Genetic modification concepts and applications

General Motors

In order to determine the best set of alternatives for General Motors, the issues facing the company must be prioritized. Now that the company has swapped out its pension obligations to the UAW for an equity stake in the post-bankruptcy version of the company (Shepardson & Aguilar, 2009), legacy costs are no longer the most pressing priority. The company can now proceed with making the necessary improvements to its business.

The first alternative is to move forward quickly with restructuring the business. This will require the company to immediately cut or sell off underperforming brands, slash its workforce and re-focus the company on hybrid technology. The assumption is that the existing management team, under company man and new CEO Fritz Henderson (Moore, 2009), is capable to making the necessary financial and operational changes needed to turn the company around. This alternative will allow GM to catch up to their competitors in the hybrid segment and operate a leaner company in general. There is the risk, however, that this solution is a short-term fix. The issues with respect to culture and accountability will still remain. The view is that these problems will take years to properly address and in the meantime, the company still needs to be competitive. This option is favored by the existing management team and the Obama administration, which put the new CEO in place and has significant influence over this administration's decisions. It is believed that the union prefers this option as well, as they are part of the existing power structure at GM and would be opposed to a new management team that may not recognize the sacrifices they have made.

The second alternative is to prioritize cultural and creative change at General Motors. This alternative takes the view that the existing management team, being comprised of GM insiders, is incapable of truly transforming the organization. The decision-making process is notoriously slow and management ranks bloated (AP, 2009) and federal government ownership and oversight will only make that situation worse. Thus, the first priority will be to infuse the company with new executive blood. These new executives will be experienced in major corporate turnarounds. They will place emphasis on changing the corporate culture and instilling accountability into the organization first, on thinning the executive ranks and on streamlining the decision-making process. Only once this has been completed will they set to work transforming the market and operational focus on the company. This option will not allow GM to catch up in hybrids right away, but will position the company for better performance over the long run. Although some external players, such as potential new executives, may prefer this plan, there is little evidence that the major stakeholders have interest in major culture change.

The third alternative is to place emphasis on operational issues first and foremost. Under terms of its new deal with the UAW, GM will be closing plants and shedding workers, and it is trying to sell off some of its underperforming units (Hummer, Opel, Saab, Saturn and Vauxhall). This alternative thus places less emphasis on market and corporate transformation and more on making the company truly leaner but reducing supply chain inefficiencies. This will also allow them to focus marketing efforts on their core brands, which will help them recapture some of the market share they have lost in recent years. This option assumes that dealing with legacy issues was just the first step to improving the company's finances, that culture change is not going to be as effective as operational changes and that a switch to a more market-driven product line cannot genuinely occur if the company does not have greater control over its supply chain. The company's dealer and supplier networks likely prefer this option. The supply chain, many constituents of which have struggled, will be more engaged in GM's future and the dealers will see the benefit of increased focus on core brands.