General Motors, also called GM, is an American-based company, which has the international reputation for quality manufacture of cars and trucks. William C. Durant established the company in 1908 and currently, under the leadership of Edward Whitacre, it operates in sells and services of automotives in over one hundred and forty countries around the world. Employing about 244,500 people in its various manufacturing operations around the world, GM is playing a leading role in stimulating economic growth worldwide.
The automotive industry is exemplified by high profile trade disagreements as well as intense rivalry in this century. Since its establishment, GM has been undergoing important organizational changes from a traditional organizational model to a transformed organizational model in order to preserve its longevity in the market. This paper attempts to analyze the structure of the company and its organization style.
GM sells most of its vehicles to the U.S. market. For example, in 2008, out of 8.35 million cars and trucks sold globally, the U.S. accounted for 22.1% of the market share. The top four regional markets for the company are North America, China, European Union, and South America in that order.
The company has collaborations with different automakers around the world. Some of these are Shanghai Automotive Industry Corporation of China, Fiat, and Ford Motor Company. In the global market, the company has recorded significance performance in the Chinese market. For example, in 2009, the company sold 1,830,000 cars and trucks in China, which represented 13.4 percent of its total global sales.
The company is structured into various groups, which represent various regions around the world. These groups are GMAP (GM Asia-Pacific), GME (GM Europe), GM LAAM (GM Latin America, Africa, and the Middle East), GMNA (GM North America), and other operations in different places around the world. Each region has its own president who is answerable to the company’s CEO (“GM profile,” description section).
The Board of Directors, who makes important decisions that affect the running of the activities of the automotive corporation, manages the company.
For example, on December 4, 2009, the GM Board of Directors announced major leadership changes within the company that made Edward Whitacre, who had been previously serving in an interim capacity, to be appointed the company’s CEO on a permanent basis. The company’s mission statement reads, “GM is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success…” (“Company information, para.3).
Its vision statement “is to be the world leader in transportation products and related services (“Company information,” para. 5). The company operates in the automotive industry under the following brands: “Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling” (“About GM,” para.1).
In a traditional organization model, a hierarchical structure is usually observed. In this case, a president or executive is usually regarded as the top most official followed by vice presidents or the position of senior managers. After this, different levels of management follow. Most of the employees are usually found at the bottom of the hierarchy and jobs are grouped by function into various departments. Before major transformations were done, this was the case at GM (Taylor, para. 3).
The company was categorized into various autonomous automakers, which functioned separately and competed with one another. The autonomous automakers consisted of Buick, Cadillac, Oldsmobile, Chevrolet, and Pontiac. However, the rivalry and absence of centralization within the company proved to be an expensive affair for the company.
Therefore, GM adopted the transformed organizational model, which is centralized and cohesive than the traditional model. Regardless of its size or complexity, the company has been able to arrange its diverse workforce coming from different parts of the world to ensure that its operations are run in a streamlined manner.
All the company’s employees are now working towards a common goal and running the company has been more cost effective. In its transformed structure, GM lacks many different departments. Most of the company’s departments are performing the same tasks with related requirements. Thus, this centralized organizational structure makes more sense than the traditional one.
The adoption of the transformed organizational model has made GM to have centralized staff functions. The change that was carried out radically changed its diverse workforce, including its management, since they had to learn central set of skills.
For instance, before the adoption of the transformed model, every autonomous automaker was using different computer software for manufacture of vehicles. This resulted in miscommunication between its different departments. The diverse workforce at GM was to be taught the basics of a central software program which resulted in easier inter-corporation communication.
The large undertaking also made the company’s production team to centralize their operations and learn from one another’s methods of design and engineering, which has resulted in a more productive and easier communication among them. Currently, the diverse workforce at GM communicates and embraces teamwork when working. They no longer work as individuals in completing a particular piece of the puzzle.
The transformed organizational model enabled General Motors to merge its different brand operations. The traditional model made various operations in the automotive company to be redundant. This led to the wastage of resources and time. This is because its employees were duplicating work that had been already performed by another of the company’s eight different brands. The traditional model plagued the operations at the company for years.
However, the merger of GM’s eight brands into four distinct channels drastically changed this. Different vice presidents who are appointed by the company’s Board of Directors head each of the four channels. The United States marketing and field operations are currently more strongly aligned to form four retail channels: “Chevrolet, Premium (Cadillac, Hummer, Saab); Buick-Pontiac-GMC; and Saturn” (Hall, para.2).
