Impact of Economic Downturn on GM
General Motors is one of the largest world’s automakers which was founded initially in the year 1902 and it focus on remarkable focus in the automobile industry in different nations such as America & Asia Pacific. GM also focus on vehicle protection and information services. This increases the selling of cars and also trucks in different nations. The automobiles and the tools were affected by the global economic downturn in the year 2008. The global economy and the recession had adversely affected the revenues as well as financial situations. (Berger, 2008)
The company was highly recognized and successfully managed organization in the world. The market of US decreases from 46 to 20 percent and the change in the market share decreases the price of market share. The decline of the shares were dependent on the competitors and costs of health care approaches and labor is very difficult and incomplete. It involved lack of knowledge and understanding to deal with the competition and there were no abilities and skills to follow the market goals. There were failure based on nature as well as competition and there were inabilities to deal with the responses. (Cheney & Christenson, 2001)
The challenges associated with the company is to develop the relational contracts based on the modern design as well as manufacturing. There were risks based on the challenges and the practices to focus on the suppliers and the blue collar people were homogenous and it helps to look the expertise with less knowledge and it is based on the hierarchy of management. This is dependent on the strong and well – formed financial activities. The experience of GM might have risks to know the management roles and responsibilities in the modern organization.
General Motors faces changes with high losses of jobs and advancement of new leaders. It helps to develop the rapid changes in the country and both the internal as well as external parameters focus on the change. Huge stress based on economic situation, government implementation, competition and technology cause change in the organization. To remain successful, people cause change and to be successful, organization enhances the approach of environment to deal with the necessary changes and requirements to deal with those. As per the case study given on General Motors, change occurs with economic situation on a global front and the loss of financial resources. (D’Aprix, 2006)
As per the theory known as Style theory, it says that employee can work in a better way while dealing with the best style of the management. In terms of the style, it focus on the group of people where one can perform based on the styles of leadership. This way, it is based on transactional approach where the rewards as well as complaints are given based on the performance of the workers. This describes the performance of the work and the subordinate is completely based on the situations. It is dependent on goal achievement and the tasks as well as objectives setting. It remains successful and it is motivated by reward, recognition and amount. Transformational leadership approach is based on the commitment and motivation so as development of followers. It helps to focus on the vision and deals with performance. The transformation leadership approach helps to involve in the needs of people. It is very important and it helps to enhance the competitiveness in the global competition. (Deetz¸2001)
Evaluation of Leadership and Management Styles
GM should evaluate the situation and deal with the strategies and the success of the organizational change is importantly based on the leadership of senior management. Again, the theories and application will be discussed in the section such as:
Leadership theories: Leader is known with respect to responsibility and the accomplishment of goals. There will have skills to develop the chances of decisions as well as actions. This create the skills to develop the behavior and abilities to form social communication successfully. A leader who motivates his or her followers has high ability to be called as a true leader. With the leadership theories, the characteristics and approaches involve in the success. (Cutlip, et.al, 2006)
The qualities of leadership deals with the primary qualities among the leader. It is dependent on physical parameters such as height, appearance etc. and the traits define the abilities of people that includes intelligence and the self – confidence as well as emotional control. (Deetz, et.al, 2000)
Management in the company helps to develop the analysis on the styles and approaches of the company. The models and theories of leadership is based on the framework used for personal styles and self – reflection. It occurs with successful leader and there is a willingness to deal with the important changes to the workplace. It influence the management to deal with the particular task. With respect to GM, the chief executive of the company was forced to go down from the designation. Mr. Henderson had completely worked with the former president of the company and Mr. Wagoner in his overall career. (Gay, et.al, 2005)
According to the case, there could have huge challenges for the company and it might be difficult to deal with the issues. There were issues related to the stability and power. Mr. Henderson was successfully focusing on developing the company in terms of traditional approach based on the crisis. With this analysis, it describes that the former CEO was not convinced for the modifications. It can be defined as the transactional leader where the proper structure should be formed and Henderson should be related to goal – based where he can deal with his subordinates and become successful with effective steps. He had performed the favorable job in the leading association and dealt with modifications as well as risks. (Edelman, 2008)
On the other hand, Mr. Henderson is also one of the transformational as well as charismatic leader in the company. General Motors was looking for external people who can deal with the tasks without any attachments. While accepting the role, Mr. Henderson focused on the management related goals and dealt with his vision to his followers. He also want to offer high responsibilities and challenges to the organization with accountability and decision making skills. The company focus on the responsibilities of leadership and management to meet the goals and objectives and to develop the best vehicle in the world. (Gillis, 2006)
Changes in External Environment Affecting GM
The organization ‘GM’ is focused on experiencing changes based on the instability as well as inconsistency of the environment. It focus on organizational change and deals with the driving force like lack of productivity and new customers etc. These changes are formed in the company with the knowledge of internal as well as external analysis in the company based on the performance. The analysis of Pestle and SWOT, internal resources will be discussed in terms of environmental scanning and there will have the discussion on change implementation and formulation. (Gray & Laidlaw, 2004)
Pestle analysis – It is a framework that deals with political, economic, social, legal and technological approaches of the analysis. GM is affected by different rules and laws and it is based on the concerns of environment and safe as well as protected automobiles. There are restrictions with European Union and the heavy metals uses with respect to environmental concerns. Thus, the laws and rules based on vehicle emissions have been tuff and since 2008, there has been severe impacts on global crisis on credit due to recession in North America as well as Europe. This creates less stability in the prices of oil and decreases the amount of employment as well as spending of consumer. (Grates, 2006)
