Scribd
Upload
78 views

GM Case Study

General Motors underwent significant organizational changes in response to financial difficulties in the late 2000s. The company declared bankruptcy in 2009 and the US government took a 60% ownership stake. This forced GM to restructure. The company was renamed and new leadership brought in from outside the auto industry. Ed Whitacre was tasked with reforming GM's outdated organizational structure. The changes implemented a new strategic focus on innovation, sustainability, and building strong employee and customer relationships to improve competitiveness against foreign automakers.

Uploaded by

Iwa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
78 views

GM Case Study

General Motors underwent significant organizational changes in response to financial difficulties in the late 2000s. The company declared bankruptcy in 2009 and the US government took a 60% ownership stake. This forced GM to restructure. The company was renamed and new leadership brought in from outside the auto industry. Ed Whitacre was tasked with reforming GM's outdated organizational structure. The changes implemented a new strategic focus on innovation, sustainability, and building strong employee and customer relationships to improve competitiveness against foreign automakers.

Uploaded by

Iwa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Case Study

Organizational Change: Case Study of General Motors

1. Describe GM's operations before organizational change


Founded in early 1900 by William C. Durant, General Motors (GM) is the biggest
automakers in the world. The company produces, sells, transportation vehicles and auto
parts. Durant established the Chevrolet Motor Car Company after temporarily losing control
of GM. Alfred P. Sloan, Jr. took over as GM's head of corporate shortly after Durant was
fired from his executive position. Additionally, GM established the Pontiac division, which
caused the Oakland brand to disappear. Sloan's leadership helped GM grow become the
industry leader in American automobile production.

2. What factors forced then to undergo organizational change


2008 GM saw a financial downturn. Since GM declared bankruptcy in 2009 and the
U.S. economy is already in a position of crisis, the U.S. decided to take ownership of 60% of
GM. The following are the factors that had an impact on GM and made them restructure their
organizational structure.
1) Competitors - Competitive brands from Japan, Germany, and Korea provide
consumers with a significantly better price since they are less reluctant to adopt new
trends and adjust to market demands.
2) Hesitancy to change – The organizational structure is outdated and has a hard time
changing.
3) Unsustainable Strategies - Instead of generating and sustaining positive net cash
flow, GM has prioritized increasing market share and revenue.

3. Describe the changes implemented and its effects.


General Motors Corporation was renamed General Motors Company in order to
relaunch the business. Along with the name change, the internal organizational structure
also has to shift, but the existing leaders were resistant to the shift and couldn't agree on
who would take the leadership. As a result, in order for GM to survive, the government
required it to make significant modifications. The federal government eventually demanded
that an outsider enter the business and reform it. The assignment was given to Ed Whitacre,
a prominent figure in the telecommunications sector. For a corporation that had never truly
required to manage its assets efficiently, these organizational changes were significant.

4. What other changes should they implement to ensure competitiveness?


In order to build a successful organizational structure the following are recommended
to be done:
1) When problems are recognized immediate solutions must be planned.
2) Innovate and make strategies sustainable. There would always be gradual change
over time in the competitive market, especially on transportation vehicles as
technology evolves.
3) The organization must build healthy relationship with their employees.
4) Prioritize your clients and your relationship with them if you want to preserve their
loyalty.
5) In order to ensure the partnership and prevent financial crises, the company and
stakeholders must work together to create contracts that are efficient and
sustainable.
References
Carzon, M. (2016, July, 25.) General Motors.
Dines P. (2018.) Entry Strategies to the Chinese Automotive Industry. Retrieved
https://rucforsk.ruc.dk/ws/portalfiles/portal/62533398/General_Motors_Project.pdf
Loy, B. (2023.) Organizational Change at General Motors. Retreived
https://study.com/academy/lesson/case-study-organizational-change-at-general-
motors.html

You might also like