Overall GM is currently confronting some of the most difficult obstacles that it has ever had to overcome. Government intervention is no guarantee that the company will be able to overcome these obstacles. Billions of dollars have been given to the company in an effort to save it from further demise. However, capital alone will not save the company, there must be a strategic effort of the management to properly restructure the company to ensure that GM can recover. Such a recover is going to require a very specific Strategic Plan. Such a plan will be detailed thoroughly in the remainder of this report.
Chapter III Strategic Plan
Although there is a great deal of negativity surrounding GM and the ability of the company to recover from its current situation, with the proper strategic plan the company can improve its situation. However, to develop an effective strategic plan the company must evaluate its situation and develop a plan that will properly address the situation.
GM has existed for just over 100 years. The company, founded in 1908, operates in 34 countries and employs more than 244,000 people. GM manufactures automobiles (trucks and cars). GM's automobiles are sold in 140 countries throughout the world. The company manufactures automobiles under the following brand names: Saab, Buick, Holden, Chevrolet, GM Daewoo, HUMMER, Cadillac, Opel, Pontiac, Saturn, Vauxhall, Wuling and GMC. In the year 2008 the company sold more than 8 million vehicles. America is the largest market for GM. GM also has a significant share of the market in countries such as the United Kingdom, China, Russia, Germany and Canada. In addition, OnStar a GM company, is the leader in the industry as it pertains to security and vehicle safety (Company Profile).
Supporting case studies
GM is not the only automotive company that has experienced times of turmoil or overcome huge obstacles. One such company was Ford. Ford was faced with the challenge of creating a vehicle that would be affordable to a large number of people. This is the same challenge that GM is facing as it attempts to create hybrid./alternative fuel vehicle that is affordable to the masses.
In the case of Ford, Henry Ford wanted to manufacture
"a motor car for the great multitude." He wanted to build a high-quality automobile that would be affordable to everyday people. He believed the way to do this was to manufacture one model in huge quantities. "Ford and his company s engineers designed a car named the Model T. First offered for sale in 1908, the Model T. was produced like other cars -- one vehicle at a time. But the Model T
was more sturdy and powerful than other cars. Considered relatively simple to operate and maintain, the auto offered no factory options, not even a choice of color. The Model T. was also less expensive than most other cars. At an initial
price of $950, 10,000 autos were sold the first year -- more than any other model
("Henry Ford and the Model T")."
So how did Ford accomplish this? Henry Ford and those working with him developed an innovative way of manufacturing cars, known as mass production. Ford's feet was only accomplished because the company dared to be innovative and create a totally new way to manufacturing. This type of innovation is also essential for GM to adapt of it is to recover from its current dire situation.
Analysis and Methodology
For the purposes of this strategic plan the Situation, Target, Path (STP) methodology will be utilized. The first step in this methodology is to evaluate the current situation so that the problems can be properly analyzed and confronted. The second step is to specifically target weakness in the company so that they are handled in an effective way. The third step in this methodology is to develop a path for the future of the company (What is the STP).
Vision and Mission
Vision statement: to be the leading company in automobile manufacture/sells and related services (Vision & Strategy).
Mission statement: The company will continue to the be the global manufacturer of innovative environmentally friendly vehicles.
Quality and Management initiatives
General Motors is committed to the manufacture of quality automobiles. The company's utmost concern in terms of quality is the safety of its products. GM wants drivers and their passengers to be safe when they travel in a GM vehicle. To this end the company has always had a high standard for safety. In fact GM developed a retrofit trunk anti-entrapment system before any other company in the industry. GM was also the first car company to announce the development of an infrared trunk sensor that can detect the presence of human beings and will provoke the horn to sound and the trunk will open automatically (Vision & Strategy).
Also as it pertains to quality management the company has attempted to reduce vehicle emissions. In fact GM was the first automobile company in the Chinas market to put catalytic converters of all automobile manufactured in China (Vision & Strategy). All vehicle manufactured at GM's Shanghai facility contains a catalytic converter that only functions on unleaded fuel (Vision & Strategy).
As it pertains specifically to the company's plants GM is committed to the conservation of resources. In fact GM has established a "non-product output goals, i.e., reducing the amount of waste materials not incorporated into the final product. This places the focus directly on the product and the conservation of materials, and results in economic, environmental, and social benefits. GM has also set aggressive goals to reduce energy and water usage at its manufacturing facilities (Vision & Strategy)." The company also create a worldwide health and safety initiative in 1995 (Vision & Strategy). This initiative has been instrumental in decreasing levels and illness and injury amongst GM employees (Vision & Strategy).
Leadership and management
As it pertains to leadership and management GM has a rather complex system as a result of the size of the company and the nature of the products that the company manufactures. The governing body for the organization is the Public policy Center. According to the "Vice President, Environment and Energy and Chief Environmental Officer; Vice President, Corporate Relations and Diversity; Vice President, Government Relations; and Chief Economist lead the Public Policy Center and report directly to the GM Vice-Chairman (Management Structure) ."
The chart below (taken from "Management Structure") depicts the organizational structure at GM. GM is a large company and as such the organizational structure is rather complex. The board of directors and the automotive strategy board are responsible overseeing the entire company which is broken divided further into four regional boards: 1. North America, 2. Europe, 3. Latin America, Africa and Middle East 4. Asia Pacific
General Motors is committed to developing and implementing certain initiatives that are designed to make the company more efficient and profitable. One the ways in which the company accomplishes this is through the Public Policy Committee of the GM Board of Directors which can be found in the structure above. The committee serves the purpose of pursuing GM's pledge to carryout its global business in a ways conducive with meeting the needs of the shifting demands of various markets (Management Structure). The Committee is responsible for several areas including
"research and development, automotive safety, environment, diversity, health care, trade, corporate social responsibility, and economic development . The
Committee provides public policy guidance to management in order to support
GM's progress in growing the business globally within the framework of GM's core values (Management Structure)."
Grouping and Teamwork
Teamwork is also a strategy that GM employs. The company recognizes that synergy is rather important (Management Structure). To this end, throughout the company there is a cross-functional team concept which is encouraged by GM's Public Policy Center (Management Structure). This functional team concept involves a series of cross-sector teams that are formed to deal with specific policy issues (Management Structure). The organizational structure found in the report demonstrates the four centers of expertise around which the Public Policy Center is arranged (Management Structure). All of the four centers have an area of expertise for which it is responsible for different issues (Management Structure).
In addition to this type of teamwork the company also engages teams amongst lower level employees. These team exists in every sphere of the corporation and are needed to ensure that the goals of the company are met. Teamwork is one of the most comprehensive ways that a company can meet its strategic goals in a timely manner.
According to General Motors the corporate culture is one that has as a foundation mutual respect, inclusion, understanding and responsibility (Around the World).. However, outsiders and some previous employees ague that the corporate culture at GM is a major problem that has contributed to the demise of the once prosperous company. According to Krolicki (2009) "What GM needs…is a…