ORGANIZATIONAL CHANGE(GENERAL MOTOR) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

ORGANIZATIONAL CHANGE(GENERAL MOTOR) Case Solution

1^st-step: Unfreeze

Due to continuously working in one way, people in the organization become used to of doing just routine work and it is difficult to make someone unlearn, what he/she is doing on day to day basis. These habits become a major cause or reason of inefficiencies in the organization. So by unfreezing the environment, organization culture must be made ready to change by asses the needs for change. Which in this case was, people usually became used to of the daily tasks, so changing the way of performing the tasks becomes necessary to be introduced in organization.

2nd–Step:Change

The second step is of implementing the required change, which might take some time but it is always worthwhile in the long-run. In the case of General Motors, bringing the change to decrease the operating costs and to remain competitive with other International firms in the organization was very important. This stage is very crucial because the change happens at this stage and very high level of control is required at this stage. During the change process, if anything goes wrong then it can affect the whole process and its future impacts.

3^rd-step: Freeze

The last step is to freeze or make it stick to the change. This enables the company to gain the organizational effectiveness, which further helps the company to build its good brand image. Because now its employees will become its major strength, which will help company to survive in the long-run. So, by freezing change, change agents will continue their efforts to continue the implementation, until it becomes the habit of the employees and becomes a constant norm of the organization.

Vision of the Change

As change management process is the need of the time, so GM’s vision in adopting the change was to cut its operating costs and to bring the modification in the culture.

Cost Cutting

As cost was the major concern of the GM’s management, so the company decided to cut its cost of some brands such as Saturn and Hammer to make company avoid making operating losses. Then, company decided to make some layoffs by removing few teams and then also cut the pay of employees to decrease pressure on its operating costs, around $15 billion was saved by the company in recent years through this strategy.

Cultural Change

In order to change the culture of the company, General Motors (GM) removed its automotive product board, which was directly reporting to the C.E.O. Total members of the board were around 8 members. This helped GM is speeding up its day to day decision making process Moreover, the company created the culture where each person was accountable for his performance and contribution. So, this was a major change in the organization, as now everyone was feeling the sense of responsibility towards his actions or contributions in the company and this helped in improving the efficiency of the employees.

How the Change was communicated

Management of General Motors (GM) adopted the top down approach in communication of the change, which was the reason that, employees were totally ignored in the decision making process as compared to the other companies. This also raised the question on management style, where some top management officials took the decision without taking rest of the employees in confidence.

Overall Evaluation

Overall the company took the decision in haste, which was also the need of time.

Quality of the Change Agent’s Approach

In adopting the change in the General Motors, change agents used a top down approach in communicating the change. Which was the reason that, employees were totally ignored in decision making in comparison to the other companies. This also raised the question on the management style, where some top management officials took the decision without taking rest of the employees in confidence. So, in future management should take care of the employees by involving them in major decision making, because this will give the employees sense of privilege and ownership of the company

Outcome from process and its prospective

As due to the changes adopted by the company in the year 2009, the results were very favorable in terms of both cost cutting and cultural change. The results are described as follows:

Results from cost cutting

The results of cost cutting can be seen by looking at the number of employees of General Motors in 1998 and 2009, which decreased from 226,000 workers to 101,000 workers respectively. This helped the company to focus more on its sales rather than cost cutting. In addition, the number of factory workers dropped from 60,000 to 40,000, which reduced the significant amount of labor cost of the company. So if we analyze the impact of this strategy, we can say that GM had been successful in adopting this strategy and which contributed to the success of the company.

Results from cultural change

The General Motors attained very good results from cultural change, as now employees were more aware about their roles and responsibilities and their accountability in the company. Moreover, this provided the employees sense of responsibility which in result improved the overall productivity and efficiency of the employees.

Recommendation

As we analyzed the change in the company and the change GM has adopted to make the company stable in long-run along with keeping the sales growth smooth over time, which is necessary to remain competitive in the market and to increase the market share of the company. The followings are some suggestion and recommendation for the company, which have the potential to bring the effectiveness in the operations of the company and ensure the future success and increase in the market share.

As the company used a top down approach in changing its culture, which ignored all the middle and lower level of employees, therefore, this decision bypassed the view of majority of employees. Company should have involved all the employees while taking such decisions.
General Motors should focus on producing fuel efficient automobiles to remain competitive in the market in future. As companies like Toyota are investing heavily in the innovation and have lowered the operating costs than GM. In addition, the company should also work to improve the quality and safety of the vehicles, this will maintain the sales growth of the company along with keeping the employees motivated. This will be beneficial for the company in the long-run, as the employees are the core strength of the company to cope with the future challenges.
In addition, General Motors should invest in improving the public perception of its brand. This can be done by providing quality services to the customers and by owning their customers, because after all the sale services are very important in keeping the customer loyal and customer’s loyalty will further improve the company’s image as the positive word of mouth will circulate in the public.
Moreover, the company should take its employees into the confidence before taking any strategic decision, which will impact the nature of work in the organization as it will also give its employees a sense of ownership and responsibility towards the company. Only then, they will own the company and put their maximum effort to make the company successful, which will ultimately increase the productivity of employees and the company as a whole................

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