Introduction
General Motors ignition switch recalls crisis is one of the most global recalls, which have ever happened in automotive industry. Not only has the company already recalled almost 800,000 vehicles across the United States of America, but also it forfeited US$ 900 million to the government as a compensation fund for the potential victims. In addition, by April 2014 the global recall rate of the GM cars reached the point of 30 million vehicles, inflicting serious damages to the company reputation and its financial standing. Despite the fact that the company is one of the strongest financially and organizationally, even its sophisticated mechanism of internal quality control procedures flunked
While some analysts believe that the main cause of the problem was inadequate quality assurance operations, Tim Kuppler argues that it the poor organizational culture of GM that begot the crisis. Specifically, in his “The GM Crisis..” the author speculates that the primordial reason of the egregious violations of the quality assurance procedures are the result of stagnating and rotten corporate culture, which tolerated shifting of responsibility and indulgence to the product quality imperfections (Kuppler, 2014).
The purpose of this essay is to provide a comprehensive analysis of the impacts of current organizational models to the situation in question, and to provide a comparative overview of other organizational models in the automotive industry.
Organizational Model of General Motors and the Product Quality
The case study revealed that although this approach to management is fading from the corporate agenda, General Motors still adheres to the principles of authoritative governance and divisional organizational model. Despite the fact that this approach seriously simplified management-related issues, yet it often blurs the lines of reporting and accountability. Specifically, the employees often start believing that their senior managers who are responsible for a particular problem. Furthermore, the model used by General Motors is tolerant to concealment of the existing product problems, especially if the company products are somehow endangered.
The current behavioral model used by General Motors can be described as a combination of autocratic and custodial systems. Specifically, while the company provides substantial financial benefits to its employees, they have little or no control over their work function (except for the engineering departments). As a result, staff of these organizations is often poorly motivated and lack professional justification (Phegan, 1994). Because of these disadvantages of autocratic model, the managers of BMW decided to institute supportive type model of organizational culture. This model emphasizes the importance of using aspiring leadership strategies, i.e. though it does not provide much control or financial benefits to the employees, it encourages expression of their ideas. Quite frequently, such ideas are practically implemented by the managers (Donovan, 2006). One of the newly emerged players of the USA automobile industry – the Tesla Motors employs a popular collegial approach to building organizational culture. In contrast to autocratic and other traditional methods, this approach focuses on the importance of performance of the entire team, while individual results are not particularly relevant.
The practice demonstrates that contemporary approaches to building organizational culture are heavily dependent on organizational culture (Black, 2004). To be more specific, both supportive and collegial models of organizational culture require positive cultural atmosphere in the organization. The practice shows that good culture influences unity of the employees, which is necessary for productiveness and corporate loyalty (Donovan, 2006). At the same time, it is important remembering that in autocratic organizations, which were prevalent in the business world of the past, corporate culture was developed, imposed and maintained by the managers. In contrast, in supportive and collegial organizations it evolves in a natural course. Therefore, the human resources managers of such organizations should be especially scrupulous (Phegan, 1994).
Because automotive industry belongs to the list of conventional industries with many divisional units, the use of system model of organizational behavior is almost unique to it. This approach to organizational behavior of a company emphasizes that different employees of the organization may have different personal and professional goals and objectives. Therefore, instituting organizational culture and human resources policies that will be agreeable to every member of the organization is not possible. However, General Motors blatantly overlooked the importance of structural attitude to its workforce. Thus, because of a shift in labor paradigms and global change of employment culture, gradual degradation of the team environment within General Motors became inevitable.
In addition, this case study revealed that motivational models used by the General Motors have substantially shifted in comparison to the trends in organizational modelling. Thus, despite the fact that the today’s business practice distinctly demonstrates that the most important elements of a company organizational culture are empowerment of the employees and accountability, General Motors remains heavily dependent on the foundations of the autocratic approach to corporate governance. In other words, there is a strong perception among the company employees that their superiors should be responsible, which are beyond their professional duties. In contrast to this prejudicial attitude, contemporary approaches to organizational culture emphasize that the staff members should be proactive and committed to rectify organizational flaws, even if such actions exceed their professional capacity (Black, 2004).
Conclusions
References
Black, R. (2004). Organizational culture : creating the influence needed for strategic success. United States: Dissertation.com.
Donovan, G. (2006). The corporate culture handbook: how to plan, implement and measure a successful culture change programme. Dublin, Ireland: Liffey Press.
Kuppler, T. (2014). The GM Culture Crisis: what leaders must learn from this culture case study. Web. Retrieved from http://switchandshift.com/the-gm-culture-crisis
Phegan, B. (1994). Developing your company culture : the joy of leadership : a handbook for leaders and managers. Berkeley, CA: Context Press.
