global sales.

The company is structured into various groups, which represent various regions around the world. These groups are GMAP (GM Asia-Pacific), GME (GM Europe), GM LAAM (GM Latin America, Africa, and the Middle East), GMNA (GM North America), and other operations in different places around the world. Each region has its own president who is answerable to the company’s CEO (“GM profile,” description section).

The Board of Directors, who makes important decisions that affect the running of the activities of the automotive corporation, manages the company.

For example, on December 4, 2009, the GM Board of Directors announced major leadership changes within the company that made Edward Whitacre, who had been previously serving in an interim capacity, to be appointed the company’s CEO on a permanent basis. The company’s mission statement reads, “GM is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success…” (“Company information, para.3).

Its vision statement “is to be the world leader in transportation products and related services (“Company information,” para. 5). The company operates in the automotive industry under the following brands: “Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling” (“About GM,” para.1).

In a traditional organization model, a hierarchical structure is usually observed. In this case, a president or executive is usually regarded as the top most official followed by vice presidents or the position of senior managers. After this, different levels of management follow. Most of the employees are usually found at the bottom of the hierarchy and jobs are grouped by function into various departments. Before major transformations were done, this was the case at GM (Taylor, para. 3).

The company was categorized into various autonomous automakers, which functioned separately and competed with one another. The autonomous automakers consisted of Buick, Cadillac, Oldsmobile, Chevrolet, and Pontiac. However, the rivalry and absence of centralization within the company proved to be an expensive affair for the company.

Therefore, GM adopted the transformed organizational model, which is centralized and cohesive than the traditional model. Regardless of its size or complexity, the company has been able to arrange its diverse workforce coming from different parts of the world to ensure that its operations are run in a streamlined manner.

All the company’s employees are now working towards a common goal and running the company has been more cost effective. In its transformed structure, GM lacks many different departments. Most of the company’s departments are performing the same tasks with related requirements. Thus, this centralized organizational structure makes more sense than the traditional one.

The adoption of the transformed organizational model has made GM to have centralized staff functions. The change that was carried out radically changed its diverse workforce, including its management, since they had to learn central set of skills.

For instance, before the adoption of the transformed model, every autonomous automaker was using different computer software for manufacture of vehicles. This resulted in miscommunication between its different departments. The diverse workforce at GM was to be taught the basics of a central software program which resulted in easier inter-corporation communication.

The large undertaking also made the company’s production team to centralize their operations and learn from one another’s methods of design and engineering, which has resulted in a more productive and easier communication among them. Currently, the diverse workforce at GM communicates and embraces teamwork when working. They no longer work as individuals in completing a particular piece of the puzzle.

The transformed organizational model enabled General Motors to merge its different brand operations. The traditional model made various operations in the automotive company to be redundant. This led to the wastage of resources and time. This is because its employees were duplicating work that had been already performed by another of the company’s eight different brands. The traditional model plagued the operations at the company for years.

However, the merger of GM’s eight brands into four distinct channels drastically changed this. Different vice presidents who are appointed by the company’s Board of Directors head each of the four channels. The United States marketing and field operations are currently more strongly aligned to form four retail channels: “Chevrolet, Premium (Cadillac, Hummer, Saab); Buick-Pontiac-GMC; and Saturn” (Hall, para.2).

As a major strategy in the competitive automotive market, the company is involved in efforts to streamline further its organizational structure. This strategy is intended to lower unnecessary complexity and align resources towards increased growth. Ultimately, the company hopes to regain the market share that it has lost to Toyota, which is a very efficient corporation in the industry. Another strategy that General Motors is using is transforming its portfolio so as to have very differentiated cars and trucks suited for every brand.

For a long time, critics observed that brands within the company were competing with one another in the market. However, the changes that the company has adopted have started to have positive impacts. For instance, Hall notes that “Buick has been geared up for luxury sedan models, while Pontiac will specialize in performance models and GMC is sticking with trucks and SUVs” (para. 4).

