Analysis of GM’s Organizational and Leadership Cultures

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Introduction

The case study is about GM, which has been described as bereft of leadership and culture. The recommendations from independent investigation highlight various areas to be addressed but fail to tackle the main problem bedeviling the company, specifically, the culture crisis at GM. One of the organization’s strengths is its ability to institute a probe into its ignition switch recall crisis. GM enjoys a global dominance in the automobile manufacturing industry, a position that has made its ignition switch crisis receive much attention. However, there is a serious culture dysfunction at GM that threatens to tear it apart if not urgently addressed. There is a fundamental problem of culture at the GM, which cannot be superficially addressed through developing new policies and procedures, implementing to-down changes, and firing employees.

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Organizational Modeling

From this case study, it is apparent that the current behavioral organizational model at the GM is an autocratic one. The action by the company’s CEO, Mary Barra, to fire 15 employees for a problem that had existed in the company for the past eleven years can, indeed, be described as autocratic. There was a glaring history of failure on the part of the organization to fix the problem of the ignition switch. Although there were several parties within the firm including engineers, lawyers, and investigators who were responsible for the problem, the top echelons of the organization cannot be spared either (Kuppler, n.d.). However, the CEO used her authority and strength to dismiss junior cadre employees when it is apparent that the core problem of the company is its absence of culture. The dismissed employees were not responsible for instituting and steering an organizational culture for the firm. This responsibility rather rests with the top management of the organization.

GM’s behavioral organizational model is different from other car manufacturers in the industry. At Tesla, for instance, the current behavioral organizational model is centered around an organizational culture that places employees at the center of its corporate culture. Tesla pursues a custodial model that offers economic security to its employees. The behavior of Tesla workers is defined by values and customs enshrined within the company’s organizational structure. As a result, Tesla employees are more empowered to search for ideal solutions that are aimed at carving a competitive advantage within the automobile industry. Tesla recognizes that its human resource capabilities and full potentials can only be realized through a strong organizational culture. It believes that its continued growth and expansion within the industry are squarely based on this model.

Another company that has consistently demonstrated success due to its organizational culture is Apple. This company’s values, beliefs, and philosophies are designed to support its human resource to work towards achieving Apple’s strategic objectives. The cultural characteristics of Apple are meant to steer innovation. Indeed, the competitiveness of this digital electronic manufacturer is primarily attributed to the innovative behavior of its employees. Thus, the organizational culture of Apple helps in fulfilling its corporate vision and mission. Thus, both Tesla and Apple put much premium and emphasis on their corporate cultures, which invites their employees to be innovative (Kuppler, n.d.). On the contrary, GM does not have an underlying corporate culture that should guide the behavior of its employees towards a specific course. Therefore, the different organizational models exhibited by these firms rest on their corporate cultures.

In the past, organizational models were mainly matrix, functional, flat, and functional. However, these traditional models of business are constantly being interrupted by the growing digitality of marketplace, team-based organizational structures, and decentralization of operations. Culture plays a crucial role in determining the organizational model appropriate for an organization (Kuppler, n.d.). Currently, culture influences the frame of reference that an organization uses to shape its structure. It is a representation of the beliefs, norms, and values that the organization uses to determine its performance. This is different from traditional organizational models where culture mainly existed to discipline employees. By failing to identify culture as an important element in its organizational structure, GM is indeed operating differently from its peers within the automobile industry.

The flat organizational model structure is unique within the car manufacturing industry. It is a decentralized system, which ensures that each employee is the boss. This provides the employees with an opportunity to be innovative and creative. However, GM is not operating within this model considering the fact the engine ignition problem has been with the company for the last 11 years and no employee has come up with ingenuine ways of fixing it.

The organizational modeling trends in the automobile industry are steadily shifting the motivational models. The shift is primarily towards information-centric technologies that are being adopted within the industry. The desire by employees to offer their best to the company is determined by their motivations. Therefore, motivational models are becoming significant part of management processes. The car manufacturing industry is highly dependent on the market demand for new products. This calls for a firm to be constantly innovative and willing to embrace new technologies. To achieve this, employees must be sufficiently motivated to adapt to the ever-changing preferences of customers.

