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Capstone: General Motors Company Research Paper


When asking a random person about the most influential, most innovational and overall most famous American companies of all time, one is likely to hear the General Motors Co. being mentioned at least in the top five. A publicly traded corporation that has been around for more than a century, GM has stood the test of time successfully.

Certainly, the company had its ups and downs since September, 16 1908, when it was founded by William “Billy” C. Durant (General Motors, 2014a, para. 2) up to the present days; however, it is not the persistent success that fascinates me about firms, but their capacity to accustom to an unceasingly changing environment, and GM is a graphic example of such a company.

Being a manager in General Motors (GM), which nowadays takes the eleventh place in the top stock list (Investor Guide, 2014, para. 2) is truly a fantastic opportunity for a person that would like to become an influential leader, and an analysis of the GM’s priceless experience is the first step towards getting to know the company and its leaders better.

Analyzing GM’s success, one must admit that a lot of its recent triumph can be attributed to the company’s mission, vision and attitude towards its stakeholders, as well as the choice of the primary stakeholders in general. As the official company’s statement says, the company’s leaders put a strong emphasis on the company’s policy of expansion into the global market and the fact that GM is a multinational corporation.

Thus, GM’s mission concerns engaging into “socially responsible operations, worldwide” (Mission statements, n. d., para. 1) and providing “products and services of such quality that our customers will receive superior value” (Mission statements, n. d., para. 1), as well as welcoming the company’s employees and business partners to share the company’s success and making sure that the stockholders “receive a sustained superior return on their investment” (Mission statements, n. d., para. 1).

The given mission statement shows that GM has taken all major stakeholders into account and aims at satisfying their needs and meeting their interests. While such a complex task is going to be rather difficult to perform, the very fact that GM has a very stringent set of ethical principles is worth appreciating.

These principles will help the company not only gain weight in the target market and among the future partners, but also maintain positive relationships among the staff, therefore, creating perfect environment for the company’s economic performance and evolution.

When it comes to evaluating the effect that porter’s five forces of competition have on GM, one will notice inevitably that of all threats listed, the rivalry among existing firms (Schahter, 2012) seems to be the one of the greatest concern.

Indeed, taking a single look at the rest of the forces is enough to realize that GM has little to fear in terms of competing with new entrants; neither is the company afraid that the product in question will be ousted by its alternative.

True, the popularity of hybrid cars has grown considerably; however, GM has also pointed at the change of its vision towards a more environmentally friendly one and has launched the vehicles that run 30 mpg at the very most (GM, 2014).

GM SWOT Analysis

Strengths
  • Global delivery model;

(GDM allows addressing customers’ needs in a more efficient manner, since the language barrier and cultural differences are of no issue any longer);

  • Focus on stakeholders’ interests as the basis for the company’s mission and vision;
  • Positive company image within the Asian (Chinese) market;
  • Domination in the home market (16% of the total home market share belongs to the GM Company);
  • Widely recognized brands that sell well among the target audience.
Weaknesses
  • Brand dilution

Because of several flaws in the recent updates of GM’s famous brands, the company has lost a considerable about of loyal customers.

  • Bureaucracy within the company

Because of a set of very rigid standards and principles that the company’s transactions a carried out and general actions of the company’s managers are taken, the company has become notoriously slow in its reaction towards market changes.

  • Unreasonably high pricing policy;

As a brand that has become a household name since the beginning of the XX century, GM has the right to value its brand high. However, in the light of the recent quality issues, its price setting strategy has to be redefined. At present, the prices for the company’s production are shockingly high. While in 2006, the company’s “no haggle” policy (Valdes-Dapena, 2006, September 24) worked for the benefit of sales, attracting more customers and earning their trust, the current pricing policy clearly contributes to shrinking the number of customers down.

  • Intolerably frequent recalls.

As the recent data shows, the company had to recall “nearly 300,000 Chevrolet Cruze cars” (because of the technical issues, particularly with the transmission line and brakes (O’Toole, 2013, August 16)). The given issue has had its toll on the company’s popularity.

Opportunities
  • Promotion of hybrid cars and other types of environmentally friendly choices;
  • Using the increasing prices for the fuel;
  • Shaping customers’ needs by introducing new features into products and conjuring a successful promotion campaign for new brands;
  • Adopting the acquisition policy and merging with other companies.
Threats
  • Unstable fuel prices;
  • Increased competition (Ford, Chrysler, Toyota, etc.);
  • Increased prices for raw materials (in 2011, the price for raw materials made $3,500 per car sold at $28,000 (Suttell, 2011, January 17); in 2014, the estimated price for raw materials will rise by 5% (Suttell, 2011, January 17).

Judging by the fact that GM is suffering from the increases in costs for supplies and a nonetheless rapid decline of its products popularity among the target audience, it will be reasonable to suggest that the GM should switch to a more efficient manner of advertising its product, at the same time increasing the rates of products quality by introducing better quality evaluation systems.