The transformed organizational model has made the employees of GM to work on the same page. All of them are working towards realizing the same objective of preserving the core competence of the company of innovation. Because of this initiative, the turnover of the company has dramatically increased in recent years.

Its dominant position in the manufacture of vehicles is largely attributed to the innovative culture that it has embraced in its transformed organizational model. Focus on innovation has also made the company to re-assess the market that it has been striving to approach.

For a long time, the company had embraced a traditional outlook for automobiles. However, with the changing tastes and preferences of its customers, GM has taken a step back to examine critically its position in the market. To maintain this innovative culture, all the heads of the regional operations hold frequent monthly meetings to assess the progress of the company. Global offices usually attend these meetings via phone; therefore, the CEO is able to monitor the progress of the company.

The structure of the company has been affected by various contingency factors such as environment and the lifestyle of its customers in various places around the world.

Because of the nature of its worldwide customers who exhibit distinct tastes and needs, the company has found it to be advantageous to organize along geographic lines most of its activities that can be managed together. Every geographic unit has all the operations that are needed to effectively produce and market products in that region; therefore, this assists in giving the multinational company a more unified face to its local users.

The company’s global corporate headquarters located in Detroit, Michigan, provides brand recognition as well as handling some collective administrative roles. On the other hand, the semi-autonomous local units around the world serve the function of day-to-day running and decision making for the company; hence, the company is able to grow faster.

In order to sell its vehicles to a diverse customer group, the company has implemented a brand management structure that is aimed at selecting diverse potential market areas. As a result, GM has been able to develop strategies to supply these markets with specific brands that meet their tastes such as the “all new” Pontiac Grand Prix, Chevrolet Malibu, and GMC Yukon. These have received an enthusiastic reception in the market.

The ever-changing consumer demographics have made the company to look for non-traditional methods of reaching different customer groups; therefore, its fresh image has started to emerge on different fronts. In efforts aimed at rebuilding its corporate brand image, the company is trying to reach clients in a variety of promotions and venues, for example, sponsorship of the WNBA and partnership with the fashion industry.

In this way, GM aims at reaching the users on their terms and gives them a reason for purchasing its brand of vehicles. In addition, with the evolution of the automobile industry, more consumers are currently using the World Wide Web to become better acquainted with different products before making the final purchase decision. Therefore, the giant automakers use E-commerce as a strategy for reaching diverse customer groups all over the world.

The company culture that is embraced within General Motors focuses on six core values, which gives it the road map on what it wants to accomplish. This is what defines the conduct of the business of the automaker and gives it its standing as a company.

All the workers of the company around that world are aware of the six core values since they are the drivers for the company’s key decisions and activities in all the nations. The first core value is customer enthusiasm. This calls on all the company’s employees to strive in fulfilling the varied tastes and preferences of the customers.

The second is teamwork, which stresses the fact that the company is composed on a unique workforce; therefore, embracing teamwork is the only way to succeed. In this century, GM is faced with intense competition from market rivals such as Toyota and the Volkswagen Group. That is why the next core value focuses on innovation, which is aimed at giving the company a competitive edge in the market. The core values of individual respect and responsibility focuses on respecting the employees’ health, safety, and dignity.

Serving different customers around the world, General Motors has abandoned most of the traditional ways it employed in carrying out its operations. Although it is ranked at position two after Toyota in the automotive industry, it still has several competitive advantages.

These include a large market share that exists throughout the world, years of global experience in dealing with different customers, and a variety of brand names that appeal to all the target markets. However, in as much as the structure of the company makes sense, it must continually adopt changes in this dynamic world in order to maintain its market leadership.

Works Cited

“About GM.” GMC. General Motors Company. 2010. Web.

“Company information.” General Motors. General Motors Company. Web.

“GM profile.” Investorguide. 2010. Web.

Hall, Kenneth. “GM finally merges brand operations.” Motor Authority. High Gear Media. 2009. Web.