Other important tools based on social as well as environmental parameters are the increased amount of environment in US and Europe. GM has focused on the term corporate social responsibility in different business goals. This involves CSR in all business terms. It involves operations and production of materials so as cars and trucks as well as low level of emission based on greenhouse gases. Society has been very materialistic and it target each market based on the income as well as status. The other tool is called as technological parameter that deals with PESTLE analysis. The increase in the age of internet has impacted the automobile sector and others as well. The company can increase huge benefits with the help of internet because of more consumers and it can focus on products more successfully. (Grunig, et.al, 2002)
Important technique that is called as PORTER’S FIVE FORCES is based on the analysis of competition and profits. These five forces involve competition from substitutes and new entrants, supplier’s power, buyer’s power as well as rivals. While dealing with the replacement of automobiles purchase, users can focus on public transport such as buses, trains as well as bicycles. Users can select from different automobile products which are not linked with GM and develop high risks and threats. High level of entry barriers like high amount of capital focus on threat of new entrants. There is a low bargaining power of suppliers and thus, suppliers rely heavily on the automakers to deal with the raw materials purchase like steel, paint, glass as well as aluminum. With this approach, there are high risks of buyers and clients select not merely from the manufacturers of automobile but also from the dealers of automobile. There are high amount of rivalry based on the competitors of General Motors and the major competitors involve Toyota Motors and Honda Motors as well as Ford Motors. (Harris & Nelson, 2008)
Utilization of Internal Resources to Achieve Goals
Based on the research, the analysis of environment needs an identification of the organization depending on internal environment. Internal analysis is based on the skills and resources and an organization look for knowing the strategies successfully. An internal audit is formed with the human, financial and other resources that can involve in meeting the strategies of the organization. (Levine, 2000)
The company employs more than 200,000 people over the globe and it has developed the environment of the business depending on the mutual trust as well as respect and understanding. The goals of GM is to offer high roles and responsibilities as well as authority to deal with them in an accountable manner. Thus, the company believes in meeting with employee’s empowerment. (Haslam, 2000)
The company knows the importance of performance in work life and personal life balance. General Motors is based on the largest employers in the globe and the advantages by the company are very high. It deals with the advantages such as medical pain and it involves dental as well as medical insurance, paid holidays and offers on different products as well as services by GM. The management and employees of the company are fully satisfied and highly committed to develop the market share as well as revenues and profits with the aim of pay back of loans in the year 2010. (Holtz & Hobson, 2017)
The performance of external as well as internal influence has developed the strong approach with the help of SWOT analysis and it can be related with the resources as well as skills in the workplace. The limitations on strategies will be determined and SWOT will focus on strengths as well as weakness, opportunities as well as threats which is used most importantly for dealing with the management tools and techniques. (Jones, et.al, 2004)
Strengths – GM do not focus on strong portfolio of brand but also includes wide range of portfolio of regional brands such as GMS and Saturn. The portfolio of brand expands the global market and it helps the company increase the edge of competitiveness. It has high presence of geography in different locations and it spread the risks factors across the global regions. (Middleberg, 2001)
Weakness – There is a huge losses in the company based on the operations as well as restricting. The position of the liquidity in the company is based on the performance that was impacted in a negative manner by the situations of the industry. There was a high decline in the major business segments. (Lukaszewski, 2006)
Conclusion
Opportunities – The high level of experience in the market of global truck is based on the growth as well as development since 2004 and 2008 and it will increasingly grow in the long term. This can impact the revenues as well as profits in the business. It can also deal with the demands of hybrid electric vehicles and the company can deal with the growth of new and modern tools as well as technologies for meeting the eco-friendly products. This would help in enhancing the demand of the products in the company. (Jablin & Putnam, 2001)
Threats – With respect to global recession, the business can be impacted in terms of revenues, operations outcomes, cash flows and financial situations. The industry is very competitive where the company face trouble of strong competitors. There might have negative impacts in terms of pricing as well as market share of the vehicle. (Izzo & Withers, 2000)
As per the researcher, the types of managers’ stress are the atmosphere, new visions and desires in future and the basic importance to organization. It helps to continue on dealing with the outcome of change with respect to stability. These stress for change are stable and benefits to change the workplace are strong integration, values and mindsets as well as teamwork. These advantages can help to meet the effective outcomes in the organization and with respect to the change forces, there are higher level of economic development, decrease in the technology and the downturn of social nations as well as reorientation. (Insidedge, 2007)
Theories based on change management focus on approaching the planned approach to the changes with the planned changes approach and this can be dealt in the organization. The first model is John Kotter’s approach of change that was formed in the year 1995 and to develop the importance of challenges as well as risks, the major step is to focus on strong changes in the group. The second method develops the powerful change to deal with the changes that can be planned for developing the structure of the team to deal with the changes and to make sure that the teams have enough power and abilities to deal with the change. (Modaff, et.al, 2008)
To develop the vision is important to focus on the change. This could be interacted with multiple sources and help in the communication of vision. It could empower the staff members by removing the policies in the organization and structures that could meet the vision as well as achievement. The organization could deal with employee empowerment and it will help to support the change needs as well as it will offer high level of motivation. To manage the gains is the major strep and it could be referred to those who believe in active rewards and positive change. It could related with organizational performance as well as leadership.