As a major strategy in the competitive automotive market, the company is involved in efforts to streamline further its organizational structure. This strategy is intended to lower unnecessary complexity and align resources towards increased growth. Ultimately, the company hopes to regain the market share that it has lost to Toyota, which is a very efficient corporation in the industry. Another strategy that General Motors is using is transforming its portfolio so as to have very differentiated cars and trucks suited for every brand.
For a long time, critics observed that brands within the company were competing with one another in the market. However, the changes that the company has adopted have started to have positive impacts. For instance, Hall notes that “Buick has been geared up for luxury sedan models, while Pontiac will specialize in performance models and GMC is sticking with trucks and SUVs” (para. 4).
The transformed organizational model has made the employees of GM to work on the same page. All of them are working towards realizing the same objective of preserving the core competence of the company of innovation. Because of this initiative, the turnover of the company has dramatically increased in recent years.
Its dominant position in the manufacture of vehicles is largely attributed to the innovative culture that it has embraced in its transformed organizational model. Focus on innovation has also made the company to re-assess the market that it has been striving to approach.
For a long time, the company had embraced a traditional outlook for automobiles. However, with the changing tastes and preferences of its customers, GM has taken a step back to examine critically its position in the market. To maintain this innovative culture, all the heads of the regional operations hold frequent monthly meetings to assess the progress of the company. Global offices usually attend these meetings via phone; therefore, the CEO is able to monitor the progress of the company.
The structure of the company has been affected by various contingency factors such as environment and the lifestyle of its customers in various places around the world.
Because of the nature of its worldwide customers who exhibit distinct tastes and needs, the company has found it to be advantageous to organize along geographic lines most of its activities that can be managed together. Every geographic unit has all the operations that are needed to effectively produce and market products in that region; therefore, this assists in giving the multinational company a more unified face to its local users.
The company’s global corporate headquarters located in Detroit, Michigan, provides brand recognition as well as handling some collective administrative roles. On the other hand, the semi-autonomous local units around the world serve the function of day-to-day running and decision making for the company; hence, the company is able to grow faster.
In order to sell its vehicles to a diverse customer group, the company has implemented a brand management structure that is aimed at selecting diverse potential market areas. As a result, GM has been able to develop strategies to supply these markets with specific brands that meet their tastes such as the “all new” Pontiac Grand Prix, Chevrolet Malibu, and GMC Yukon. These have received an enthusiastic reception in the market.
The ever-changing consumer demographics have made the company to look for non-traditional methods of reaching different customer groups; therefore, its fresh image has started to emerge on different fronts. In efforts aimed at rebuilding its corporate brand image, the company is trying to reach clients in a variety of promotions and venues, for example, sponsorship of the WNBA and partnership with the fashion industry.
In this way, GM aims at reaching the users on their terms and gives them a reason for purchasing its brand of vehicles. In addition, with the evolution of the automobile industry, more consumers are currently using the World Wide Web to become better acquainted with different products before making the final purchase decision. Therefore, the giant automakers use E-commerce as a strategy for reaching diverse customer groups all over the world.
The company culture that is embraced within General Motors focuses on six core values, which gives it the road map on what it wants to accomplish. This is what defines the conduct of the business of the automaker and gives it its standing as a company.
All the workers of the company around that world are aware of the six core values since they are the drivers for the company’s key decisions and activities in all the nations. The first core value is customer enthusiasm. This calls on all the company’s employees to strive in fulfilling the varied tastes and preferences of the customers.
The second is teamwork, which stresses the fact that the company is composed on a unique workforce; therefore, embracing teamwork is the only way to succeed. In this century, GM is faced with intense competition from market rivals such as Toyota and the Volkswagen Group. That is why the next core value focuses on innovation, which is aimed at giving the company a competitive edge in the market. The core values of individual respect and responsibility focuses on respecting the employees’ health, safety, and dignity.
Serving different customers around the world, General Motors has abandoned most of the traditional ways it employed in carrying out its operations. Although it is ranked at position two after Toyota in the automotive industry, it still has several competitive advantages.
These include a large market share that exists throughout the world, years of global experience in dealing with different customers, and a variety of brand names that appeal to all the target markets. However, in as much as the structure of the company makes sense, it must continually adopt changes in this dynamic world in order to maintain its market leadership.
Works Cited
“About GM.” GMC. General Motors Company. 2010. Web.
“Company information.” General Motors. General Motors Company. Web.
“GM profile.” Investorguide. 2010. Web.
Hall, Kenneth. “GM finally merges brand operations.” Motor Authority. High Gear Media. 2009. Web.
Taylor, Alex. “GM Gets Its Act Together. Finally How America’s No. 1 car company changed its ways and started looking like … Toyota.” Fortune. Time Warner Company. 2010. Web.