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The home of the Buick, Cadillac, GMC and Chevrolet; General Motors has been a household name; a leader for the automobile industry since its creation in 1908. In February of 2014 General Motors Corporation (GM) recalled 2.6 million vehicles due to an ignition switch defect that was responsible for at least 13 deaths. The recall would have already been devastating for GM, but it was made significantly worse when it was discovered that some GM employees had known of the trouble for more than a decade. (Sheridan, 2014). A culture that lacks responsibility and has made it a habit of looking away from the problem instead of fixing it. This case study shows us a real look into GM’s company culture, A culture that lacks responsibility and has made it a habit of looking away from the problem instead of fixing. This case points out that the recall itself was a direct result of General Motors corporate culture that would not tolerate any sort of acknowledgment of the corporation’s flaws and problems. In January of 2014, Jenner and Block released the results of an independent investigation that was conducted on the GM ignition switch recall. The report stated the following key problems:
- The problem with the ignition process and GM personnel’s inability to address it were just one part of a history of failures from the company.
- The fact that nobody took responsibility for the problem although every employee who was aware of the problem had the chance and the responsibility to fix it.
- Not one employee had any sort of sense of urgency, to address the issue.
- Although the problem was discussed with the General Motors engineers, investigators, and lawyers, it was never brought to the attention of the highest levels of the company. (Valukas, 2014)
The Valukas report points out that there were many conflicting messages from the management: “When safety is at issue, cost is irrelevant” and “Cost is everything.” (Sheridan, 2014) The direct result of these contradicting messages caused a culture within General Motors that made it seem unacceptable to bring any attention to issues or problems that may arise. Bill McAleer, a former GM manager described the culture as being one where employees were told that “you get fired if you do talk about quality and safety issues, and you get fired if you don’t talk about them.” (Sheridan, 2014) Adding to the problem, there was never a clear process for determining whom should be the decision-maker on the issues that were brought to attention and there are rarely and meeting that had the minutes kept. The report found, that in the case of the ignition switch defect, when the issue was brought to the attention of upper management, it had to be evaluated through “an astonishing number of committees” (Sheridan, 2014) and that the proposed solutions then died within the groups that were supposed to be exploring the issue.
In January 2014, Mary Barra, the Chairman and CEO of General Motors Company was brought in to answer some questions on the incident. She publicly noted “a phenomenon known as the ‘GM Nod’…when everyone nods agreement to a proposed plan of action, but then leaves the room with no intention to follow through, and the nod is an empty gesture.” (Sheridan, 2014) Much as in the Custodial Model, GM managers were authoritarian with the employees in turn oriented towards obedience and dependence on the managers. The employees need that are met is that of security and subsistence but there is little independent decision making or responsibility taken. This combined with passive cooperation gave the company minimal performance results. Mary Berra implemented changes to restructure the corporate culture within General motors so as to move in a way that was towards a Supportive Model, where managers are striving to support and encourage the employees. The employees would then be motivated towards bettering their job performance and becoming active participants in the success of General Motors. She then promoted the General Motors image both internally and externally as a leader whom, despite the challenges would still continue to be the strongest and best positioned business in the automotive transportation industry. In direct response to the recall, Mary Barra then instituted a program to help encourage employees to report any and all potential safety issues; added 35 safety investigators as well as a new Global Product Integrity organization. She also restructured the safety decision-making process while making it a requirement that senior management was involved in all the decisions that would be made from there on in. Since then, she has implemented a yearlong course in “transformational leadership” for senior executives, and leads various two-day retreats, that are not focused on strategy but on executive interactions. As HR chief, John Quattrone puts it “Mary believes that if we change the behaviors [of top managers], people who work for us will see that and emulate it.” and thus avoid the dysfunction that was prevalent in the past. (Tetzeli, 2016)
Mary Barra has worked very hard to nurture and bring a corporate model to General motors that is more sensitive to its customers, more decisive, focused, and responsible than ever before. (Barra, 2017) While this Custodial Model of a corporate culture is a decent starting point, its natural evolution should be into a Collegial Model, where there is a sense of common purpose shared throughout the corporation. This requires management to create and nurture a partnership with their employees, and it is vital that management receive consistent ongoing training in fostering such an environment of teamwork. Employees who perceive managers as joint contributors to organizational success rather than just as bosses are more likely to feel important and needed throughout their time with the organization. Employees should also have a part in determining team goals and standards as this feeling of responsibility will encourage self-discipline among them.
Since the industrial revolution, in the automotive industries, an autocratic corporate culture model has been successful. It gave the owners and manager’s the power needed to dictate and form decisions and the employee’s sole duty was to listen and obey those orders. As vehicles have become more technologically advanced, the workforce has also evolved, and with it a corporations need for changing the corporate culture. Mercedes-Benz surveyed its employees and found that almost 40 percent “felt disengaged throughout the work day” this facilitated the company launching a development and immersion program which connected their employees with the brand mission. (Aquino, 2015) Even with GM doubling its earnings in June of 2016, Mary Barra admits that GM’s 223,000 employees have had to learn to behave differently in order to succeed. The culture of blame and bureaucracy is slowly being replaced with one driven by accountability, and collaboration.
- Aquino, J. (2015, January 26). Looking Under the Hood of Automotive’s Corporate Culture. Retrieved from 1 to 1 media: http://www.1to1media.com/employee-engagement-strategies/looking-under-hood-automotives-corporate-culture
- Barra, M. (2017, June 18). GM Leader Drives Cultural Change, Innovation and Results. Retrieved from Electrical Trends: http://www.electricaltrends.com/2017/06/gm-leader-drives-cultural-change-innovation-and-results.html
- Kuppler, T. (2014, June 8). The GM Culture Crisis: what leaders must learn from this culture case study. Retrieved from Work that Matters: http://switchandshift.com/the-gm-culture-crisis
- Newstrom, J. D. (1993). Organizational behavior: Human behavior at work. New York: McGraw-Hill.
- Sheridan, P. M. (2014, June 28). GM’s ‘culture’ blamed for current crisis. Retrieved from CNN Money: http://money.cnn.com/2014/06/28/news/companies/gm-smerconish/index.html
- Shethna, J. (2016, May 12). Best 5 Organizational Behavior Model. Retrieved from educba: https://www.educba.com/organizational-behavior-model/
- Tetzeli, R. (2016, November). Mary Barra Is Remaking GM’s Culture—And the Company Itself. Retrieved from Fast Company: https://www.fastcompany.com/3064064/mary-barra-is-remaking-gms-culture-and-the-company-itself
- Valukas, A. R. (2014). Report to the Board of Directors of General Motors Company Regaurding Ignition switch Recalls. Jenner and Block.
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