GM is an American car company known for its widely popular brands such as Cadillac, GMC, Buick and the like. The company found itself in unfamiliar waters upon the revelation of a part-defect issue in its Chevrolet Cobalt and the Pontiac G5s. This situation caused the deaths of 13 individuals and ultimately forced the company to recall almost 2.2 million vehicles from the market. The attention was not focused on the recall but on the time GM took before recalling the potentially dangerous cars from the consumer market. I will assess the implications of the company’s organizational culture on the part-defect controversy, as well as the US government’s responsibility to consumers upon its involvement in such situations.
Consequences of General Motors’ organizational culture
Organizational culture is defined as a company’s way of doing things (Schein, 2010). According to Pammer (2015), GM’s culture was identified as the main culprit in the part-defect saga. The company discovered the defect issue in 2004 when the company’s Cobalt model reportedly lost power upon the car owner’s unintended contact with the steering column. This revelation was made prior to the official launch of the Cobalt model. The realization of this situation did not prevent the company from proceeding with launch of the model.
GM employees were subjected to bureaucratic procedures as every situation had to be handled by a committee prior to the approval of a solution or a recommendation. This procedure was time consuming and costly. In the case of the part-defect problem, the issue had to be passed through several Problem Resolution Tracking Solutions (PRTS) before proceeding to different company committees.
GM employees were also afraid of speaking about potential problems in the company. According to a former engineer, the company never condoned any problems as they were unacceptable. In instances where an employee brought up such issues, he/she was likely to get fired. As a result, the ignition problem was ignored by employees as they feared losing their jobs.
The responsibility of the United States government to consumers
The government’s role is to protect its citizens from harm. The US government agreed to a bailout plan with GM to save the company from collapse. It held a primary stake as per the agreement and later sold it according to the debt-payment plan.
The government agencies involved in public safety such as the National Highway Traffic Safety Authority (NHTSA) are responsible for upholding safety standards of vehicles. However, this role was not evident in the part-defect saga as the NHTSA did not address the issue with the seriousness it deserved. For instance, upon the presentation of the GM ignition issue by an official from NHTSA, the agency chose to place the problem with the Office of Defects Investigation (ODI). The probe did not yield any results as it provided a negative correlation between the car crashes and their ignition systems. The agency probed the part-defect issue on two separate occasions, both yielding similar results hence leading to the completion of the investigations.
Conclusion
An organizational culture plays a critical role in the success or failure of a company. The realization of this fact will assist companies forge a plan that creates an environment of openness, transparency and professionalism. The government should also uphold its role of protecting citizens from corporate greed irrespective of its involvement in any related business. This strategy ensures proper decision making as there is a clear division between government’s core business and supplementary business.
References
Pammer, W. (2015). The GM culture: Recipe for disaster. [Video file]. YouTube.
Schein, E. H. (2010). Organizational culture and leadership. New York: John Wiley & Sons.