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Case Study On General Motors

1113 words - 5 pages

Organization and Management – Assignment 1

General Motors (GM) was one of the market leaders in automobile
production prior to the 1980s and 1990s. Under the supervision of Alfred
P. Sloan Jr., GM developed 5 independent divisions that marketed their
own line of cars. These divisions – Chevrolet, Pontiac, Oldsmobile, Buick
and Cadillac – catered to different economic price ranges.
organizational design led to GM being the world’s largest manufacturing
organization during the post-World War II era.
However, during the 1980s, GM experienced its first loss since 1921. The
newly appointed CEO Roger Smith began redesigning GM’s organizational
structure to push ...view middle of the document...

He identifies that the divisional structure which had worked so
well for GM in the post-World War II era had become a problematic one.
The bureaucracy had grown so large that it completely taken over the
decision making, growing into endless discussions about decision making.

GM’s reorganizational efforts in the 1980s and 1990s still proved to be
futile efforts as the company still continued its loss of profitability. As
such, the author ponders upon the appropriate response to the company’s
problems. He considers the possibility of centralization of some functions
and decentralization of others.

GM’s had begun prior to the company’s first loss in 1981, with the
growing competition and technological developments.
However, the
reorganizational efforts of GM started in the 1980s and 1990s.


Statement of the Problem
The main problems of GM are the increase and growth of competitors
from Asia and Europe and the increasing technological developments in
manufacturing and information processing.
These challenged GM’s
market supremacy and production advantages, which had placed the
company at the top of the worlds manufacturing organizations. Additional
contributions to GM’s woes are the management structure problems,
wherein the massive corporate staff levels ground to a halt the decision
making due to endless discussions.


Statement of the Objectives
GM’s primary objective is to regain their competitive, growing and
profitable status as an automobile maker.


Areas of Consideration
• History as top automobile manufacturer makes brand well known
• Production advantages
• Bureaucracy slowing down decision making
• Top heavy organization has too many “experts” with their own
• Expansion into other territories
• Competitors from other regions


Technological developments which diminish GM’s manufacturing
and production advantages

Alternative Courses of Actions
One alternative for GM is to focus on research and development and
improve its manufacturing and production capabilities. This is will enable
the company to regain its advantages over its competitors. It is within
the capability of the company as it has already done it previously when it
was the largest manufacturing organization in the world. However, it may
also be a risk as other competitors may also develop the same technology
as GM would, and thus negate the company’s advantages again.
Another alternative is to consider expanding its market outside of the
North America. This will increase the market base of the company, and
possibly increase the number of potential consumers. One of...

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