GM Is An American Multinational Company Commerce Essay


GM motor wasestablished and incorporated in 1908 founded by William Billy. (Including preferred shares In November 2010 the organization was again relisted on the New York Stock Exchange with initial public offering of US$23 billion.)[1]In earlier stage GM only manufactured horse drawn vehicles and later it transmitted to manufacturing automobiles.

In 1916, the United Motors Corporation made a deal with Durant organization for supplying machinery parts to Durant. In 1918 GM take over United Motors and also acquired Hyatt Roller Bearing Corporation, Delco and other medium companies. Due to fuel supply demand between the years 1970 to 1990 GM introduced fuel efficiency cars and in year 2004, GM delivered the world's first full-sized hybrid technology cars.

(GM rules global markets for 77 years continually from 1931 to 2007, longer than any other automaker. For 2008, 2009, and 2010,In sales GM has ranked as the second largest global automaker. The company captured its position as the world's largest vehicle seller in 2011.)[2]

2. Overview of industry, markets, products, services

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GM is an American multinational company having head office in Detroit. Daniel Ackerson is presiding as Chief Executive Officer& Chairman for the Board of Directors.In year 2010 the company earned $4.7 billion as a profit by production of high-quality, safe, and fuel-efficient cars that has currently 202,000 employs approximately, around the globe.(GM invested in the Cisco-based PFCN solution will make $60.5 million in net benefits over the time period of five years with return of investment of 166%. These benefits includes in the participation of labor savings and inventory carrying cost reductions.)[3]

General Motors is one of the largest car and truck manufacturers and doing business more than a century with international industrial activity around the world namely in North America, Europe, Asia and African regions.

GM manufacturing carburetors and its related components includingcruise control systems and emissions control devices. (Over three decades General Motors was the first industry in the modern era to release an all-electric automobile that launched its first car with zero-emissions in the US market. GM manufactures different types of flexible-fuel vehicles which can operate ethanol or gasoline fuel.)[4]

GM is also in the sector of battery management systems, power electronics and thermal management. IT supplies machinery parts and operating tools for all kinds of mechanical industries in high quality with product value.( In social life GM foundation has given over $1.2 billion as contributions which includes computers to over 18 universities to enhance technical education and providing child automobile safety through education and inspection by "Safe Kids Buckle Up" funding program for young Childs in USA.)[5]

3. Major issues that have impacted organization in past 3 years

Due to rise in fuel energy prices rapidly, most of customers decides to shift in other vehicles like smaller cars, less expensive vehicles which had a major impact on profitability in General Motors.

Due to economical crisis at 2008 GM was suffered by cash flow, by this it not able to borrow money to ride out the financial storm, in another hand it struggled to pay interest for credits and cash payables which destroys the brand name and good will of company indirectly.

(Providing health care and pensions to old and retired employees becomes more in volume in end of year 2008 which also hits the financial position of GM industries.)[6]

GM cannot able to with stand in its market constantly because of the competitors like Toyota which supplies same quality cars as like GM offers; in less price.

GM need to expensive more for marketing and advertisements budget for bring back its customers again which was also impacts the organization.

4. Organization's culture, values, history and development influenced leadership, management, & OB

GMnominates the values of simplicity, agility and believes in performance. Ittrusts in accountability from every employee of the team and demand results from every person in the organization. In mean period, the GM culture is all about creating performance and providing its team members what they need and expectations in order to contribute to the goal of success.

(GM has performing leadership in every segment of the organization, and with fewer models, it can introduce more resources into core brands, resulting in quick productivity with high quality products.)[7] GM understands that all employees have their right to be successful every time when they do their work and part of performing their job is monitoringproblems and making amendments. This system put commitment to employees to construct quality in their job.

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GM is a wide land where employee has the opportunity to improve individually and professionally through collaborating with team members globally. The career of staff can take benefit to work on different brands, in different regions, with different global experts. At GM, the employees are moving up along the growth of the company.

B. Company Leadership, Management, and OB Analysis

1. Leadership:

General Motors formed this company to have stable leaders that understand the Expectation and responsibilities that the company has the name for manufacturing brand named cars and becoming more competitive industry. General Motors are living up to their name because of strong leadership managements.

