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INDIVIDUAL ASSIGNMENT

LORD BUDDHA EDUCATION FOUNDATION


MANAGING CHANGE (BM029-3.5-3-MCHG)
LECTURER: SAJANI NEPAL
MANISHA AGRAWAL (NP000005)
NP2F1701BM
HANDS OUT DATE: 11 FEBRUARY, 2018

HANDS IN DATE: 30 March, 2018

WEIGHTAGE: 60%

WORDS COUNT: 2443(approx.)

INSTRUCTIONS TO CANDIDATES

1. Submit your assignment at the administrative counter


2. Students are advised to underpin their answers with the use of references (cited using the
Harvard Name System of Referencing)
3. Late submission will be awarded zero (0) unless Extenuating Circumstances (EC) are upheld
4. Cases of plagiarism will be penalized
5. The assignment should be bound in an appropriate style (comb bound or stapled).
6. Where the assignment should be submitted in both hardcopy and softcopy, the softcopy of
the written assignment and source code (where appropriate) should be on a CD in an
envelope / CD cover and attached to the hardcopy.

7. You must obtain 50% overall this module.


Acknowledgment

I would like to express my deep gratitude to Lord Buddha Education Foundation (LBEF),
Faculty of management Asia Pacific University (APU) for making this project mandatory
requirement in Bachelor of Business Management (BBM).

I am thankful to Mrs. Sajani Nepal for her academic guidance and also sharing their ideas
with me and the genuine concern to make the overall report at learning moment by all means
and deeds.

Finally, I would like to thank my parents and friends for their continuous support through the
process of this report.
Table of Contents
Introduction ........................................................................................................... 1
Mission ............................................................................................................... 1
Vision ................................................................................................................. 1
Change Management............................................................................................. 2
Cause of Change ................................................................................................ 2
PEST ANALAYSIS .............................................................................................. 3
Leadership ............................................................................................................. 5
Leadership style ................................................................................................. 5
Resistance to Change ......................................................................................... 6
Organization Culture ............................................................................................. 6
CONCLUSION ..................................................................................................... 8
Bibliography.......................................................................................................... 9
Introduction
General Motors (GM) is one of the world's largest automakers, was initially founded by
William Durant in 1902. The main
headquarters is located in Detroit,
Michigan where over 200,000 people are
currently employed globally. It is
predominantly engaged in the designing,
manufacturing and marketing of cars,
trucks, and other automobile parts in North
America, Europe, Latin America, and Asia
Pacific regions. GM also provides vehicle
safety, security and information services
through GM OnStar. This company sells not only cars but also trucks under several brands
such as Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac,
Saab, Saturn and Vauxhall in 31 different countries. It has largest market is in the U.S,
followed by China, Brazil, the UK, Canada, Russia and finally Germany. General Motors is
particularly great importance to the quality and adoption of the new technologies. General
Motors Cooperation ranks the first in the 500 largest countries in the United States and
second world largest industrial enterprises. General Motors is the first implementation of
join-stock and the Expert Group Management.

Mission
To earn customers for life by building brands that inspires passion and loyalty through not
only breakthrough technologies but also by serving and improving the communities in which
we live and work around the world

Vision
To become the world’s most valued automotive company.

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Change Management
Change management is a systematic approach to deal with the transformation of an
organization goals, processes and technology. People doesn’t resist for change. The main
purpose of change management is to implement the strategies for the effecting change,
controlling change and helping people to adopt to change. For example: when in any
organization people are undertakes a project to improve the performance, seize opportunities,
key issues, they often required change, change to processes, job roles for the individual,
organizational structure and technology. This is how it is actually how the employees of the
organization ultimately change and how they perform their job.

Characteristics of change management are:

 Change happens for the pressure of both internal and external forces in the
organization.
 Change in any part of the organization affects the whole organization.
 Change may affect people, structure, technology and other element of the
organization.
 Change may be reactive or proactive.

Cause of Change
Globally, the automobiles and components industry was severely affected by the global
economic downturn in 2008. Unfortunately, the recession in the global economy harmed
GM's business by adversely affecting its revenues, results of operations, cash flows, and
financial condition.

General Motors filed for bankruptcy on June 1, 2009. This move was once viewed as
unimaginable, since it was one of the world's leading automakers. However, after years of
losses and market share declines topped by a major plunge in sales, bankruptcy was
inevitable. A new company financed by the US Treasury stepped in and purchased most of
GM's assets and trademarks. By July 10, 2009, the company's name changed from General
Motors Corporation to General Motors Company.

Consequently, the company experienced major changes such as massive job cuts, closure of a
dozen facilities, emergence of new leaders, etc. In order to evaluate the radical change
undergone by General Motors, both internal and external factors leading up to the change

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must be identified. Several pressures such as economic conditions, competition, government
intervention, technology, resource availability, and people can cause change. In order to be
successful, organizations increasingly need to be scanning the environment to anticipate the
appropriate change action. More importantly, they need to be proactive in their attitude to
change.

