Red Group
MGT-240 Introduction to Management
October 3, 2014
Mr. Kevin Reidhead
General Motors Ignition Switch Recall – Management Issues
The overall belief of management is that it is the pursuit of
organizational goals efficiently and effectively. In order to achieve these
company goals one must be verse in four main functions of management and be
able to succeed on some levels in all of them. Typically, a good manager
strives to achieve both goals of being efficient and at the same time being
effective. Unfortunately, many companies strive for efficiency versus being
productive. This thought process could cost a company millions if not
billions of dollars and substantially even worse; public backlash and
mistrust. In the case of the General Motors (GM) Ignition Switch Recall
there were deficiencies from top to bottom that could have been avoided and
ultimately lives saved. During this essay we are going to take a look at
the management structure of GM, the mistakes that were made by management,
and what GM can do going forward so as not to repeat these mistakes in the
future and rebuild the trust of the public and its employees.
In order for any company to have prolonged success they need to have
the proper leaders and management in place. This was the belief of Mary-
Wayne Follett who believed the sharing of power between managers and
employees. Follett believed that conflicts should be resolved by having
managers and workers talk over differences and find solutions that would
satisfy both parties—a process she called integration (Kinicki & Williams
2013). This belief is the simplest of behaviors that make up a good
management structure and one which was ignored by GM. The company was
operating in silos and the lack of communication was evident all over the
company. Typically, big, complex companies are typically structured so that
decision-making is separated according to function, geography and product.
That naturally creates silos within the company where management is not in
communication which leads to insular management (We've all got GM Problems.
June, 2014). Recent reports suggest that engineers working at GM knew of
the problems with the ignition switch but found it too costly to fix. The
company didn't fix the ignition switch problem because the different
departments were not communicating with each other. There were engineers
at GM that were looking into the report of cars stalling while moving while
engineers in another part of the company had designed air bags that would
not deploy when cars were technically off. This lack of communication
between the different groups meant engineers made different decisions on
how to fix the problem. In theory, GM was deficient in almost every
function of management from planning and organizing. General Motors is a
company with a hierarchy culture and that is the root of their failures.
At the time of the ignition recall, General Motors was operating under
a hierarchy culture which at its routes is conservative in nature. The
hierarchy culture does not lead to collaboration amongst employees and
management. If there was this collaboration then the ignition switch issue
would have been identified earlier and a plan in place to rectify the
situation would have been understood. In retrospect, General Motors would
have been better served to follow a clan culture. By utilizing this
culture, you place an emphasis on internal focus and values flexibility
rather than stability and control. This culture encourages collaboration
and provides training and developing its employees. By switching to this
culture General Motors would have avoided the work silos that were at the
crux of the ignition switch recall.
GM is a large worldwide company that follows the organic organization
design type. For public knowledge, it was said that GM knew about all
malfunctions when forming cars within the company. Although all
malfunctions are held up in different departments, for different types of
engineers, there was no communication between departments to help rectify
all the odds and ends of the building during the functional process. In
GM's defense, recalling all malfunctions recognized during the building
process, was never brought to full attention because it was too costly to
fix. The organic organization design is not the best decision for large
companies like General Motors because the process of making and physically
building a product should include a lot of cross-functional communication
and also testing updates. Managers should also take into consideration that
a mechanistic organizational design could be more suiting and efficient for
the company after experiencing the recall. The idea of centralizing and
decentralizing the company coincides, because there are different types of
engineers, which makes sense to decentralize so one group can focus on one
thing. However, it is in the General Motors best interest to minimize
product errors in order to provide valuable, reliable products.
To avoid such problems in the future, it is best that General Motors
focus strictly on the business structure, strategically, tactically and
have an effective operational plan. For a strategic plan, GM should focus
on timeframes, whether it may be a yearly or monthly plan, it is going to
help organize the business and also help engineers complete a finished
product in time for testing before launching. Not only will a timeframe to
finish a product be more efficient, it will be more a profit if a vehicle
was launched with no malfunctions, which would even out with the cost of
paying employees to stay longer hours to work. Tactical planning needs to
be more effective for GM, middle managers should be able to communicate and
work cross-functionally to help achieve company goals. The operational
planning, the front line managers should be focusing on helping the
engineers with anything they may need, being a manger and being involved in
the process of a creation will help for future management roles. General
Motors, should focus on the communication process of the business, and
master cross training, that way every employee, manager etc, has an idea of
what one could potentially recognize or help with.
The organizational culture of General Motors at the time of the
recall was that of nothing more than that of lies, secrets, and cover-up.
General Motors knew the ignition switch was faulty and the management chose
to keep their mouths shut. GM employees have been aware of the issues with
the switches for some time however with the fear of losing their much-
needed job they would not voice their opinions. It was not until it was
reported that 13 deaths and 54 crashes involving General Motor vehicles did
the truth of the faulty ignition switch became known to the public. In a
recent article, it was said that an internal probe of General Motors Co was
the cause of a delay in recalling the defective cars and it is expected to
conclude there was no concerted cover-up, but that the managers operating
in isolation failed to make the connections and act on evidence of the
problems that now are linked to fatal accidents (Bennett and Lublin, 2014).
Since the days of the recalls and with CEO, Mary Barra, now stepping up to
the plate it is apparent that the culture of the organization is slowly
changing and for the good. Her challenge will be to break through the
culture of fear that GM employees have when it comes to voicing their
concerns about the products they produce. It has been decided that a
number of people will be dismissed from their positions at GM as they have
been named as being responsible for the mishandling of the safety defects.
Management issues are fundamental to any organization and GM is no
exception to this. Although GM, has tried to employ the four steps of the
control process there is one that did not work out so well. GM did not
take control of the situation of the faulty switches until the accidents
and deaths occur. The management did not listen to the few employees that
stood up to them advising them of the faulty switches. Going forward, the
CEO and her management crew are going to start listening to the staff when
the express a concern and they are taking action for the people that have
been injured or the families that have lost a love one because of the
unfortunate situation.
For the entire population of consumer's who purchased a GM vehicle
that was apart of the recall, they have all suffered pain and loss. As a
company, GM should really focus of regaining consumer respect, by creating
a new vision statement and mission statement. This is where the company as
a whole would need to rebuild themselves, for the future revenue of the
business. Recreating product, management teams and employee teams in
general through out the company will help minimize any obstacles when in
the process of launching a new car.
In conclusion, GM's goals need to be set to maximize revenue. It will
be focused on how efficiently and effectively the company can be to gain
respect back from the downfall. GM's future goals should be set off of the
number of recall's that have taken place so that history won't repeat
itself, and the reputation the recall's have given the company.
References
Bennett, J., & Lublin, J. (2014, June 4). GM Recall Probe to Blame Cultural
Failings. Retrieved from http://online.wsj.com/articles/gm-ceo-to-discuss-
ignition-switch-probe-findings-thursday-1401897900
Kinicki, Angelo & Williams, Brian (2013). Management : a practical
introduction. Sixth Edition.
We've all got GM Problems. (June, 2014). Retrieved from
http://time.com/2863214/weve-all-got-gm-problems/
ANDERSON, J. (2014). What's Behind All the Recalls. Kiplinger's Personal
Finance, 68(8), 69