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Leadership Theory

A leadership style that mainly characterizes the GM in the case study is an authoritative one. The name of the company’s CEO, Mary Barra, appears in almost every detail of the case. Important decisions that touch on the welfare of employees, as well as those that relate with the operations of the business, are made at the top management level under her watch before disseminated downwards. The management seems to keenly observe what their juniors are doing (Bright et al., 2019). This leadership style does not auger well with many employees. It demoralizes and interferes with their levels of job satisfaction since the employees do not feel valued by the top management.

The result is low work performance levels exhibited by employees as demonstrated by the persistent GM engine switch issue. This management style also tends to affect employee relationships with their superiors. Due to the issues of mistrust, employees would rather keep the most critical company issues to themselves instead of sharing them with the management. From this case study, it has been highlighted that the CEO was not aware of the perennial problem even though senior executives, senior managers, and a Chief Engineer were aware of it. This implies that they did not share the information with her because of the communication barriers that characterize the leadership style.

As the story progressed in the case study, the CEO attempts to shift the firm’s leadership style to that of a collegial model, which is based on teamwork. By bringing on board the Vice President of Safety and the 35 investigators, she is indeed calling for the active participation of everyone in building a better GM. Moreover, the Speak Up for Safety program is an invitation of employees to fully participate in safety issues of the company. This shift has been necessitated by both internal and external influences. The internal influences are the realization of the communication gaps between the CEO and her senior executives while the external influences are the bad reputations the company kept on receiving from its car engine crisis. The newly adopted collegial leadership style used in the case study is prone to prolong the decision-making process as there will be many parties involved.

Organizational Culture

The author of this case study has put up a strong argument that the company lacks an internal culture. He indeed blames the company’s woes on the absence of culture. However, in the second item of the Volukas Report recommendation, it has been suggested that commitment to the safety of its consumers should be incorporated in the organization’s fabric and be part of its culture. Nonetheless, the culture that is present in the organization is that of letting employees bear the burden of their mistakes as well as the introduction of new policies and procedures. After investigations, an employee who would have been found to be responsible for certain shortcomings is subjected to disciplinary action including sacking. This is demonstrated by the dismissal of 15 employees and the establishment of Speak Up for Safety program that aims to encourage employees to report safety issues early enough.

Insights and Conclusions

From this case study, it has emerged that leadership and internal culture do not complement each other. The company does not have an elaborate and well stipulated organizational culture that can determine its leadership style. However, a shift to a collegial model style of leadership seemed to have an influence in its internal culture. This is because of its deliberate effort to initiative different programs such as the Speak Up for Safety that value the input of employees. The employee behaviors at GM were largely influenced by the leadership style and the internal culture. The fear of becoming victims of the draconian leadership styles such as being sacked made them feel intimidated and unwilling to share vital information in their possessions with the management.

References

Bright, J. S., Gardner, D. S., & Black, D. G. (2019). Organizational behavior. 12th Media Services.

Kuppler, T. (n.d.). The GM culture crisis: What leaders must learn from this culture case study. Way Back Machine. Web.

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BusinessEssay. (2022, September 3). Analysis of GM’s Organizational and Leadership Cultures. Retrieved from https://business-essay.com/analysis-of-gms-organizational-and-leadership-cultures/

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"Analysis of GM’s Organizational and Leadership Cultures." BusinessEssay, 3 Sept. 2022, business-essay.com/analysis-of-gms-organizational-and-leadership-cultures/.

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BusinessEssay. (2022) 'Analysis of GM’s Organizational and Leadership Cultures'. 3 September.

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BusinessEssay. 2022. "Analysis of GM’s Organizational and Leadership Cultures." September 3, 2022. https://business-essay.com/analysis-of-gms-organizational-and-leadership-cultures/.

1. BusinessEssay. "Analysis of GM’s Organizational and Leadership Cultures." September 3, 2022. https://business-essay.com/analysis-of-gms-organizational-and-leadership-cultures/.


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BusinessEssay. "Analysis of GM’s Organizational and Leadership Cultures." September 3, 2022. https://business-essay.com/analysis-of-gms-organizational-and-leadership-cultures/.