Question

Of the many important dates in automotive history, September 16, 2008, marks both the end of an era and a bold new beginning. On that historic Tuesday, eager crowds packed the Renaissance Center in Detroit, Michigan, to celebrate a once-in-a-lifetime event: the 100-year anniversary of General Motors (GM).

Following months of centennial-themed pageantry and parades, the American automaker’s towering headquarters had taken on a museumlike aura. On the ground floor sat immaculate showroom classics from the company’s fabled past: an orange 1963 Corvette Sting Ray, a pistachio 1952 Saab, a shiny black 1955 Chevrolet Bel Air coupe, an apple-green 1973 Opel GT. Auto enthusiasts, reporters, and GM employees alike gazed nostalgically on the rows of vintage cars as the clock turned back to a glorious, bygone era in America’s history.

Despite the irresistible charm projected by these solid-steel visitors from GM’s legendary past, it was a concept vehicle from the company’s future that had the crowd’s engines revving on the main floor. For years, management at GM had talked of introducing alternative-energy models that excite consumers and protect the environment. Now, at this momentous celebration, the talk was over, and GM pulled back the curtain on what it says is the future of the auto industry: the Chevy Volt.

With its aerodynamic design and 40 miles of emissions-free driving on a single electric charge, GM’s first-ever plug-in electric vehicle is a far cry from the gas-guzzling trucks and SUVs that delivered the company’s greatest financial successes in recent decades. Indeed, the Volt represents a sea change for the world’s largest auto manufacturer. Unlike hybrids that use electric power to improve the mileage of their gasoline engines, the Volt uses a gasoline generator to assist the range of its battery-powered electric drive unit. According to GM, driving the Volt will save owners $1,500 annually in energy costs. It’s no wonder company officials cite the concept as proof of GM’s intention to lead the reinvention of the automobile.

But the arrival of the Volt comes at a pivotal moment in GM’s history. Ripple effects from an international mortgage crisis in 2008 triggered the industry’s worst sales slump since 9/11. Soaring energy prices in the same period forced management to abandon Hummer and other super-sized models that once represented hope for a financial recovery. But the list goes on. GM also faces slumping shares, stupefying quarterly losses, ballooning debt, steep competition from Toyota, precarious dealings with labor unions, and almost insurmountable fuel-efficiency regulations from the federal government.

If history is any indication, GM will tackle these challenges head on, displaying the same innovative spirit that gave the business its first 100 years of manufacturing excellence. Since its founding in 1908, the automaker has repeatedly demonstrated its strong capacity for innovation and change. From speedometers (1901 Oldsmobile) and electric headlights (1909 Cadillac) to automatic transmissions (1940 Oldsmobile) and mass-produced V-8 engines (1914 Cadillac), GM teams have given the world hundreds of innovative firsts.

Whether it’s big-idea concepts that reshape the future or smaller innovations that improve existing products, CEO Rick Wagoner and his management teams are developing the strategies that will guide the company successfully for the next 100 years. In his speech introducing the Volt’s historic unveiling, Wagoner underscored the remarkable times in which we are living. “GM’s centennial comes at an incredible time in our industry. The entire world is watching, hoping for a breakthrough in personal transportation that will address the very real energy and environmental challenges facing the globe.”

The stakes have never been higher. If GM is to avoid becoming a museum of America’s great automobile manufacturing past, management must deliver breakthrough ideas that once again stoke consumers’ passions. With the Chevy Volt in production and a large cache of renowned brands including Cadillac, Chevrolet, Pontiac, and Saturn, there is every reason to believe GM will succeed.

Questions

1. Identify and explain three management functions that GM performed in the case. Make reference to the case.

2. Identify the four macro external environmental forces that affect the auto industry and the practice of management at GM. Make reference to the case.

3. Identify and explain how four principles of management espoused by Fayol, contributed to the story of GM.

Answer 1

ANSWERS-

Answer-1.

The three management functions that GM acted for this situation are as per the following -

1-) Planning - Senior management in the organization including CEO Wagoner , has arranged and building up the strategies which will control the organization for the following 100 years. It is in a perfect world the initial step where the organization thinks for the future, choose what will the crucial vision and plan the strategies which will bolster the business.

2-) Directing - Management in the organization has consistently guided their Employees what they need to accomplish. For GM , it has been innovating alternative vitality model vehicles which can be an innovator in the market and additionally secure condition. In this way, management has had a review and guided the organization towards a path.

3-) Controlling - As volt is propelled in when GM has balloning obligation and solid rivalry. Thus, management functions to control costs and eliminate any sorts of wastage to continue.

Answer-2) The four macro environmental forces which affects are-

1-) Economical components Sale of automotives relies upon how the Economy is performing . On the off chance that the economy is turning sour numerous individuals wont have a lot of extra cash to spend on vehicles.

2-) Technological elements - Technology innovations affect the automobile industry and just as the Management in GM . As, if the opposition is technologicaly innovative and is delivering better outcome while GM is as yet following the customary techniques, the organization will neglect to endure.

3-) Environmental variables - It is critical that GM thinnks about the earth also. So the Management propelled the Volt since individuals are getting progressively cognizant about what is useful for condition and they need vehicles which is more eco amicable.

4-) Legal components - It is significant that the organization see what lawful methods needs to he followed. This especially must be finished by the management of the organization before discharging any vehicle.

Answer-3) The four principles which contributed are

1-) Discipline - Discipline was there in GM. Representatives were consistently faithful to follow arranges and have respectfull conversations inside the organization ,then no one but GM could have conveyed such a large number of incredible vehicles.

2-) Subordination of Personal interests - It implies that in close to home interests of Employees were consistently optional to essential interests of the organization.

3-) Remenuration-It implies Employees must be appropriately remenurated then just they will be glad to innovate.

4-) Equity - Employees must be treated similarly. There ought to be no discrimination then just the organization will have the option to perform.

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