Taylor, Alex. “GM Gets Its Act Together. Finally How America’s No. 1 car company changed its ways and started looking like … Toyota.” Fortune. Time Warner Company. 2010. Web.

Introduction

Indubitably, General Motors Company (GM) is one of the largest vehicle manufacturing companies in the world. Currently, General Motors employs over 325,000 people around the world. Although headquartered in Detroit, General Motors has over 120 branches in different countries, 31 of them being manufacturing centres.

Primarily, General motors and its strategic partners manufacture vehicles but sell them in diverse brands such as Opel, Isuzu, Chevrolet, Holden and many more to interested buyers all around the globe. According to the recently released statistics from GM’s department of logistics and supply, China tops as the biggest market for GM’s products.

Other major market places include countries in the European Union such as Germany, France, Russia and United Kingdom. Traditionally, the automotive industry has employed a business model of mass production where automotive companies rely on mass production for competition.

Providentially, this was the then fortitude of competition. However, as time went by, the mass production of vehicles from other automotive manufacturers such as Toyota and Ford became irrelevant. On the other hand, demands and expectations from customers intensified forcing many manufacturing companies to reconsider their logistics and supply chain management.

The paper is an executive summary of General Motors Company and will specifically look into the past successes and failure, current economic and financial situation, and economic and financial future (Cooper 1).

Past Successes and Failures

Since its foundation in 1908, General Motors grew form a small holding company into a leading manufacturer of motor vehicles. During this period, General Motors experienced a number of successes and failures. The road to GM’s success started in 1908 when its founder, William Durant, devised ways of expanding the horizons of the company.

However, the company was one year later plunged into financial distress that threatened its collapse. Since most American businesspersons had seen the business idea of GM, some bankers pumped financial resources into the company thus, preventing its collapse.

The company was again back on its feet, and in 1911, it entered into the international market by making sales outside North America. Durant who had been ousted from the company he founded, moved on to create another company, Chevrolet, which enables him to come back to General Motors in 1915. History categorically states that GM started growing hysterically.

During this time, GM sold the highest number of Cadillac vehicles, and in 1918, GM acquired another motor company, Chevrolet Motors. The economic recession of 1920 caught the company by surprise and Durant was again affected as he found himself outside the ranks of General Motors Company.

Nevertheless, the financial boom of 1920s helped the company to regain back setting another success mark. The number of auto sales hit 4.5 million mark, and by this time, the company started competing with other giant automakers such as Ford and Chrysler. At the helm of GM’s hierarchy was a brilliant engineer and marketing genius, Alfred Sloan, who led the company to outdo the then successful automaker, Ford.

Although Ford had been successful in those days, its philosophy being to “offer customers product equivalent to the value of their money”, it offered little variety. GM under the leadership of Sloan, capitalised on this weakness by coming up with products of different stylish colours, features and comfort. Eventually this became the new motto of the company.

Additionally, the company unleashed a brilliant offer into the market where the public took products on credit. This offer in addition to the looks and styles of the five brands of GM (Cadillac, Buick, Oldsmobile, Pontiac and Chevrolet) increased the number of sales, and GM eventually overtook Ford from the number one spot.

However, another failure came in 1929 during the great Wall Street Crash forcing GM to abandon all of its expansion programmes. Notably, stocks of GM in major trading exchange centres fell terribly. Three years later, the company found itself rolling again and to mark its return, GM bought the Yellow Coach bus company and Electro-Motive Corporation, which enabled the production of diesel locomotives.

In 1955, GM became the first automaker to make over a billion dollars as revenue. Other successes include GM being the largest corporation in United States at one time and the greatest employer in the world at specific times.

On a sad note, GM was recently hit by financial woes that saw over 30, 000 employees leave their positions in addition to $4 billion losses. However, the Obama administration has poured in excess $30.1 billion into GM to help it regain.

Current Economic and Financial situation

The current global economic and financial crisis has always posed a serious dilemma to many companies including GM. Currently, the revenue stands at $193 billion, meaning GM is standing at the crossroads. Although 30, 000 employees no longer work for the company, the company pays $8.7 billion as wages.

