GENERAL MOTORS

CORPORATION

TOO BIG TO CHANGE?
Introduction

GENERAL MOTORS CORPORATION
General Motors Company (GM) designs, forms and trades cars, trucks
and automobile parts worldwide. The Company also delivers
automotive financing facilities through General Motors Financial
Company, Inc. (GM Financial). It operates in four automotive
segments: GM North America (GMNA), GM Europe (GME), GM
International Operations (GMIO) and GM South America (GMSA). GM's
total worldwide vehicle sales were nine million during the year ended
December 31, 2011. The Company's GMNA segment develops,
manufactures and/or markets vehicles under the brands, such as
Buick, Cadillac, Chevrolet and GMC for its customers in North America.
GM for its customers outside North America develops, manufactures
and/or markets vehicles under the brands, such as Buick Chevrolet,
GMC, Opel, Cadillac, Daewoo, Holden and Vauxhall.

1. GM Strategy & Current Performance
Timeline & Headlines

March 29, 2009 CEO Rick Wagoner resigned because of pressure from
Obamas Administration (trying to make a clear signal that GM was making a
big change)
March 29, 2009 Wagoner was replaced by Vice
Chairman COO Fritz Henderson
December 01, 2009 Henderson was fired by the board,
was replaced by Ed Whitacre.
Early August 2010 Ed Whitacre stepped down and was
replaced by Daniel Akerson.
Fritz Henderson Edward E. Whitacre Jr.
Daniel Akerson
1. GM Strategy & Current Performance
Timeline & Headlines
March 30, 2009 Government Released plans to provide working capital
over the next 60 days so GM can restructure
(If not successful, they will file Chapter 11-bankruptcy)


1. GM Strategy & Current Performance
Current Strategy
GM will restructure during the 60 days allowed by the government:
1. Profitability Sustainability
2. a Healthy Balance Sheet
3. a More Aggressive Operating Structure
4. Technology Leadership

This will make GM Stable & Competitive in Mkt
1. GM Strategy & Current Performance
Current Performance : Human Resources
2008 - Cut 15,000 Jobs
2009 Will cut 5,000 White Collar Employees in the 1
st
round of layoffs
to reconstruct
They hope they will be more profitable @ lower sales levels with less employees!



1. GM Strategy & Current Performance
Conclusion
GMs Current State:
Huge Operating Losses
Shrinking Market Share
Small Current Ratio
Huge Layoff Rates
Falling Stock Prices
Not only will the accountants be issuing a going-concern for GM but they
will be faced with bankruptcy and possible closing down all together.
Their current performance is very poor and is in direct need of
reconstruction which is exactly the stage they are at currently.
COMPETITORS:

The major competitors of General Motors are domestic
companies like Damiler Chrysler & Ford Motor and foreign
companies like Toyota Motor & Honda Motor.

Damiler Chrysler
As the number two auto manufacturer in total revenues
DaimlerChrysler has positioned itself as an industry leader, with
this come many strengths. The DaimlerChrysler umbrella covers
many well-known brands such as Dodge, Chrysler, Mercedes
Benz, and Jeep. This means DaimlerChrysler has strong brands
that are recognizable in almost every part of the world.


Ford Motor Company
Ford Motor Company is a global company with two core
businesses: Automotive and Financial Services. The Automotive
business consists of the design, development, and manufacture, sale
and service of cars, trucks and service parts. Ford has been focusing
on cutting costs to increase margins more than its competitors. It has
used reverse engineering in the development of their products. Thus
Ford has been an innovator in the auto industry.

Honda Motor Company
Honda motor company is not your average Japanese car
manufacturer. Originally known for motorcycles, Honda has
managed to elude the dominate keiretsu system in Japan and
become one of the dominant automobile manufactures in the world.
There is much strength to Honda. Honda has a reputation for
producing high quality products from cars to motorcycles. Honda has
won many awards for initial quality and customer satisfaction. Their
automobiles are reliable and generally fuel efficient. Their research
has afforded them competitiveness in innovative products.

Toyota Motor Corporation
The Toyota Motor Corporation was incorporated in 1937 and has
many strengths being one of the industry leaders in the automotive
industry. Toyota has three major brands underneath the company
umbrella; Toyota, Lexus, and Scion. By having these three distinct
brands, it lets the company reach many sectors of the globe in a
choice of vehicle for customers. Toyota has traditionally also been
the leader in Total Quality Management or TQM. By using the Kaizen
theory of continuous improvement, Japan caught up the U.S. auto
makers during the 1980s.