Akerson, takes charge as CEO for GM since 2010, He has a strong reputation as a real leader, by dedicating high performance activities from his deputies. But in recent periods, GM has been in the signs of stress that have arisen questions regarding his leadership. After Akerson becoming CEO, the GM faced many changes like new chief financial officer, a new product development chief, and fire out the head of GM's who not performed well in European operations . He was also changed the head of GM's on star unit two times and regulates its production leadership. (The implication is that GM is get shaking without well basement. But a GM spokesman said the industry stacking on course. "GM has a deep bench and a strong team. A few, unexpected changes will not slow us down."Akerson understands that GM handles challenges of both leadership and culture. Akerson has dramatically improved the company's financial position, breakeven point, and production and reduces the burdens of 'old GM'. In recent events Akerson clear all the obstacles which need for leadership improvement across the organization.)[8]

In the past tracks of GMs leadership history, when someone screwed up at General Motors, they were normally reassigned to a big title designation with less responsibility. But even when they try to sustain in the position, the organization would give out a nice statement mentioning that the executive was departing to spend more time with his family members or despite to pursue other individual activities. And it always carrieswith greetings for contributions "we wish him well." But in these days, GM executives are being kicked to the end with unexpected force, along, or a sign that GM is in start point to crack under the pressure.The chart of an organization's top leadership plays a vital role and act as a role model for that organization's culture. In order to sustain a culture, it is important to have leaders who are moderate and distant view and who drive the organization to expand its borders and renovates. But these facts are not happened in GM.

The mental age of an organization's leadership like CEOs and other executives is defined by expectations and decisions what they make. GM heads desire more than what the company expects, so every staffs work hard, take challenges and make ways to reach what the company desired. GM employees get satisfied with their job a lot, and more likely to relax on their work and control risks. (The CEO had patented technology from MIT which regressively minimized the amount of time it takes to create a die cast. With help of new technology design a new engine is more compact and exact with shorter periods. Clearly, this is tremendous strength to GM. GM has implemented this new technology by the culture of company what already expected.)[9]

GM sold more cars, but profits and financial position are getting low around the world. GM has several problems, but they are solvable, with strong leadership. Akerson implementing his best leadership values and struggle to achieve positive results.

The performance of the organization's structure depends upon the authority and responsibility of the executives. GM adopted centralized organizational structure in common, by that the systems and controls is not driven without loss of control. The GM is a bigorganization which facesburden of management which increases the leadership capabilities of additional managerial positions.

(Under Akerson's leadership, General motors' has taken several steps to perform the company by offering a $23 billion initial public offers which is the largest share collections in history to improving product quality, investment in production and job creation, and supports for global growth. GM holds a leadership position in all over the markets like Asia, Europe and Africa.)[10]

2. Describe & analyze the organization and management

a. Vision, Values and mission

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General motors' vision is to be the multinational leader in automobile products and related machinery parts. In order to acquire this vision, GM recognized that problems must be highlighted and analyzed. Financial, environmental, social and economic objectives are linked with regular business objectives and future planning activities to sustainable the company more.

(The auto industry is moving towards tremendous changes globally due to environment effects like global warming. GM is now planned to use these threats asopportunities, and take advantage of moderating consumer buying scenario. GM is manufacturing high quality automobiles according to customer's expectation and tends to change it as eco friendly industry.)[11]

G.M. is a multinational corporation which has committed in several social responsible operations, around the globe. It is dedicated to deliver products and services in quality that consumers will get higher value while our staffs and business partners will share in achievements and shareholders may get high value in their return on investment.

b. Goals, objectives, and overall strategy

The goal of GM is to lead in manufacture and delivery of low fuel consumption vehicles with better mileage and the technology to conserve alternative powers, such as electricity and hybrid vehicles.( GM is scheduled to develop the low fuel consumption andzero-emission vehicles,plan to take care about energy and environment by replacing petrol and its byproducts.)[12]

The main objectives of GM are to sell more cars with lot of profits and improve the share holder's value.The overall strategy of General Motors is mainly focused on product development, market development, liquidation, and trend penetration

c. Competitive strategy and advantage

General motors' launched highly modified, fuel efficient automobiles, which took GM brands out performed on product quality. It manufactures automobiles with lowest production costs and sells in the market with high standard. It introduced small cars with high ended options like zero emission automobiles.