In the case of General Motors, the causes of change were economic conditions on a global
scale and unavailability of financial resources. Even though there was a resistance to change,
GM had to swiftly evaluate the situation and devise new strategies on how to move forward.
The success of the transition of an organizational change is mainly dependent upon the
leadership of senior management.

The Chief Executive Officer at GM, Mr. Fritz Henderson, was replaced by Mr. Edward
Whitacre in 2009. He was the former Chairman and CEO at AT&T from 1990-2007. Mr.
Whitacre serves on the Board of the Institute for International Economics and the Boards of
Burlington Northern Santa Fe, Exxon Mobil and the PGA Tour (Datamonitor-GM).
Furthermore, he is also involved in The Business Council. Even though leaders of General
Motors are still trying to implement stability, the transition leading up to the radical change
could have been more efficient and effective. (Anon., 2015)

PEST ANALAYSIS
Political

Laws and government regulations have affected this industry since the 1960s. Almost all of
the regulations come from consumers increasing concerns for the environment and the
concern for safer automobiles.For example, the EU recently restricted the usage of heavy
metals due to environmental issues. Additionally, the vehicle emissions regulations have also
become stricter (Datamonitor: Automobile).

Economical

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The automobile industry has a huge impact on country’s economy. In 2008, the global
automotive industry has been severely affected by the major global credit crisis where both
North America and Europe encountered recession. This in turn caused unstable oil prices,
decreases in employment rate and decrease in consumer spending.

Social culture

Today’s society judges people on the type of car which we are driving. Society does not like
to admit to this but it is true. Manufactures know this happens and targets their markets by
these thoughts. Anyone who drives a high price vehicle is thought to be wealthy. No one
wants to be seen driving an unattractive piece of junk because of what other people will think
of him or her. Consumers also just feel better when they are driving a nice or new car, if
makes them feel better about themselves.

Technology

The internet has affected just about every industry in the world and has also had a huge
impact on the automobile industry. A study was conducted by J.D. Power and Associates in
2002 and involved more 27,000 new vehicle buyers. The study showed that 60% of the
buyers referred to the internet before making their purchases and out of that 60%, 88% went
to the auto websites before going and taking a test drive. Business-to-business marketplaces
have given the industry many opportunities because of the internet, such as more efficiency
and lower cost. (S, 2010)

From the overall PESTLE analysis it can be said that even though the group is not at its best
in recent times globally, it’s one of the greatest advantages is that it has stayed in the business
for almost a century which makes it the world's most globally experienced group and
consequently gives it a cutting edge over the others when expanding globally is considered.
With that the company has installed 'OnStar Satellite Technology' which has helped in
catastrophic conditions like theft. Even if the company has maintained dominating edge over
its rivals, the rivals have found many loop holes that may be used by its competitors to take
GM down. Employment structure is the major weakness where company is still building
revenues but the number of employees is more than the rivals. And another weakness of GM
is investing in the project of hybrid and alternative sources. The company has been doing
research for blowing up a lot of monetary resources without desirable results.

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Leadership
Leaders are those people who help themselves and other to do the right things. They set
direction to build inspiring vision and mission. Whereas leadership is about the mapping
where we need to go to win an organization and is dynamic, exciting and inspiring.

According to the idea of transformational leadership an effective leader is a person who does
the following:

 Create an inspiring vision for the future.


 Manage the delivery of their vision.
 Motivates and inspire people to engage with their vision.
 Builds team, so that will be more effective to achieve the vision of an organization.

Leadership style
There are different types of leadership styles. They are Autocratic, Democratic, Laissez-
Faire, Transformational, Transactional, Bureaucratic etc. In the General Motors Democratic
leadership style is used. General Motors has more than 200,000 employs worldwide.
Moreover, it has created a business environment based upon mutual respect, responsibility,
and understanding. One of General motor goals is to give employees more responsibility and
authority and hold them accountable and help in decision making. Both the employees as
well as top level make decision which is appropriate for the company. In other words, this
company believes in empowering its employees. The change agent should be at the center of
any change process, and one of the most important jobs for him or her to do is to develop a
good relationship between all the parties involved in the change process. This is vital to
ensure that commitment, trust and mutual respect develop. The change agent is also known as
the leader of the organization. During the transition of the old GM to the new GM, Mr. Ed
Whitacre was designated as the CEO. He immediately recognized the importance of
organizational development by changing its structure and the people within it. A successful
change is accompanied by the redistribution of power within the company so that the
decision-making is moved towards shared power. CEO Whitacre alongside other directors
and managers had to work together as a team in order to carry out the changes successfully.
They may even have had to find themselves adopting the role as a transformational leader. As
leaders, they are responsible in having a clear sense of direction in order to keep the
organization moving on track towards the agreed objectives and goals. However, leaders