In the year 2007, the company General Motors recorded the amount of sales of more than nine million vehicles for the three consecutive years. With due respect on profits as well as achievement, there were environmental turbulences like global recession and it forces the company to remain bankrupt. It is known as the highest failure in the company in the US history. As per the article, the company can file bankruptcy issues and it is called as the major company in the globe which has been decreasing the market share since 1980s. These causes can lead to the tasks that are based on high costs of production and consumer spending. The auto maker was less in dealing with the production and consumers look for more fuel effective vehicles. With the help of restructure of the company, the resistance to change is very difficult.
The use of the Bridge’s transition model follow the radical changes that forms in General Motors and it can be implemented. In the first stage, there has been the realization where there are high level of risks based on the goals as well as operation system. General Motors follow the fact with the success is dependent on the US government, the company left the shares of 60% hold by the government.
Thus, an automaker was an iconic symbol in the American auto industry. It was important to store it and GM when entered in the second step, the major challenges as well as outcomes to the changes that were focused. As per the Bridge, employees as well as management feel self-protective as well as resentful. It is possible for people to remain confused by going back to the old times. The website of the company states that the company has new structure of global operation and the team of leaders as well as GM website. (Mumby, 2001)
The newly appointed CEO focused on the authorities by dealing with management to enhance the creativity as well as accountability for the performance in General Motors. The reorganization as well as restructure of employers were scared with their jobs. Interaction is important to focus on the workplace relations. To deal with anxiety as well as anticipation, there should have growth and development for long term. The major changes of leadership is important and with General Motors, the company can involve in the new beginnings and the company can get rid of Buick and GMC. Thus, it is important to develop the brands like Chevrolet etc. It will focus on reducing the structure of the price and form the healthy balance sheet with less debt. This will help to spend in innovative products as well as modern tools and technologies’.
The importance to change is formed with the newly managed GM and to leave the neutral approach of change, it was important to deal with the change outcome. The reasons to deal with the change are based on security, economic parameters and chosen information processing. In terms of General Motors, management as well as employees were dealt in the traditional manner of company’s operations. The layoffs as well as restricting is important and it can lose the amount of safety as well as anxiety.
The change agent should work at the middle of the change approach and it is vital to deal with the major jobs. To create the strong association among all the parties in the change process, it is important to develop the trust, commitment as well as mutual respect. The change agent is also called as the organizational leader. With respect to the initial stage of the company to the modern times, the CEO was Mr. Ed Whitacre. According to him, there was the importance of organization growth with respect to the change in the people as well as structure. The change is effective and successful with the reallocation of power in the organization and the decision making is shifted to shared goals.
The CEO and the managers had to perform together with the team to deal with the necessary changes. There might have concentration on the responsibility of transformational leader. According to leaders, they are important to deal with the proper focus on ways to keep the organization successful and to meet the goals as well as objectives. Organization should track the goals as well as objectives on the major ways. Leaders should not develop the effective change on their own and there is an importance to deal with the encouraged teamwork and acceptance of losses.
Conclusion / Recommendations
While dealing with the General Motors, the company was focused to meet the fast changes with the correct skills of leadership and important actions need to be focused to enhance the level of effectiveness as well as to reduce the power and control. As per the author, the resistance to change can be effectively managed with the interaction with the followers as well as involvement from everyone and negotiation among leaders as well as subordinates. (New Media, 2008)
Mr. Whitacre focused on the email when the company was experiencing huge troubles and difficulties, it was not successful. Subsequently, there could have video conferencing with the employees and with this approach, there is not only the focus on body language but also there is a focus on emotion. Communications play an important role to create the feeling involved and developed in the work place. Without any communication or incorrect information, people can form apathy. Since the General Motors wanted to increase the innovativeness, it is important for the company to deal with the innovativeness. Thus, it is recommended for the company to deal with the people with new aspects of tasks and opportunities for collaboration. There is a need to enhance the level of creativity and it can be met by offering training needs with respect to the technique to develop the innovation and enhance the experiment. It can focus on the opportunities to tackle the challenges and this could be stored by the changing agents as well as leaders. (Rhee, 2003)
Thus, to conclude, General Motors can understand the challenges and strongly decide to change the workplace with respect to goals accomplishment and objectives. It can act effectively and focus on the radical needs and changes. With respect to the outcomes, the company was allocated the leader who is transformation and can step with change as well as complex issues for future term. (Putnam & Boys, 2006)
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