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Introduction
The ability of the current CEO of GM to handle a crisis is phenomenal as she decided not to engage in a defensive or denying position but speak clearly, addressing issues and accepting personal and organizational responsibility for them (Bumpy Ride; Testify). Barra demonstrates good managerial skills by effectively handling a crisis and increasing transparency of the company.
The three concepts chosen for the case study analysis are crisis management, the degree of centralization, and organizational culture (BACW). When handling a crisis, it is not only essential to be open about the issue but also to support communication in the organization to understand how unethical or illegal (in case of GM) employee activity resulted in a crisis. Although this crisis severely affected GM, Barra found a way to transform the issue into change, introducing new policy “if you see something, say something” (Day, p. 2).
She restructured engineering operations to ensure that any potential safety violations were addressed as quickly as possible. By improving communication among employees, Bara has created a buffer for future crises that could potentially prevent them. As stated in one of the articles, due to the culture of silence that prevailed in the company from 2000 to 2014, the company was unable to identify the problem and struggled to resolve it even after it began to lead to deadly outcomes (Bumpy Ride).
Barra’s focus on transparency helped her change the organizational culture; at the same time, with this approach, she also addressed other corporate issues such as the centralized nature of GM and bureaucracy’s influence on inner leadership. Barra’s decision to remove former complex rules regarding the dress code at first resulted in backlash, through which she was able to help managers understand that their role was to lead the employees and not to count on the CEO every time any minor issue emerged (Dress Code).
Although the dress code policy seemed simple at first, it transformed the decision-making process at the company, delegating the decision-making authority down the chain of commands (BACW). Furthermore, she also narrowed the span of management, because top managers did not lead the majority of employees but the authority was spread among different leaders with a different degree of supervision. It appears that the bureaucracy, resulting centralization of power, and the culture of silence lead to the defective ignition switch, as company’s employees were aware of the problem but were either too afraid or too indifferent to discuss it with executives or top managers.
Organizational Culture
The changes in organizational culture did not only concern the degree of centralization and crisis management. Barra was able to teach employees to view the product from a new perspective. She asked engineers to visit a store and see the products as customers see them (Barra CEO). Shifting the focus from horsepower and sporty design that was valued by the previous CEO, Bob Lutz, Barra demonstrated engineers that customer-oriented view was needed to make GM “product czars” again (Barra CEO, p. 2). They considered how the design, production, and manufacture process could be altered to improve GM’s image both among customers and GM’s employees.
One of the specifics of GM organizational culture that has also significantly impacted the company is Barra’s decision to stick to sustainable return instead of ambitious sales. The aim was to improve the company’s performance in specific markets rather than trying to please every market that exists (Unwavering). The goal to increase annual sales volume by Volkswagen eventually led to the so-called Dieselgate, which had cost Volkswagen millions of dollars. Barra’s decision to focus on separate markets and countries seems to be more reasonable, considering the recent crisis and former bankruptcy of the company.
Barra’s Strengths
One of the greatest strengths of Barra that helped her influence organizational culture is the fact that she was an insider for more than 30 years (Day). Her experience in holding different positions, from a manager of a plant to an HR director, supported her strive for transparency as she was aware of inner issues that were not resolved at GM for years. Additionally, she supported the culture of awareness, pointing out to employees that she did not want to put the crisis behind the company, i.e., forget it as soon as it was resolved (Day).
As GM has already let down its customers, Barra’s emphasis on customer and customer-oriented culture is understandable. To provide GM with a second chance and rehabilitate it in the eyes of the potential clientele, Barra must ensure that the company’s employees share her vision of GM and understand its new core-values statement: customer comes first (Bumpy Ride). With the change in the organizational structure and culture, Barra was able to suggest new rules how employees should approach and resolve problems (BACW).
As can be seen, Barra became an effective manager because she was able to transform organizational culture, managing crisis by improving communication and transparency. Being a long-term insider helped her understand what exact changes GM needed to become a successful company after the crisis.
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