Due to the high rate of innovation and emergence of fast and new technologies in the market, organizations are experiencing various changes. These changes are significant in enhancing more production, efficient and effective management. This paper examines the organizational culture of General Motors before and after the shift. It will also focus how the transformation has been successful to the company regarding employees’ productivity and profitability.
For many years, General Motors has been the leading company in the automotive industry with the highest number of employees in the United States. The company manufactures vehicles in over 40 countries worldwide, across 13 different brands, including Chevrolet and Cadillac. However, various economic setbacks in 2005 almost made the company collapse. The company, therefore, had to go through multiple organizational changes to enable the company goes back to its functioning. The big company has to shift from its old mindset to new mindset to remain competitive.
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In 2014, General Motors Company was in the limelight for manufacturing vehicles that had faulty ignition switches. According to many employees, the issue had been there for more than ten years, but the executives had covered up for the question. For the ten years, the problem remained unsolved, reflecting the underlying problem within the company’s core values: its culture. The quiet -cost driven culture almost made the company go bankrupt to the extent of being bailed out by the federal government. According to Bayou & De Korvin (2008), the faulty vehicle parts that were produced almost for a decade caused fatal accidents resulting in many consumers preferring other brands from different companies. Many customers criticized the company slow to act strategy and reluctance to solve the problems. They believed that such a multinational company should not behave that way when solving problems. Bayou & De Korvin (2008) asserted that General Motors ignition switch problem because the product was not designed according to the GM specifications. Considering the cost and the time that the organization would incur, the Company decided not to fix it. In turn, they advised their customers not to use keys that would interfere with the ignition switch.
In January 2014, a new CEO was officially appointed to restructure the company that was almost crumbling down. The CEO first fired and terminated some of the contracts of the employees associated with the ignition switch scandal. More experts and investigators were hired to look into the problem and how to solve it. Investigations revealed that the employees could have rectified the problem as soon as it emerged. However, the organization had a culture of not treating issues with the urgency they required. The CEO, therefore, restructured the overall perception of the organization. The customer became the central focus of the organization to ensure that they get quality products. The CEO pledged to take responsibility for what had happened to the victims of the faulty ignition switch. They were to be compensated for the losses and most importantly, the company henceforth would act with integrity, honor, and commitment to excellence.
The employees were also included in a program that was started known as “Speak Up For Safety." The new plan would encourage employees to share various strategies that would help in improving customers’ safety as well as how to fix problems as soon as they arise. Besides, this would help the company in embracing a culture where the safety of the customers' matter and the quality of services is high. Besides, since the social media is where the perception of most customers are shaped, GM took every chance to connect with their customers hence regaining their trust and confidence. The Social command Centre in Michigan headquarters also played an essential role in ensuring that all the responses of the customers are put into consideration, and feedback gave promptly.
According to Hibbert (2015), organizational culture change is very essential as it helps in every organization. While most of the employees understand the importance of embracing the new culture, some do not know how the change will help the company. The new culture change of GM is bound to face various setbacks. First, the old culture has already been ingrained in most of the employees, therefore taking a lot of time for them to shift to the new religion. Most of the customer’s already are suspicious that the company will still produce faulty ignition switches. However, the CEO must ensure that everyone in the organization is working towards the success of the company.
The new organization culture played an essential role in the success of the company. According to the latest financial reports, General Motors net revenue has surpassed those of their competitors such as the Ford Company. This was an improvement from the last financial statements when the Company had lagged behind. By recalling over 2.6 million vehicles, the company owned to the accusations. This has helped gain the trust of the customers as well creating a successful culture change in the organization that was not possible in the past.
In conclusion, after facing severe challenges to the extent of going bankrupt, the general motors decided to gain the company activities by going through a drastic organizational culture change. While the changes experienced significant challenges, the company was able to stand on what it believed was the right direction. The company is now the world largest manufacturing company.
References
Bayou, M. E., & De Korvin, A. (2008). Measuring the leanness of manufacturing systems—a case study of Ford Motor Company and General Motors. Journal of Engineering and Technology Management , 25 (4), 287-304.
Hibbert, L. (2015). Innovation and skilled management made these two British engineering companies world leaders. Professional Engineering, 28 (8), 3. Retrieved from
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