Accounting For Faulty Ignition Switches At General Motors Company Case Study Analysis


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Accounting For Faulty Ignition Switches At General Motors Company Case Study Solution

Background and Facts

Accounting For Faulty Ignition Switches At General Motors Company an office supplies store for small and average sized organisations has recently been associated with preparing for a merger with its competitor Home Deport, which has actually impacted performance levels in departmentswith the senior manager involved in lawful issues presented by the government Profession Payment. With the Marketing Head advancing the news of his departure from the firm in one year, Jeannie Lewis, the existing head of operations has actually been asked to take the duty in the near future. With challenges in the kind of a prospective cultural modification as well as low staff member spirits, the company requires a complete reengineering effort at the marketing department.

Problem Statement
Porter's 5 Forces Analysis
The potential social modification at the advertising and marketing department of Accounting For Faulty Ignition Switches At General Motors Company is raising unpredictability in the workplace resulting in numerous difficulties for the Jeannie Lewis that would certainly be replacing the head of the department in one year. nalysis

PEST analysis

Political Factors: Political factors play a significant role in impacting strategic decisions because Stapes Inc. needed to abandon its plans of combining with Workplace Deport after the Federal Trade Payment's intervention while doing so. Given the truth that the store has a worldwide existence with branches in UK, USA, Canada as well as Germany, political consider each of these countries may have the ability to impact performance or critical goals. Federal Profession Payment's antitrust fit versus the merger used up valuable time of the company's senior management suggesting that 'political' factors can have significant effects for an international service.

Economic Factors: Economic factors such as the emergence of local business in the global situation recommend that Accounting For Faulty Ignition Switches At General Motors Company is prospering in an atmosphere where there is possible development of services. In addition to this, reality that store clients are mostly looking for office supplies for office suggests that the market has a climbing trend of business owners as well as home based organisations.

Social factors: Social patterns in the economic climate show that customers are searching for comfort in addition to attractive costs. Market research shows how the customer for Accounting For Faulty Ignition Switches At General Motors Company does not have recognition about discovering remedies which can supply a mix of comfort as well as low costs.

Technical factors: Modern technology plays an important duty in Accounting For Faulty Ignition Switches At General Motors Company's company technique particularly as the organization is piloting Innovation facilities which would certainly use technology sales and support in the kind of memory upgrades, outer installations. (Summary of BUG in appendix 2).

OB Issues and Manifestations.

Several underlying Business Habits issues can be seen in Accounting For Faulty Ignition Switches At General Motors Company's case as highlighted in this section.

Worries regarding cultural adjustment: There is concern regarding a cultural modification that would take place once Todd Krasnow leaves from his setting as the Exec Vice Head Of State of Advertising And Marketing with a lot of the team member currently showing unhappiness over this potential move. This expected modification has actually created stress and anxiety in the work environment which has been combined with the previous stress and anxiety of preparing the company for a possible merging with House Deport.
Pest Analysis
Difficult Task Atmosphere for Newcomers: There is shortage of workers that can match the stressful environment of a busy organization. Not only does this result in problem in discovering the ideal people, it places tension on brand-new hires as can not stand up to the speed and also pressure that the organization anticipates them to birth.

Double Reporting Lines: Beginners locate this business culture difficult and also difficult to manage specifically as populated line relationships are indicated to be weaker in general as well as unbiased setting as well as efficiency analysis is still done by the solid line manager. This suggests that newcomers might lose clarity concerning their respective duties and objectives especially as dotted line coverage does not keep them in straight communication with the strong line supervisors.

Resentment From Cross Departmental Hiring: Krasnow's choice to make Lewis his follower instead of Bridget Coles even though it had actually been hypothesized that the last would certainly take Krasnow's placement came as a blow to her morale. Lewis might have been capable and proper for the work yet the fact that Kransnow's separation would make Coles a straight report to Lewis may have been the factor for Coles' resignation from solutions.

Concern & Job Instability: Worry and instability can be recognized as 2 major issues that Lewis would certainly be dealing with specifically as the merger has currently be terminated and also two senior execs of the advertising and marketing division would certainly be leaving. The whole responsibility of the department would be dropping on Lewis's shoulders who would not just supervise of brining concerning a cultural adjustment yet would certainly also have to show herself in her brand-new function.

Inappropriate Management Style of Leader: Lewis's monitoring style and its incompatibility with the marketing division's duty can likewise be seen as an OB difficulty specifically as she has been utilized to dealing with issues in the procedures department where workers are educated to concentrate on procedures and also get them. The advertising and marketing division on the other hand can be seen as a group of individuals who are made use of to being nurtured by Krasnow who concentrated a lot more on outcome than processes.