GM SWOT Analysis
STRENGHTS
Asia Pacific and Latin American
Countries
Large Scale Operations
Variety of Brand Names
OnStar Satellite Technology

WEAKNESSES
Recalls
Declining Market Share
Decline in Financial Performance
Overly Dependent on US market
Poor Organizational Structure

OPPORTUNITY
New Emerging Markets
Increase in demand for Hybrids
Develop New Vehicle Styles and
Models
Poor Organizational Structure
THREATS
Declining demand for light
Vehicles
Rising Fuel Prices
Increasing price of raw materials
Growth of Competitors
Discussion Question:
1. How would you describe the organizational culture at GM? Why
was decision making so slowplodding as one analyst described
it?
While the case does not give much insight into GMs culture, what
is evident is that they have been slow to change. Having not shown a
profit for six years (or much profit in the last 15), GM has either been
slow to recognize changing customer preferences and/or slow
adapting to technological changes in the competitive automobile
industry. Decision making can be equated to analysis of paralysis,
or the over-thinking of a situation, so that a decision is never made,
in effect paralyzing the outcome.
Discussion Question:
2. Why do you think the previous CEOs (Mr. Henderson) attempts
to change the organizational culture might have been lacking?
Hendersons failure could be attributed to his obsession with
numbers. Too much focus on numbers may have clouded his
judgment in that it was the culture of GM which needed to be
changed. Another reason could be that Henderson was a GM insider
who had been with the company since 1984. Having risen from the
ranks to eventually become Vice President, Henderson could have
adopted the same analysis of paralysis of other GM
managers. Having been responsible for approving many of the
programs in his position as VP, Mr. Henderson may have also felt
some attachment to them and let them continue.
Discussion Question:
3. What changes is Mr. Whitacre making to the culture of GM?

Whitacre seemed focus on changing the decision making process
of GM. By empowering employees to make their own decisions,
change could occur more efficiently with the use of too many
committees.
Discussion Question:
4. What types of resistance is he likely to encounter? Using Exhibit
6-5, what would be the best ways to address that resistance? Be
specific.
Because of GMs failing economic position, it would be expected
that there would be structural and human resource changes in
addition to the cultural change Mr. Whitacre was seeking. These
types of change often result in employee layoffs. Considering the
strong emotions that can arise during times of layoffs and the fact
the GM had previously tried to change and had been ineffective,
facilitation and coercion may be the most effective means of
combating resistance. Any efforts that take too long, or require trust
may not work in GMs situation.


Conclusion and Recommendation:
SUGGESTED STRATEGIES
Below is a list of possible strategies General Motors could use to
redirect profits and be able to maintain survival for the future.
1. Market Development
2. Market Penetration
3. Product Development
4. Restructuring
5. Retrenchment
6. Liquidation Implementations

Conclusion and Recommendation:
Suggested policies for General Motors would initiate with improvement in
their product then market growth, liquidation, and restructuring. Reasons for
product improvement being at the top of priorities is that GM has to create a
type of Hybrid vehicle that will allow it to keep up with the pace of the
competitive environment, but must be a product that stands out from the
crowd at the same time. Prime example of their idea for a Hybrid SUV, it fits
the GM profile with maintaining the SUV portion, but allows the firm to stay
with trend patterns.GM must also re-evaluate the market they are trying to
approach, because for so long they have continued with a tradition outlook
for automobiles, but now that times are changing their original target market
is not looking for what they once were.
General Motors needs to take a step back and take look at how they want
to position themselves and towards what market since what they have been
doing is no longer in favor for the company. An example of what GM could
possibly do is producing a futuristic vehicle, which has been heard in rumors
from Toyota about their next plan of action. If General Motors could provide a
"futuristic" vehicle before Toyota has the chance to hit the market with theirs
GM would be a step ahead of the competition.
Conclusion and Recommendation:
Liquidation would clearly help out the financial parts of the
organization. Last but not least is restructuring, which General
Motors most desperately needs to review possibilities. The
company has taken a large hit in recent years and needs to find a
way back to the top. This is only going to be achieved if something
drastic is changed.
Restructuring the product development pace would be a start as
well as cutting back on employees because the company is growing
in size but not in profit, which causes a red flag for GM. The
company needs to be re-evaluated in many ways, but GM has been
strong for many years that it is very possible for the company to
come above these issues.

Conclusion and Recommendation:
The major thing for General Motors is to improve a Hybrid vehicle
that will keep the position in the competition for the company as
well as to be distinguished. Generating a Hybrid SUV is a brilliant
idea and if GM can pull that off by the end of 2012 the future could
look very bright for them. The company has a huge background
proving that they can maintain being number one, it's just a matter
of product development being maintained and refocusing products
to the correct target markets.