(GMs expanded economic wealth; ecological performance, technological attributes, political integration, positive environment's are the factors which governance the market conditions and developments.)[13] By introduction of hybrid automobiles in the market GM holds their customers expectation and try to attract more sales with good brand values. On implementation of cost leadership strategy General motors' has promote their sales in the competitive markets.

d. Structure

Generally GM fallows three types of organization structure and implements it according to the situation.

Line structure-The GMs production manager, marketing managers are come under this category in which their performance directly contributes according to profit of company and here all the decisions are originate from top people. The managers are gathering all the necessary information's to perform in their responsibilities and analyze it for better outcomesby hire or fire the workers.

Matrix structure- GM takes employees from different departments to group each other for a designed project and allows them to contribute in their job with flexibility to fulfill their customer's expectations.

Team structure- GM brings different skilled person together to fulfill their objectives and all decisions are need to be approve by senior managers before it get to be done. Here the completion of project is more prefer than finishing individual task.

e. Style

GM allows the employees who have skills and abilities can participate in sharing information with high level staffs and make present them in decision making period. These employees are boost up to run their departments own.(GM always standardizes total quality management for delivering high quality product and continually implements new technology and ideas to improve quality in all functional areas of business.If some major issues have arisen inside the organization then manager come to act like a counselor to fix the problem and direct them to make goals for achieving their objectives.)[14]

f. Systems

The General motors' always keeps the frame work for automotive safety, energy and fuel economy under Environmental policies, automobile emissions, advanced technology, international market trend, tax, pensions, insurances, investments in research and development according to government rules and regulations with corporate social responsibilities.(The GM frame work always focused and constructs upon current political issues, social responsibilities, and public policy issues to avoid critical situations in fields like business operations, revenues and good will of the company.)[15]

g. Skills

Technical skill- GM has employed lot of professionals and experts to improve their productivity in high quality and also given on job training to improve their skills

Human skills- The human recourses department of GM is organizing the human skills which eliminates the issues and problems arisen in organization and motivate staff in the positive attitude to perform in their job well.

Conceptual skill- In this place the manager monitors the performance of every staff under him and makes observation in different job environments and makes right decision in right time with evaluating the problems.

h. Staff

(Steve Girsky, position as Vice Chairman and who is responsible for corporate strategy, new business development, global purchasing and supply chain, and global product planning. He started his services since July 2009 as General Motors Board of Directors.

Dan Ammann posted as GM Senior Vice President & Chief Financial Officer from April 2011. Ammann directs GM's global finance operations.

Cynthia J. Brinkley became Vice Presidenton July 1, 2011. Brinkley leads global human resources for GM's 210,000 employees worldwide. She takes responsibility for GMs Executive Operations Committee.

Mary Barra as Senior Vice President from February 2011, who is responsible for the program management, planning, designing, technology, and quality control for GM's automobiles around the globe.)[16]

3. Other issues

a. Organizations international strategy & cross culture managements

General Motors has a tremendous international marketing strategy. GM is not concentrate in one brand to push up in the market, instead of that it offers customers to choose their own wish of different models which available everywhere in the world. ("How do you capture a market so diverse with a proposition that's valid across the entire region?" GM manager Mr. Browning said. "You can't do that with one brand. You have to have a portfolio.")[17]

GM suffers on cross culture activities like decision making across cultures, Motivation across culture, Leadership across culture, communication across culture, power and conflict across culture. Not only in the function of entering into an arrangement, have Cultural variances affected every portion of commercial attitudes, GM follows three types of strategies to manage cultural differences which are briefed as follows

Ignore cultural differences- The managers in General motors' is not allow or accept cultural impact on organization, they eliminates diversity of negative impacts by creating positive impacts by giving allowable freedom to their staffs.

Minimize cultural differences- Gm manager takes only as a source of problem to accept the diversity. In this strategy manager try to reduce the problem by reducing diversity.

b. Power used in organization, Sharing, internal politics, conflicts resolve

For many years in GM there was a controversy approach between management and labor communications by both sides. The workforce was harassed by management and the labor backlashes it. The GM management organization was based on German Army rules, and the management staffs were act like a Nazis. Unions being the political parties are subject to the minds of internal politics. Example: Results of company are positive then arising question that what have you done for me LATER? What will you going to do if we elect and select you to a higher union office? So to express their responsibilities they would always try to makebetter and better deals.