This means that that if GM shuts its operations, over 1 million jobs it supports will also be lost, which is a big blow to the economy. For instance, the 1988 labor industrial action that shut GM’s operations for 54 days had serious negative impacts to the economy of US. All is not well at GM, for example, in the first quarter alone of the year 2009, the company made a loss of $1.1 billion.

The $1, 600-per-vehicle legacy costs also threaten the operations of the company, and soon, the consequences of junk-bond ratings might affect it further. Since the year 2000, the company has continually lost its market value (43 billion) – currently stands at 74 percent. This has scared away investors as GM no longer enjoys its fundamental business—that of selling cars.

The huge losses incurred means that GM cannot afford to invest more in technology and design. This has resulted into a decline in sales by 5.2 percent in United States alone. The market-share has declined to its lowest in four-decade history to 25.6 percent. For the first time in the history of the company, the total expenditure is higher compared to the total revenue generated from car sales (General Motors Company 8-20).

Economic and Financial Future

The US government took measures to halt the further collapse of GM. By injecting $30.1 billion into the company, the company is now emerging from bankruptcy. 17 months down the line from June 1, 2009, GM started trading its shares again. Additionally, the company has marked major changes to exude confidence in the market.

Dubbed the new GM, the company/s main objective is to rejuvenate the number of sales through anew business model. Over the next five years, the company plans to lower cost structure, develop an ambient balance sheet and minimize risks. Moreover, the company intends to enter equity market and register its mark in the NYSE balcony.

GM has also collaborated with other business ventures internally and externally in Brazil Russia, which has seen robust sales of all brands. Additionally, at the start of 2011, the company came up with new design vehicles Chevrolet Silverado HD that has since won the Motor Trend Award.

By reducing cost base and restructuring operations in North America, GM has announced revenue of $5.7 billion before tax. Additionally, the company has managed to cut its debt by $11 billion, injected over $4 billion cash contributions into the pension plan, and continues to maintain a strong liquidity position.

Advanced technology, improved customer relationship through dealer networks, and financial discipline are the long-term strategies of building the new GM (General Motors Company 22-288).

Work Cited

Cooper, Victoria. General Motors Profile: Driving Customer Satisfaction. 2010. Web.

Motors Company. 2010 Annual Report. 2010. Web.

Organizational structure comparison

The organizational structure of an entity is a critical aspect of management. The structure contributes significantly to the efficiency, service delivery, and success of a firm. There are varieties of organizational structures, which an organization may assume. Such structures have many implications on factors such as cost, human resources, and chain of command in an organization. The structure adopted should ensure that communication among its departments or employees is effective, proper allocation of resources, reduced cost, and bureaucracy.

Companies adopt varying structures depending on their philosophy, industry, size commodity, and profitability. General Motors (GM) is a leading entity in the automobile sector. Consequently, the entity has massive revenues. The entity has various assembly plants in different parts of the globe. These plants are located to serve certain regions. The location of production plants ought to be strategic as the entity targets potential customers in certain regions.

GM has a hybrid structure, which blends in central and regional forms of organizational structures. In Michigan, the entity has its headquarters, which houses its financial department. Among other core departments in GM’s structure include GM North America, GM South America, GM International, and GM Europe.

A divisional structure differs significantly from the current structure adopted by GM. A divisional structure entails separating the organization as per the products. However, the hybrid structure embraced by GM is different since it blends in centralized and regional structures. A centralized structure entails having most branches of an entity in a single location. GM has most of its departments at its headquarters in Michigan. The European and South American subsidiary has offices in the headquarters that liaise with the top management personnel of the entire corporation. In a divisional structure, there is interdepartmental competition.

It may also occur in the hybrid structure since GM has various brands, which may compete amongst themselves. In the two structures, the unprofitable division in the divisional structure or brand in GM’s structure would be dropped in case of restructuring. The divisional structure would favor an entity that only manufactures products without undertaking any other responsibilities besides manufacturing. However, the hybrid structure is a compromised structure, which integrates other functionalities such as marketing and brand creation.

