Background
Not all companies have succeeded at restructuring their operations due to globalization, and General Motors (GM) is one of them. There are significant internal failures that mark its downfall, including safety standards issues, manufacturing flaws in its cars’ parts, and the inappropriate initial response to the accusations on these topics (Spector and Lesser, 2021). At the same time, the external pressure in the market negated the firm’s competitive advantage. GM has failed to enter many regional markets, such as India and South America, in which it was overshadowed by Asian car manufacturers (Homer, 2020). These factors define the GM’s competitiveness, as shown in Table 1.
Table 1: General Motors SWOT Analysis
While GM had a period of success, it was negated after crises. As a result of the company’s failure to adapt to the new environment, Japan’s Toyota has claimed the first place among carmakers even in the U.S. market (BBC News, 2022). There is the need for GM to reestablish its name on the automobile market. This paper will examine an appropriate change strategy and its specifics for General Motors.
Proposed Change Strategies
The first strategy is to excel at the technological environment through acquiring crucial information on new technologies. The primary target of this change is to present a solution that can help the firm to compete with Tesla and other top electric vehicle (EV) manufacturers. GM already tried this method with unfavorable results, and the current state of the superconductor industry does not provide a viable opportunity to enter the race for the most energy-efficient electric motor (Morris, 2019). The firm needs to take a different approach due to the risks related to entering this technological race.
There is a possibility for GM to cut its costs via restructuring, including laying off employees and changing the factories’ specifics to better fit the current market. Such a drastic change may result in a window of opportunity for GM, in which the firm has to follow the EV trend to the best of its abilities. Another key approach is to adapt to the regional markets with products that are specifically customized for them (Lauer, 2021). However, the firm will not be able to introduce new models and expect a long-term impact, as the shift toward EVs will overtake regional markets. GM can also try to re-establish its reputation as a trusted car manufacturer through new values and mission. The firm has a corporate culture that does not make delivering bad news easy (Brooks, 2022). By focusing on this change alone, GM might not reach the new markets that have issues with the company’s products other than trust.
Costs and Resistances
There are barriers that can play a detrimental role in GM’s change process. Refitting factories to produce EVs is a costly process that might not be well-supported by local workers, whose expertise in manufacturing gas-powered vehicles is already vast. To reduce this resistance and its costs, the firm must provide a hierarchical restructure in management to adapt all leading personnel to its new paradigm that will make the transition as smooth as possible. Eliminating dissonant information that causes workers to revolt against a proposed shift can be done through company-funded retraining opportunities and promotions of sustainability as a primary shared value in GM (Lauer, 2021). Employees may need to be convinced that this approach is the best through incentives to try EVs for themselves.
Communicating Change
The risks involved in the proposed transition are significant, yet GM must take a realistic approach when establishing a new paradigm. All leaders, their followers, and customers must be knowledgeable on the events occurring within the firm that might affect its future. These interactions are critical for any firm, as they outline how successful it is in delivering new products and highlighting its values that are important to both customers and stakeholders. First of all, there must be a shift toward openness and honesty in all GM’s communications. Moreover, the company’s ethical code must be up to the modern standards and outline how all sides benefit from the company’s course on sustainability (Brooks, 2022). Managers must translate this change through all hierarchical levels and lead by example.
Cultural Changes
The failure of GM can only be reconciled with a drastic change in its management and business strategy. An organizational culture is a success factor that represents a firm’s ability to promote its values and work on its mission as a team (Lauer, 2021). The current state of GM’s organizational culture indicates that there might be gaps in communication after implementing the proposed change. The company has to adapt to EVs and seek new ways to appeal to the car market through promoting sustainability goals above other organizational values. The current organizational culture of GM shows that the company is not sufficiently open in its communications, both internal and external (Brooks, 2022). To fix this problem, the firm must enforce transparency policies that will highlight its willingness to change to customers and stakeholders.
Reference List
BBC News (2022) ‘General Motors 90-year reign as top US car seller ends’.
Brooks, C. (2022) ‘6 lessons in corporate ethics from the GM recall’, business.com.
Homer, D. (2020) ‘GM failed to expand into 1 of the biggest emerging auto markets’, MotorBiscuit. Web.
Lauer, T. (2021) Change management fundamentals and success factors. Berlin, Germany: Springer.
MacDuffie, J.P. (2018) ‘Why General Motors shifted gears in its manufacturing strategy’, Knowledge@Wharton.
Morris, R. (2019) ‘Why did Tesla succeed where GM failed? Timing’, Medium.
Spector, M. and Lesser, B. (2021) ‘Special report: Suit over deadly crash renews spotlight on GM safety practices’, Reuters.