After Akerson takes the position of CEO, he made lot of changes inside the company to develop GM; He hired and fired many general managers in many regions who were not function well in their responsibilities. Because of internal politics the GM did not perform well in its marketing strategy and this issue directly hits the financial status of the company. Due to the conflicts raised between CEO and General Managers most of managers are quit from their job and it solved by placing new staffs that are favorable to the head.

c. Main communication processes

Constructing a positive environment for investments in dry market regions.

Open gates for direct communication for the donor relations by launching and developing new website.

Conducts seminar, press and media publication review to find out and implementation of relevant data in the GM communication strategy in upcoming years.

Targets the customers and stock holders by results achieved and lessons learned from the past.

Develop the communication bridge in targeted countries by offering communication packages.

d. Importance of being a learning organization and demonstration

GM uses their own past experience and lessons as example to develop their performance. They are getting data from both their successes and also from their failures what they faced in past. GMs Continuous learning builds the organization's infrastructure systematically. The worth of continuous learning are driven and drawn by the CEO and senior management to get reward in business makes new jobs without loss in financial compensation.Because of learning organization GM are able to make competitive advantage with brand name which not equalize by other competitors.

e. Policy in handling ethical issue, example on resolving this issue

General motors' issue was that it sacrifice the core value of safety for making profit. On frame this problem generally what GM was facing is that how to effectively balancing the two on trading one value for the other. No company can sustain in market long and makes profits if it supplies unsafe cars. Same wise, there is always negative risk in any product which are manufactured. Even the public predicts some defections in quality of product. GM, as well as any other car manufacturer is also not able to make their product 100% safe.

When take a look on this ethics issue how GM grappled with that decision.

(Who had report but didn't inform it up to senior leadership? Why not? Which stakeholders, internal and external, were not included in the decision-making process?In business, the bottom line is considered to be money. GMleaders mostly follow the share holders approach rather than the stakeholders approach like staffs, consumers, suppliers, and the environmentsBusiness decisions often concern complicated situations which are neither ethical nor unethical.)[18]

Opel a brand from GM launched its new product in European market which got failed due to defect in the auto locking system. So Opel decided to get back all its sold cars and tried to solve this issue in free of cost for keep its brand name in stable.

C. Major strength and weakness of company's leadership, management & OB


The GMs leaders are spending too much time in overall control of their departments and gathering details to eliminate the obstacles for perform their project well and pay more attention in their responsibilities, do work with involvement below than their pay grade

Because of self-motivated leaders they drive themselves and guide others to perform well in their work and try to get more outturn returns by providing proper knowledge and information about their job and remaining tasks yet to be done.

Giving responsibilities to the employee who work under him and try to train him up and prepare staff to handle the job nicely under critical situations in different unexpected environments.

GM management applies strength consciously and allows the own strength of their staffs to implement in their work without losing any other talents in a right time and make new applications to use their strength periodically in new level.

The HR development in GM take care all employees and it makes procedure same for all including CEO and other managers in the industry. It finds out the track record and performance of each employee in different conditions.


Due to globalization and performing offices at several regions all over the world GM was easily effected by cross cultural changes, By this the company cannot able to operate well and also the performance of leader ship also poor which impacts on the company's growth.

The past financial position of GM was not so good, so GM was in the position of trouble to implement new strategies. So the company takes time to get back and up to that period GM may not put expenses in research and other elements which may indirectly hits the company's growth.

Because of increase in the volume of pension payees in GM the expenses are more and also new staffs are employed to fill up the gape and they are in the way to understand of the culture and behavior of organization which impacts the productivity.

D. Significant recommendations for improvement

Reducing the manufacturing cost by establish strategies like operation, quality, technology in the organization and try to improve operating profit more.

Increasing public awareness of green environment and keeping resources for future generation Gm can able to occupy more costumers in its market.