A functional structure has been employed by many entities globally. The entity departments are divided based on functionality. Subsequently, the entity will have departments such as finance, marketing, and production. This organizational structure encourages specialization. However, it results in duplication of responsibilities. Duplication of responsibilities results in inefficiency since an entity expends its resources on a single object in various departments.

Coordination of these departments is difficult. It affects the efficiency of the organization in its entirety. This structure would be unfit for GM owing to its scale of operations. The functional design is integrated into GM’s regional structure subsidiary. In Europe, the GM subsidiary now adopts this structure to complement the overall structure of the organization. The integration of such structures creates a hybrid organizational structure, which suits GM. There is not a specific organizational structure, which would suit an organization adequately. Nonetheless, managers make adjustments to guarantee the structure suits their organizations.

Evaluation of organizational functions about the structure

The financial aspects of GM have impacted massively on the structure of this organization. Between 2002 and 2009, the entity performed extremely poorly. The entity’s brands were no longer attractive and practical to most consumers amid the economic crises. Consequently, its sales dwindled resulting in massive losses. The government had to support the corporation with a massive bailout. Accordingly, the entity had to show financial prudence to prevent similar events.

The entity consequently closed many unprofitable plants that contributed massively to the level of its expenses. Furthermore, the entity had to lay off some of its workforces. The financial aspects of this organization have engineered massive changes in the organization. The organization is now more efficient. GM had to drop some of the brands that were no longer sustainable. Hence, GM now concentrates on a few brands, which can market adequately, resulting in relatively higher returns. GM has a structure, which combines both central and regional managerial structures. Under this structure, each regional subsidiary has its marketing strategy.

GM North America has its marketing strategy suited for its clientele. It is replicated in its European and South American subsidiaries. This kind of marketing allows each regional subsidiary or branch some autonomy. This kind of autonomy is essential since regional branches encounter varying challenges owing to differences in consumers’ preferences. The human resource is the most important in any entity.

However, in this entity, it has minimal influence on the organizational structure. The structure of this entity is driven largely by its brands and other factors such as trends in the industry. Some notable trends in the automobile industry include environmental initiatives that seek to create a hybrid, electric, and fuel-efficient automobiles. Operations is a key cost driver in this entity. The entity has closed operations in some of its plants that are less profitable to curtail costs. Similarly, it has also dropped some of its brands that were infeasible (Baligh, 2006).

Organizational designs

GM has established subsidiaries in various nations to tap into lucrative markets. Brazil is the largest buyer of GM products on that continent. Accordingly, the entity has a good network on the continent, which captures Brazil and other countries such as Peru and Argentina. This kind of structure has assisted the entity to meet some of its organizational needs. These needs include the promotion of products and tapping into new markets.

Europe is another vital market segment for this entity. In Europe, it operates under various brands, which are under distinct subsidiaries. In England, it operates as Vauxhall, while in the rest of the European nations it operates as Opel. The regional structure has enabled the entity to access the global market. In some nations, where the entity has no subsidiaries, it has entered into joint ventures. Joint ventures have enabled the entity to curtail possible losses that may emanate from entry into another market. A joint venture also provides an entity with time to assess the potential of a market. Consequently, it can decide whether to establish a subsidiary.

Departmentalization is crucial since it enables the entity to meet some of its needs. The most pronounced department in the entire corporation is the financial department. All managerial work in GM is undertaken in this department. The decisions made in this department impact other sections of the corporation in various ways. Marketing is crucial in GM. The entity faces massive competition from Japanese carmakers that have dominated the American market. Marketing channels helps the organization meet its needs by promoting its brand, which increases revenues (Daft, 2006).

References

Baligh, H. (2006). Organization structures: Theory and design, analysis and prescription. New York: Springer.

Daft, R. (2006). Organization theory and deasign. Princeton, N.J: Recording for the Blind & Dyslexic.