The paper analyzes leadership and organizational culture of General Motors (GM) as contained in the case study titled “The GM Culture Crisis: What Leaders must Learn from this Culture Case Study” by Tim Kuppler. The case is based on GM ignition-switch recall that started in February 2014. Kuppler mainly focused on the GM’s organization culture and poor leadership, which led to the scandal. Therefore, the paper focuses on the GM organizational culture and leadership as contained in the case study.
Leadership Theory
The leadership style used in the case is delegative or laissez-fair leadership style. It is a hand off type of leadership approaches in which a leader places more responsibility on junior management or employees in an organization. A laissez-fair leader delegates a number of its works to other staff. In many cases, employees always take advantage of this leadership style to avoid doing crucial tasks because top management is not fully engaged in the operations of an organization. Laissez-fair leadership style is used by leaders to shift blame or avoid responsibility. Laissez-fair describes the leadership style at GM because its leaders were shifting blame and avoiding taking responsibility for their actions and decisions (Kuppler, 2014). No GM leader was ready to take responsibility for the ignition-switch scandal. The scandal was due to failure of GM leaders to despite knowing that the ignition switch was faulty.
Delegate your assignment to our experts and they will do the rest.
The shift in leadership was due change in leadership, especially after the new CEO, Marry Barra, was appointed. She knew GM had a dysfunctional culture of not acting and taking responsibility. She owned the responsibility and promised accountability from employees who played key role in the ignition-switch scandal. Therefore, the leadership style switch was due to the need to change GM culture.
Before the leadership shift, GM had a poor decision-making approach, which led to the scandal. The decision made in the company was never based on sense of urgency despite the fact that ignition-switch was serious and needed urgent action. At the same time, no one owned the decisions that were made in the company, leading to lack of follow ups and untimely implementation. In addition, the decision was not inclusive, as top management made decisions on behalf of junior managers who agreed on everything that was suggested by the executive. In addition, the decisions that were made by the management were based on the need to reduce the cost of operation rather than safety of customers. Therefore, poor decision-making process led to a shift in leadership style ( Yanagizawa-Drott, 2014) .
There were three main internal factors that might have caused shift in leadership at GM. The first internal factor was poor culture that did not encourage taking responsibility, accountability, and transparency. The second is poor leadership style, as leaders were not taking their roles seriously and executive imposed things on employees and junior management. Leadership in GM was bureaucratic. In addition, the working environment did not encourage employees to freely air their concerns and views. The main external factor was the need to reduce the cost of operations due to economic uncertainties. Due to increased cost of production, the company wanted to reduce the cost of production for survival.
The leadership style that was characterized by shifting blame and lack of taking responsibility led to poor decision-making process. The decision by GM leaders was never based on sense of urgency (Kuppler, 2014). There was no leader who was ready to own up the decision, which hindered the execution of the decisions that were made. Leaders were also fond of shifting blame, which led to untimely decision making in the organization.
Organization Culture
The internal culture of GM was mainly characterized by the culture of avoiding responsibility. Although many people in the organization knew that ignition-switch had a problem, no one bothered to take responsibility. The internal culture was also associated with ineffective communication system, particularly between senior and junior employees. In addition, GM culture did not embrace urgency in actions and decisions. Therefore, internal culture was associated with avoiding responsibility, poor communication system, and reluctance in taking actions and making decisions ( Yanagizawa-Drott, 2014) .
The culture of avoiding responsibility became apparent in the case study when senior executives such as Vehicle Line Executive and Chief Engineer admitted that they knew the ignition-switch problem existed and they never took any action (Kuppler, 2014). They were avoiding responsibility. Lack of effective can be seen in the case when the CEO admitted that she did not know about the problem even though some of the executives were aware of it, which illustrates poor communication system within the organization. In addition, some of the witnesses said that GM people are reluctant to raise the issue or problem, may be due to lack of openness and fear of being punished ( Yanagizawa-Drott, 2014) .
Insights and Conclusion
The leadership style and internal culture of GM that is demonstrated in the case study complement. Delegative leadership style that was embraced in the organization led to the culture of avoiding responsibility and reluctance in taking actions and making decision. The intended change in leadership by the new CEO will play important role in ensuring that all GM employees take responsibility and be accountable for their actions. Increased accountability and transparency in the organization will ensure that the management and staff make quick and appropriate decisions. The leadership style of avoiding responsibility and shifting blame made employees to be reluctant in raising concerns or solving problems that was taking place in the organization. At the same time, the need to reduce cost might have prevented GM engineers to design effective and safer ignition-switch. Therefore, leadership style and internal culture influenced behaviors of employees in the organization.
Reference
Kuppler, T. (2014). The GM Culture Crisis: what leaders must learn from this culture case study .Retrieved from http://switchandshift.com/the-gm-culture-crisis
