General Motors: Case Study
The General Motors Company is an automobile manufacturing company that has been in operation for a period of over a century. It is found in the United States and ranks the second largest auto manufacturing company across the globe. It has established its operations in close to thirty four countries and mainly manufactures trucks and cars. Its products are sold in close to one hundred and thirty four countries. The organization has faced numerous challenges in the past with the most profound being bankruptcy.
Nonetheless, it has re established itself and its shares are currently available on the stock market. It is against this background that this paper intrinsically evaluates the organizational structure and external environment of General Motors Company. Then, it moves further to provide an in-depth evaluation of how the M-form hypothesis defines the organizational structure of General Motors. This is imperative in enabling the reader to understand and appreciate the current leadership of the company.
The Organizational Structure of General Motors
At the very top, the organization is headed by the chief executive officer whose sole role is to provide vital financial results that meet the expectations of the shareholders. Share holders according to Blackburn (2006) entail the community within which the organization is situated, the customers and the employees. In this respect, it should be acknowledged that each region or country has its own chief executive officer. He achieves these objectives through collaborations with various directors. Directly under him, we have the chief financial officer, chief information officer, office of product development, legal issues, planning and alliances, marketing and communication, global manufacturing, purchasing and supply chain an human resources.
The chief financial officer is responsible for providing the organization with effective financial resources that are critical for its development and growth. He oversees the control and accounting office as well as the treasury. The chief information office on the other hand is charged with the responsibility of availing to the company secure information systems that are effective and well performing. Further, the product development officer oversees the functioning of the vehicle engineering sector and directs vital research and development. Then, the international operations office basically monitors operations at the international sphere. According to Pelfrey (2006, p. 46), these are established in Canada, Mercosur and Asia Pacific.
The legal office seeks to contractually provide protection of the strategic assets of the companies. Then, the chief marketing officer plays a fundamental role of understanding, satisfying and predicting the dynamic needs and expectations of the current as well as prospective customers. Specific activities include pricing, developing viable product brands and positioning the same on the market for public review (Rothstein, 2005). Under this office, we have the communication, Buick-GMC, Cadillac and marketing and strategy support offices that provide vital services geared towards achieving organizational goals. The global manufacturing sector oversees the operations of the manufacturing international segment. Finally, the human resource is responsible for hiring, motivating and managing the workforce of the organization.
Just like other organizations, General Motors does not exist in a vacuum but rather in an environment that is anchored upon the interplay of numerous intricate and augmenting factors. Thus it is impacted on and impacts on its external environment in various ways. To begin with, Dicken (2007) indicates that since historical times, the political laws and numerous regulations developed by different governments have had various implications on its holistic well being. These can partly be attributed to the inherent dynamism that the organization has undergone over time. According to studies, a significant percentage of the regulations are generated by the consumers of the products. For instance the growing concern for the environment has made the company to adopt viable measures in manufacturing of safer automobiles.
In addition, Snow, Miles and Coleman (1992, p. 26) point out that the organization has impacted on the economic environments of specific countries in various ways. In this regard, recent research reaffirms that fundamentally, the automobile industry tends to have a huge economic effects on the economic welfare of respective countries. In particular, General Motors utilizes textiles, aluminum, computer chips, plastic, steel, lead, copper, rubber and vinyl. As such, it can not be disputed that it promotes employment in numerous sectors. In this respect, Dicken (2007) posits that one autoworker of General Motors has the capacity to create seven employment opportunities in the manufacturing industries.
Notably, the socio cultural environment has also impacted on the organization significantly. At this point in time, it is worth noting that the current society has a significant degree of social stratification and populations tend to value the notion of class. As such, the type of cars that individuals drive increasingly determines the judgment that the same are accorded by the public. Usually, manufacturers base their decisions on these perceptions that shape societal thoughts. In particular, these viewpoints imply that persons who drive expensive cars are wealthy and vice versa.
Furthermore various authors of whom Bordenave and Lung (2003) are represented assert that consumers tend to attain personal satisfaction whenever they drive new and/or nice cars. The need to incorporate all these vital concerns in the manufacturing of cars has had diverse impacts on various facets of the organization. In his review, Rothstein (2005) speculates that coupled with poor management, this could have contributed to the economic downfall of the organization in the 1990s.
