Strategic management principles and practice

Strategic Management

Characterize GM's commitment to the environment.

From a historical perspective, GM's commitment to the environment seems highly pragmatic in nature. Before it was 'bailed out' by the federal government, GM had a reputation for being the least environmentally-conscious of all of the major automobile companies. Today, GM promotes the fact that its U.S. sales of vehicles that get over 30 mpg are booming. This is part of GM's new image for the 21st century, in contrast to its emphasis on SUVs and large trucks in the previous decade, when it was lurching towards bankruptcy and plagued by labor issues.

GM is in pursuit of a zero-landfill goal and makes use of solar power at its facilities. As well as good PR, its new initiative could produce cost savings for the company in the future. An emphasis on fuel-efficient vehicles is salutary for GM because the price of gas is always unstable, and if gas skyrockets in cost, consumers will want smaller and more fuel-efficient vehicles. Toyota out-maneuvered GM with its creation of the Prius, which became very popular after the price of gas began to increase dramatically. GM does not want to be taken by surprise again, and wants to craft itself with a more innovative public image than its Japanese rival.

Q 2. Do you think this commitment will offset the environmental issues with fuel economy and greenhouse gas emissions? Provide support for your opinion.

Unfortunately, changing driving patterns alone will not circumvent all of the problems caused by global warming. The world will fundamentally have to change the way it lives, including the way it eats. More so than changing their driving habits, according to Mark Bittman of The New York Times "2.2 pounds of beef is responsible for the equivalent amount of carbon dioxide emitted by the average European car every 155 miles" (Bittman 2008). Bittman suggests that meat consumption has a heavier carbon footprint than driving fuel-inefficient vehicles. This is not to minimize the importance of changing the types of vehicles American drives, but to contextualize the fact that changing fuel efficiency standards is only a small part of the fight against global warming. However, GM's sustainability initiatives should be commended, even if they are not panaceas.

Q3. What are GM's real strategic reasons for these environmental initiatives?

The Obama Administration has placed a strong emphasis on green technology as a way for America to revitalize its economic future. As a condition of its bankruptcy proceedings, GM was forced to divest itself of some of its least-profitable brands, including its massive Hummer vehicles. It began to promote the Chevrolet Volt, a vehicle that was even more fuel-efficient than the Toyota Prius and far closer in design to the purely electric cars that are the ultimate dream of most environmentalists than the Prius. The small Chevrolet Cruze and even smaller Spark will attempt to rival cars such as the Camry and Civic (Motavalli 2009).