Seeing how delivering high quality results demands that company’s costs and, therefore, prices for the product should rise, it will be highly recommended that the GM should cut the costs for inbound and outbound logistics (i.e., transportation of raw materials) and spend sufficient amount of money on a new advertising campaign in order to cement the GM brand in people’s memories.

The leadership issues within the GM Company should be touched upon. In many ways, the path chosen by the GM leader has defined the unique organizational culture of the company, in which the principle of shared knowledge, customer satisfaction and commitment to the company prevail.

Because of the use of transformational leadership, the company leader manages to motivate employees for better performance (Ishikawa, 2011), at the same time changing their attitude towards their job, customers and product quality.

However, because of the need to relate to the target audience and address customers’ individual demands, GM should also adopt the principles of laissez faire leadership in that the company’s leader should give the leaders of the GM affiliates the freedom of choice on a local level (Kierulff & Grant, 2009).

Finally, the choice of corporate governance mechanisms related to the new set of principles that the GM is going to be guided by demands that the company should introduce the concept of an independent audit into the company’s production process and quality assessment.

Seeing how a mixture of transformational leadership and laissez faire leadership style has been chosen in order to help the company evolve, it will be reasonable to suggest that independent audits will help check whether the leaders of the affiliates follow the company’s quality standards and satisfy customers’ demands (Guxholli, Carapici & Gjinopulli, 2012).

It is crucial that the laissez faire leadership principles should prevent the corporate governance principles from allowing GM leaders to interfere with the decisions and choices of the local affiliates.

Seeing how the leaders of affiliates are aware of the details that the major leaders may have no idea about, it will be more appropriate to leave the decision-making process on a local level to the former. Small business relevance principle is another key to the company’s success within the target market.

The choice of a laissez faire leadership style as one of the components of the general leadership style, however, may lead to certain ethical concerns. For instance, the rates of fraud may rise due to reduction in the number of staff monitoring activities.

The given ethical issues can be resolved by using the transformational leadership elements and change employees’ motivation, thus, shaping their organizational behavior (Chan & Cheung, 2012).

In addition, financial incentives should also be provided for overachieving employees. Thus, the concept of healthy competition will be included into the company’s standard for organizational behavior.

Based on the aforementioned information, the communication plan for the GM must include the following:

  • Who: business people and families;
  • What: customer satisfaction as top priority;
  • When: within the next three months (advertising campaign development);
  • Why: improving GM’s reputation and increasing sales rates;
  • How: use of modern media;
  • By whom: GM’s leader and key people.

Although General Motors has had its ups and downs, there can be no doubt that the aforementioned experiences, both positive and negative, have contributed to shaping the company into what General Motors is famous for nowadays, that is, its ability to survive the most complicated business conditions and find solutions to some of the most difficult business and economic dilemmas.

Judging by the results of the analysis conducted above, the company is going to face a number of risks in the future, yet taking these risks will entail stellar financial opportunities, as well as chances for future evolution and expansion. It could be argued that the leadership strategy in General Motors could use some improvement in terms of enhancing the employees’ motivation.

However, it seems that, taking the company’s recent success into account, one should abstain from fixing what is not broken. As long as General Motors retains its reputation of an innovative company with high quality standards, it is going to remain at the top of the list of the most successful publicly traded companies ever.

Reference List

Chan, A. W. & Cheung, H. Y. (2012). Cultural dimensions, ethical sensitivity, and corporate governance. Journal of Business Ethics, 110(1), 45–59.

General Motors (2014a). Company: History and heritage. Web.

GM (2014). Innovation: Environment. Web.

Guxholli, S., Carapici, V. & Gjinopulli, A. (2012). Corporate governance and audit. China-USA Business Review, 11(2), 253–267.

Investor Guide (2014). Stock research. Stocks. Web.

Ishikawa, J. (2011). Transformational leadership and gatekeeping leadership: The roles of norm for maintaining consensus and shared leadership in team performance. Asia Pacific Journal of Management, 29(20), 265–283.

Kierulff, H. & Grant, L. (2009). Limiting laissez faire profits: The financial implications. Journal of Business Ethics, 90(3), 425-436.

Mission statements. Web.

O’Toole, J. (2013). . CNN Money. Web.

Schahter, H. (2012). Understanding the five forces of competition. The Globe and Mail 2, B20.

Suttell, S. (2011). . Cleveland Business. Web.

Valdes-Dapena, P. (2006). . CNN Money. Web.

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IvyPanda. 2019. "Capstone: General Motors Company." November 14, 2019. https://ivypanda.com/essays/capstone-general-motors-company-research-paper/.

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IvyPanda. (2019) 'Capstone: General Motors Company'. 14 November.

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