By making centralization of key process GM can able to get more revenues by selling out cars, this will happen because if process comes centralization then service of automobiles can done everywhere, so automatically the resale value of car will get raise.

Adopt the organization change in the company to become more flexible and know the trends of the market by taking right product to right place in right time and try to capture customer loyalty satisfaction through marketing each brand with more efficient, also increase the product difference on brands to minimize inter brand competition.

Make small cars with all options and functions with grabbing design model and color by which people can easily identify the brand name and this may helps the market sales improvement without advertisement expenses.

Need to analyze the synergies of each brand and make a market research to identify the opportunity of remaining brand in same market with introducing new brand name with new modes.

Invest a heavy budget in research and development sector to make admirable design cars with other specialty functions contains new concept within each brand. Introduce waste management system in all plants, separating and recycling so as to achieve zero waste in all production units; enhance the dealer to grow up company image. Reuse all production wastewater through recycling. Adopt dry or near-dry instrument to all processes where chance to reduce waste. Track machine power consumption and optimize machine usage periods and monitor amount of scrap metal machined away by design on fabrication process.

(Set values and goals by following industry wide performances. One of biggest conflict for tracking the system is the fixing of goals in both the short and long term conditions. Additional research should be done by GM, to reach goals in dynamic conditions.)[19] Make scale to monitor progress and quality improvement by tracking the scheduled progress, an ideal improvement for sustainability should be adopted throughout the production organization.

Implement progress all over the company's operations, subsidiaries, across geographic regions, divisions and subdivisions. By elaborating information on objectives, progress, goals and best training to improve manufacturing facilities, GM can sustain definitely with a name best in class.

E. Citations

1. ^ "GM, Chrysler Beef Up Lobbying, Despite Government Ownership". Huffington Post. January 11, 2011. Retrieved August 25, 2012.

2. ^ GALLIGAN, KATHLEEN. "GM again the world's largest automaker".Detroit Free Press.. Retrieved August 25, 2012.

3. ^ Corporate Giving -- Details:GeneralMotors.Business Week 2005. . Retrieved August 25, 2012

4. ^"G.M.'s Road From Prosperity to Crisis". The New York Times. May 31, 2009. . Retrieved August 25, 2012

5. ^ "GM's Annual Report 1955". Retrieved August 29, 2012

6. ^ GM Cash Burn 1B per month - Auto News Report - May 29, 2008. Retrieved August 29, 2012

7. ^ "GM - GEO Minerals Ltd. - Google Finance". 2008-08-31.Retrieved August 29, 2012

8. ^ "Historical prices for GMGMQ (General Motors Corporation) - Google Finance". Retrieved August 29, 2012

9. ^ GM Agrees to Sell Allison Transmission Unit, The Wall Street Journal, June 29, 2007. Retrieved August 29, 2012

10. ^ "GM Said to Pick Whitacre After Finding No Top Industrial CEOs". Bloomberg. January 26, 2010.. Retrieved August 29, 2012.

11. ^ Ruddy, Christopher (January 31, 2006)Alan Greenspan's Real Legacy. Newsmax .Retrieved September 04, 2012.

12. ^ Sloan, Allan (April 10, 2007).GM's High-Performance Pension Machine Washington Post, D02.Retrieved September 04, 2012.

13. ^ GM Creates Venture Capital Subsidiary News article from InfoGrok. Retrieved September 04, 2012.

14. ^Juran, Joseph M. Juran on Leadership for Quality. New York: Free Press, 1989.Retrieved September 04, 2012.

15. ^ USA Today (2009-04-24). "GM gets another $2B in taxpayer loans, expected to scrap Pontiac". Retrieved September 04, 2012.

16. ^ "GM - GEO Minerals Ltd. - Google Finance". 2008-08-31.Retrieved 2009-06-06.Retrieved September 04, 2012.

17. ^ "GM Said to Pick Whitacre After Finding No Top Industrial CEOs". Bloomberg. January 26, 2010.Retrieved September 04, 2012.

18. ^ Black, Edwin. "Hitler's Carmaker: The Inside Story of How General Motors Helped Mobilize the Third Reich". Retrieved September 04, 2012.

19. ^ "GM Said to Pick Whitacre After Finding No Top Industrial CEOs". Bloomberg. September 26, 2010.