Further, Blackburn (2006) indicates that technology has greatly influenced the functioning of the auto industry in various ways. Of particular reference in this regard is the internet that has had changed the mode of different operations within General Motors organization. A study conducted by Hatch and Cunliffe (2006) to determine the impacts of the internet in this sector in 2002 found out that a significant 60% of prospective buyers preferred using the internet in purchase of the vehicles. Furthermore, 88% of these visited the websites of various manufacturing industries prior to undertaking a test drive. In his review, Blackburn (2006) indicates that the internet has greatly benefited the organization due to the fact that it is more efficient and has relatively low costs than other mediums. Specifically, it has been instrumental in positively impacting on various segments of the society and especially the young and middle aged.
Dynamics in demographics has also been implicated for influencing the operations of the organization. For a significant period of time now, Blackburn (2006) notes that General Motors has targeted the baby boomers generation as its main market for the products. However, this is expected to change because of the realization that this generation is set to retire and hence spend less resources in the auto industry. The focus has been directed to their children that are currently in their 30s and mid 20s. Analytic studies indicate that in the next ten years, the baby boomers generation is likely to account for an insignificant 20% of the total sales in the motor industry (Bordenave & Lung, 2003, p. 62).
This study utilizes the M-form hypothesis in describing the organizational structure of General Motors. Studies affirm that General Motors assumed the multi divisional structure of organization as a form of response to various economic challenges. Fundamentally, this M-form is comprised of operational divisions that represent various different businesses or profit centers. Each of these has an overall corporate officer that is charged with the responsibility of delegating various responsibilities required for daily operations.
Essentially, every division has a self contained and distinct business that has its own organizational hierarchy. In other words, Schwartz (1991) defines this form of organizational structure as a complex entity that is comprised of dependent geographic groups and a central headquarters that is charged with the responsibility of overseeing the overall organizational strategy and coordinating vital interdependencies within it. In his review studies posits that the procedure to attain this form f organization is based on four main steps.
The first step entails acquiring of vital resources. In this regard, Hatch and Cunliffe (2006) indicate that General Motors was created after an acquisition of various small entrepreneurial organizations as well as numerous large organizations that were competing against each other. The second step in this regard constitutes establishment of functional structures in a bit to enhance the efficiency of the larger corporation. Regarding this, Pelfrey (2006) ascertains that General Motors acquired various companies and made practical efforts to improve their functioning to be able to address the future demand with ease.
Attainment of this status was aided by its establishment as an assembler of global commodities. This was characterized by deskilling the members. Moreover, its structure gave it an opportunity to provide close supervision to the employees. The third step according to Hatch and Cunliffe (2006) constitutes specific importance. This is characterized by adoption of a growth as well as diversification strategy and diversification of products in new markets. Finally, General Motors developed a revolutionary diversionary form that was used in managing large corporations.
From this analysis, it is certain that General Motors Company is a complex organization that was established close to one hundred years ago. Its output is large and is considered the largest vehicle manufacturing industry within United States. Within the global arena, it is ranked the second largest auto industry. This is exemplified through its geographically expansive operations. Through time, it has undergone various transformations that are partly influenced by its external environment.
Basically, all factors in its external environment have contributed in various ways to molding the company in to its current structure. Notably, this had various implications on its holistic wellbeing. Seemingly, its organizational structure can be best explained by the M-form hypothesis. This is due to the fact that it is a complex entity whose formulation and creation was highly dependent on small entrepreneurial as well as large competitive organizations. Moreover, it has various interdependent segments whose operations are directed and coordinated by a central power.
List of Reference
Blackburn, R 2006, Age Shock: The Role of Finances, Verso, UK.
Bordenave, G & Lung Y 2000, Strategies in Motor Industry. Pelgrave, USA.
Dicken, P 2007, Global Shift, 5th edition, Guilford Press, USA.
Hatch, M & Cunliffe, A 2006, Organization Theory, University Press, Oxford.
Pelfrey , W 2006, Understanding the Organization and Operations of General Motors, University Press, Oxford.
Rothstein, J 2005, Global Commodity Chain: Auto Industry, Social Forces 84 (1), pp. 50-69.
Schwartz, H 1991. Evaluating General Motor Business, Ethics Quarterly, 1 (3), 248-269.
Snow, C, Miles, R. & Coleman, H 1992, Managing Modern Network Organizations In Christopher Mabey and Bill Mayon-White (eds), Managing Change 2nd edition, Open University Press, UK.