Leadership Theory
Recently, the GM Culture Crisis was brought to the fore following the deaths of about 13 people due to GM’s ignition switch problem that was captured in the Volukas Report. The unfortunate incident was the reason GM decided to change its organization culture. Despite registering exemplary performance in its operations, the report exposed serious dysfunctions in the culture of the company. The report indicated that the company had serious issues to do with decision making and communication between the upper and lower levels in the company’s organization structure (Lewis, 2014).
The culture crisis brought by the ignition switch incident exposed GM’s leadership style which was, more or less, a directive leadership style. This leadership style is bureaucratic in nature and takes on a hierarchical structure where power and authority flows from the top to the bottom. The top managers give tasks and instructions to those at the bottom who are expected to follow. The leadership style does not encourage a culture of collaboration and cooperation but instead results into class distinctions based on individual’s position in the company’s hierarchy. It is a type of leadership structure that uses rewards and punishments to control employees. It is what created the cost-culture that led to the GM culture crisis where there was a communication breakdown between top managers and low level employees. The ignition switch problem was not fixed in time because of lack of communication between low level employees and management. The problem was not raised to the highest levels of management because there was a lack of openness, accountability and collaboration among employees and management. The culture crisis is what informed a change of leadership style at GM (Fagaly, 2018).
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The shift in leadership style at GM was necessitated by the need for management to improve and open communication lines between employees and top management in an effort to raise awareness with regards to safety and the strengthening of the tone of management. This was done through the Speak Up for Safety program that made use of tools such as bulletins and posters on employee’s bulletin boards. The management also decided to enforce a non-retaliation policy to reduce incidences of punishments to foster open communication. It was also decided that safety should be high on the priority list and not just the focus on cost.
The leadership style that was exhibited by the organization encouraged a decision making process that was not participatory in nature. The employees of the company did not have a say in the decision making process which was solely done by top managers. Most employees were reluctant to give opinions because they felt undervalued and disengaged. The organization also allowed most high level managers to shy away from their responsibilities (Kuppler, 2014).
Organizational Culture
The internal culture within the organization was one that was driven by cost and a lack of responsibility by both the employees and top managers. The organization exhibited a culture of pointing fingers which was also known as the “GM Salute.” The phenomenon led to a breakdown of communications within the organization. There was a tendency of employees not following through on proposed plans of action, a situation that adversely affected the company. The behavior was known as the “GM nod” which only helped to worsen the company’s efficiency. It was difficult to establish the identity of any real decision maker in the company and this led to lack of coordination and collaboration among workers. The top management usually sent conflicting messages where one put cost as a priority while the other emphasized on safety. The conflicting messages only helped to aggravate matters which could have otherwise been resolved effectively. Finally, there was no sense of urgency within the company’s structure which made the decision making process to be slow and ineffective (Kuppler, 2018).
Insights and Conclusions
The directive leadership style and cost culture at GM complement each other and also does not complement each other in that it is a highly authoritative leadership style that also lacks compliance among employees. The leadership style is one that is supposed to set tasks and instructions from the top management to low level employees. However, the company exhibits forms of non-compliance to organizational directives where individual workers across the entire company structure do not follow though the organizations action plan because of lack of a clear power structure. The internal culture of the company, therefore, does not complement its leadership styles which are supposed to be authoritative through a system of rewards and punishments. The lack of effective communication within the company is a product of a directive leadership style which partly disengages employees from being part and parcel of the company. They are not involved in the decision making process in the organization and this results into a breakdown in communication.
The changes in the organization’s leadership style and internal culture influenced each other because the shift was necessitated by the inadequacies of the former leadership style that created the internal culture within the organization. The company was compelled to improve its communication system as a result of having a culture that did not enhance an effective communication. The company also decided to have a more customer centered culture and not a cost culture to improve its service delivery and also help achieve customer satisfaction.
The organization’s leadership style and internal culture at GM influenced the behavior of employees in that it helped to shape their commitments to the organization. The company did not demonstrate any desirable work outcomes by having a flawed power structure that did not show responsibility and employee participation. By adopting this internal culture, the employee’s behavior tended to be that of reluctance and a lack of seriousness to perform their tasks. The company went to the extent of firing about 15 employees who are said to have acted inappropriately or did not do enough (Kuppler, 2018). The behavior borders on misconduct and incompetence which are representation of the existing culture in the organization. The behavior can also be attributed to the leadership style in the organization because a lax leadership will ultimately result in a lack of commitment by employees (Acar, 2012).
References
Acar, Z. (2012). Organizational culture, leadership styles and organizational commitment in Turkish logistics industry. Procedia - Social and Behavioral Sciences 58, 217 – 226.
Fagaly, M. (2018). The 5 Types of Leadership Styles That Can Define Your Organization’s Culture. Berret-Koehler Publishers . Retrieved from: https://ideas.bkconnection.com/the-5-types-of-leadership-styles-that-can-define-your-organizations-culture
Kuppler, T. (2018). The GM Culture Crisis: what leaders must learn from this culture casestudy. Retrieved from: https://web.archive.org/web/20161013135112/http:/switchandshift.com/the-gm-culture-crisis
Kuppler, T. (2014). GM Culture Crisis Case Study - A Tragedy and Missed Opportunity. Human Synergetics . Retrieved from: https://www.humansynergistics.com/blog/culture-university/details/culture-university/2014/06/24/gm-culture-crisis-case-study---a-tragedy-and-missed-opportunity
Lewis, M. (2014). Timeline: GM's ignition-switch recall crisis. Reuters . Retrieved from: h ttps://www.reuters.com/article/us-gm-recall-timeline/timeline-gms-ignition-switch-r ecall-crisis-idUSKBN0F62WY20140701
