Gm Motors Case Study
CASE STUDY REPORT
The decisions and culture leading to the fall of General Motors
CONTENTS
EXECUTIVE SUMMARY………………………………………………………….iii 1. INTRODUCTION…………………………………………………………..4 2. EXTERNAL FACTORS IN DECISION MAKING……………………….4-5 3. BOUNDED RATIONALITY……………………………………………….5-7 4. BUSINESS CULTURE…………………………………………………...7 a. The Power-Distance Relationship……………………………...7 b. Uncertainty Approach……………………………………………8 5. THE CONFORMITY APPROACH……………………………………...8-9 6. CONCLUSION……………………………………………………………9 7. RECCOMENDATIONS…………………………………………………..9-11 c. Sharing the Power………………………………………………..10 d. Encouraging diversity of approach……………………………..10 e. Develop participative management skills………………………11
REFERENCE LIST……………………………………………………………….12
Executive Summary
This report looks the decision making process within General Motors and the constraints faced from the external environment and the internal self created bounded rationality.
The General Motors reward system created a bias and tuned discussion towards confirmation of one man’s decisions. The bias bounded rationality where the views of others, in particular conflicting views were not heard, discussed or evaluated. This led to decision making that was removed from reality and not driven by market demand.
The culture at General Motors was toxic and self created by the reward structure. Avoidance of uncertainty and reduction in conflicts in decisions were paramount for an employee to advance within the company. The business adopted a conformity approach which reduced vital discussion and further bounded the rationality of future decision making.
The first step in bringing General Motors back to profitability is to change the culture through empowerment of its employees. The first steps of empowerment for General Motors is the inclusion of variety of viewpoints in the decision processes, allowing employees to make changes to increase their own efficiencies and
The decisions and culture leading to the fall of General Motors
CONTENTS
EXECUTIVE SUMMARY………………………………………………………….iii 1. INTRODUCTION…………………………………………………………..4 2. EXTERNAL FACTORS IN DECISION MAKING……………………….4-5 3. BOUNDED RATIONALITY……………………………………………….5-7 4. BUSINESS CULTURE…………………………………………………...7 a. The Power-Distance Relationship……………………………...7 b. Uncertainty Approach……………………………………………8 5. THE CONFORMITY APPROACH……………………………………...8-9 6. CONCLUSION……………………………………………………………9 7. RECCOMENDATIONS…………………………………………………..9-11 c. Sharing the Power………………………………………………..10 d. Encouraging diversity of approach……………………………..10 e. Develop participative management skills………………………11
REFERENCE LIST……………………………………………………………….12
Executive Summary
This report looks the decision making process within General Motors and the constraints faced from the external environment and the internal self created bounded rationality.
The General Motors reward system created a bias and tuned discussion towards confirmation of one man’s decisions. The bias bounded rationality where the views of others, in particular conflicting views were not heard, discussed or evaluated. This led to decision making that was removed from reality and not driven by market demand.
The culture at General Motors was toxic and self created by the reward structure. Avoidance of uncertainty and reduction in conflicts in decisions were paramount for an employee to advance within the company. The business adopted a conformity approach which reduced vital discussion and further bounded the rationality of future decision making.
The first step in bringing General Motors back to profitability is to change the culture through empowerment of its employees. The first steps of empowerment for General Motors is the inclusion of variety of viewpoints in the decision processes, allowing employees to make changes to increase their own efficiencies and