GM Case Study

Human Resource Planning in Organizations

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Introduction

Many organizations have been faced with serious organizational problems as a result of a poor human resource management system. The General Motors was one of the corporations that failed the corporate cultural test as a result of poor human resource management whereby the human resource plan did not accommodate a good communication system among the employees and the management and also, the employee culture in the working environment. The article uses GM as a case study for evaluating a good human resource plan (Dessler, 2000).

The cultural problem

The General Motors Company was founded by William Durand in 1902 and it engaged in vehicle manufacturing on a large scale. The company developed a culture of buying automobiles reworked them and resold them in the United States, Canada and even much later the market expanded to other parts of the world, about thirty five countries per say (Kanter, 1985). However, the process started raising serious issues whereby technical, production and development issues on automobiles began harming the customers. The number of accidents escalated and a cause of alarm was raised on the mode of manufacturing or rather vehicle production in the company. The larges impact fell on the company in year 2000 during the economic slide whereby were it not for the American government’s intervention the company would have collapsed (Gartman, 1994).

The crisis was blamed on the company’s culture on vehicle production whereby the vehicles were found to have various issues that had huge negative impacts on the customer. In fact, the culture of buying old vehicles and reworking them and finally reselling them was the major cultural problem in production that did not produce vehicles of high quality even though it was a cost effective move for the company (Kanter, 1985). A huge number of GM’s vehicles were involved in serious accidents which were found to be caused by technical and production issues. The defects were trailed to a switch which when bumped or chains hung too heavy on it, caused a malfunction on the engine and the airbags (Dessler, 2000).

In addition, there were serious engine and airbag’s malfunctions resulting to many accidents. As a result, a huge number of compensation claims flooded in and GM had no choice but to make a switch in its production strategies as the claims resulted to huge losses on the company and threatened its collapse (Gartman, 1994). In addition, there was a collapse in the line of communication between the employees and the management as many of them knew of the defects and could not communicate effectively to the management. Therefore, it was not until the management was reorganized that Mary Barra, who was the first female CEO in the company, admitted on the mistakes and advocated for the need to change the corporate company cultures and replace them with new cultural initiatives. Apparently, the ignition design never actually met GM’s specifications and nobody made this known to the senior management (Grieves, 2003).

GM had developed a culture of cover-up among the employees and that of prizing cost at the expense of quality. This is because for over a decade the problem existed and some employees knew but nothing was done about it (Dessler, 2000). A culture of cutting costs, restructuring and even shrinking costs was practiced by GM. A culture of poor communication or rather the reluctance to convey information regarding bad news and this cost the company huge losses, bad reputation and large customer deaths. Therefore, bureaucratic bumbling led to the huge losses and possible cover ups on issues that could have brought extra costs and even the reluctance of the management to fire non-performing employees (Grieves, 2003).

Human resource Strategy on Cultural Change

Apparently, the cultural crisis is a common problem to most large corporations the same as in GM whereby the ignition problem was known by various employees but they could not come forward about it. There is the tendency of employees to create a haven or a comfort zone in their normal daily routine and the phobia of a change or even the in-adaptability to change. Communication was thus paralyzed in the company as executives just nodded on issues in meeting but never really notified the senior executives on the real problems (Grieves, 2003).

Streamlining Communication and Staff Management

A program was set up for safety program whereby employees were encouraged to come up with suggestions for a better ignition and airbag design. The program was set in order to break the barrier that existed between the employees and the executive management in relaying of crucial information (Dessler, 2000). People associated with the ignition scandal were also fired, a new vice president in charge of vehicle safety was appointed and new communication initiatives were launched in order to enhance communication system to avoid another scandal. The victims of all people who had been involved in accidents as a result of GM’s technical fault were compensated. Moreover, a new culture that was safety centric was introduced and the employees embraced it. A culture of an open communication and prompt response was thus created (Gartman, 1994).

Human resource Impact as a result of Cultural change

As an ultimate corporate cultural change, the company resulted to the initiative of producing new cars and trucks while backing it with other important services. The access to spare parts and special services was made easier for customers, accessories were improved, maintenance services, satellite radios such as XM were availed and even an onStar vehicle protection was availed. Interestingly, under Barra’s watch, the revenues of the company rose tremendously and the business expanded to more than thirty five countries with over two hundred and nineteen thousand employees globally. In addition, communication became more streamlined and production improved (Gartman, 1994).

Conclusion

The success was associated by the new cultural changes that were made such as restructuring of the management, the streamlining of the communication system, the evaluation of employee performance and sacking the ones who were underperforming while promoting the ones who deserved it. A re-evaluation on the ignition design was made and a better one designed which saw the company recover from its losses. It was through Barra’s organizational and cultural changes that GM recovered from her poor financial crisis (Grieves, 2003).

References

Dessler, G. (2000). Human resource management. Upper Saddle River, NJ: Prentice Hall.

Grieves, J. (2003). Strategic human resource development. London: Sage Publications.

Gartman, D. (1994). Auto opium: A social history of American automobile design. London: Routledge.

Kanter, R. M. (1985). The change masters: Corporate entrepreneurs at work. London: Unwin Paperbacks.