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cannot accomplish a successful change on their own. They need to also depend on the
subordinates, which can be achieved by encouraging teamwork, empowerment, and
acceptance of certain failures. Additionally, GM understands the effectiveness of
performance when personal life and work are linked. (Anon., 2018)

Resistance to Change
While the new GM managed to leave the neutral zone of the change process, it was
prolonged because of the resistance to change. Some reasons why individuals resist change
are routine, security, economic factors, fear of the unknown and selective information
processing. In the case of General Motors, management and employees were confined to the
traditional way of the company's operations. Even more so, they knew that restructuring and
layoffs were going to take place; therefore, they lost their sense of security and allowed
anxiety to take over.

Organization Culture
Organizational culture is a system of assumptions, values, and beliefs, which governs how
people behave in organizations. These shared values have a strong influence on the people in
the organization and dictate how they dress, act, and perform their jobs. It can be also said
that it’s an assumptions about how a collection of people should think, feel as they go on with
their daily affairs. It is a socially transmitted behaviour, art, languages, sign, beliefs, tradition
etc., which is learned as well as shared within a social group of people having same
nationality, ethnicity, and religion. Cultural barriers occur when different people belonging to
different cultures try to communicate and encounter each other's belief then the results in a
clash.

Organizations with role culture tend to be reliant on formal rules and regulations. In role
culture organizations formal job descriptions of positions are more important than personal
traits and characteristics of individuals taking these positions. In task culture organizations,
on the other hand, the levels of skills and competencies to deal with tasks in hand are
perceived to be the most important factor to exert influence. Task culture organizations tend
to operate in project-based manner with specified deadlines for each project. (Jacky, 2017)

Culture barriers are as follows:

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Values and beliefs

It is important to know the barriers of may be religious in the nature, relating to work ethic,
competition and pride which differ from person to person which is hard to categorize what is
and is not a culture norm within the group. Change agents need to be aware about the
inducing the change so that the goals are going is achieved without any disturbance with the
values and belief of the change clients.

Cultural Ethnocentrism

Culture ethnocentrism can be seen from two sides: the change agents projecting his/her
culture as a superior though the change effort or client view his/her culture superior is
response to the change being implemented. It can be related to race, gender, work
management, regional, and social- economic status. Most of the problem arises due to culture
ethnocentrism which can be avoided by involving the client throughout the changing process.

Saving face

The advantages of change can be seen differently between parties due to how the change
impact on each party member. Good thing is replacing by the bad something or vice versa.
Replacing something good with something would be better to view the change clients as an
attack on themselves and their performed on duty.

Incompatibility of culture trait with change

It is the most common barriers, which is hardest to resolve. This barriers if involves making
a change that directly go against the established culture norms of the institution and even the
client know it is better choice, but it is hard for them to accept it because the incomparability
is often with the fundamental purpose of the innovation. Changes that could fall into this
category could involve removal of a popular program from a school because the budget,
implementation of a dress code to aid in removing distractions from the classroom, or
expanding the school year into summer.

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CONCLUSION
General motors is one the leading fast tract change process with the right leadership approach
in right place, with certain action which could have done differently to maximize efficiency
and minimize resistance. As Mr. Whitacre automatically sent out a companywide email when
the company was in turmoil, it was not necessarily effective. Alternatively, he could have
done a video conferencing with all the employees worldwide which not only help in the body
be language view but also a able to play display emotion. Without communications in place,
wrong information can be multiplied and people develop apathy. Moreover, since the new
General Motors wanted to revive its innovativeness, it is recommended for the company to
expose people to new aspects of their tasks and opportunities for collaboration..

In conclusion, General Motors was able to identify their disparities and firmly decided to
change the organization in order to accomplish its goals and objectives. More importantly, it
acted quickly and realized that current leadership talent did not have the capabilities to deal
with the radical change. As a result, General Motors was assigned a charismatic,
transformational leader to guide it through change, solve complex problems, and build for the
future.

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Bibliography
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https://sites.google.com/site/theresistancetochange/cultural-barriers-to-change [Accessed 2 April
2018].

Anon., 2015. ukessays. [Online] Available at:


https://www.ukessays.com/essays/commerce/leadership-and-change-management-at-general-
motors-commerce-essay.php [Accessed 2 March 2018].

Anon., 2018. industryweek. [Online] Available at: http://www.industryweek.com/companies-amp-


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Anon., 2018. Newscenter. [Online] Available at:


http://aierfu.cc/en/NewscenterDetails.asp?newsid=46 [Accessed 1 February 2018].

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http://www.managementparadise.com/forums/principles-management-p-o-m/208715-pest-
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