Interdepartmental Disagreements: Interdepartmental arguments between three departments, advertising, merchandizing as well as operations respectively over the allowance of the advertising mix can be determined as another OB problem. The marketing division does not share the exact same vision as the other 2 departments concerning the aloocation of the advertising mix twoards promos as well as advertsing, the merchandizing and operations divisions do not agree over the advertising and marketing mix allowance amongst one an additional either.

Fragmentation in Advertising Division: Fragmentation between the marketing and advertising divisions can be recognized as an additional OB issue which can require further attention. The fact that the advertising and marketing areas in the advertising and marketing division are disconnected is avoiding both divisions from acquiring from each other's experience and also competence. Assimilation of advertising and marketing with merchandising and also operations would certainly become more difficult if the advertising department itself is broken down which can be one more potential OB issue.

Accounting For Faulty Ignition Switches At General Motors Company Analysis

Numerous theories have actually been utilized to discuss the circumstances to obtain more quality regarding the circumstance at hand.
Swot Analysis
McGregor's Theory X & Y: According to Douglas McGregor's Theory X, many supervisors think that juniors are passive and lazy, have little aspiration as well as resist modification. The hard version of this concept emphasized threat, limited controls, risks and punishments. Gradually it creates reduced efficiency, subtle sabotage and also competition (Bargain, 2003). The scenario at Accounting For Faulty Ignition Switches At General Motors Company is not totally adhering to Theory X, it can be seen that new hires are locating this environment rather demanding which may at some point lead to a better inclination of the monitoring in the direction of Theory X. According to McGregor's advocated view, which he called Theory Y, the essential job of the monitoring is to organize organizational conditions so that people can achieve their own objectives best by routing their initiatives towards business benefits. If individuals find no satisfaction in their work, the management would have little option but to rely upon concept X and outside control (Deal, 2003). Also while assessing Lewis's administration style, theory X might have been suitable in the operations division somewhat however the Advertising and marketing department would require dependence on Theory Y in order to get the creative thinking and also originality from the groups.

Tuckman's Teamwork Theory: As much as Lewis's issue about bringing consistency between the advertising and also advertising and marketing department is concerned, this would originally lead to conflict as talked about by Bruce Tuckman in his 'Teamwork Theory'. By combining the advertising and marketing as well as advertising department's work, there may be the same preliminary detach which could lead to the second stage of 'storming' where the teams test one another.

Bridges' Change Design: As per William Bridge's theory (appendix 4), people are rather uneasy with adjustment, which is obvious by the scenario at Accounting For Faulty Ignition Switches At General Motors Company The situation can be viewed as a typical program of life if is researched based on Bridge's theory where he clarifies that people experience three phases of shift when they experience adjustment. 'Ending, losing and also Releasing', The Neutral Area and 'The New Starting' (Bridges, 2004). When people exist with modification, they get in phase one and so there might be feelings like despair, uncertainty, frustration, temper, worry, rejection and also disorientation.The circumstance at the advertising division of Accounting For Faulty Ignition Switches At General Motors Company is similar so Lewis can obtain comfortable with the suggestion that it is not extraordinary actions. In the second phase, there might be a need to bridge the gap in between the new and old society so Lewis may need to encounter this experience once Krasnow leaves. There may be low spirits and also reduced performance at this phase which should not be taken as a trouble. It is throughout this stage that Lewis will certainly need to offer support to the department so that they can find a sense of direction. It can be seen how Krasnow has currently made this change simpler by making Lewis get involved in the department a year before his actual departure. Based on Bridges' Model, stage three will bring about openness to learning, High power as well as commitment as individuals will certainly welcome the adjustment (Bridges, 2004).
Vrio Analysis
Maslow's Demand pecking order: The OB issue pertaining to insecurity at the work environment has been activated firstly by the change in monitoring and secondly by the fact that the merging will no longer be launched. Abraham Maslow in his Theory of 'Needs Power structure' (appendix 5) has discusses the relevance of 'safety needs as being a lower degree need of a human for setting off inspiration. As seen in the pyramid shared in appendix 3, we can see exactly how 'the need to really feel safe and secure and also unharmed' goes to the 2nd level of needs. Prior to a worker can be made to develop mentally, he requires to have his 'Physical 'as well as 'Safety and security' needs satisfied. This indicates that unless the employees are made to really feel safe regarding their current work standing in Accounting For Faulty Ignition Switches At General Motors Company they may not get to 'Self-Fulfillment'. (King, 2009).

SWOT Analysis for Accounting For Faulty Ignition Switches At General Motors Company Case Study

Ramification of Analysis.

The OB analysis has checked out numerous theories to comprehend how to deal with the present scenario available. The following three choices have been recommended to help Lewis take care of the business challenges in the marketing division. Each of these options has been recommended for easing the change required to bring the advertising and marketing division in accordance with the requirements of the market and for making the cultural modification that would certainly follow once the present leader leaves.

Combination of marketing and advertising features. Dividing Adverting and also Production features. Integration of Advertising with Workflow.

Analysis of Alternatives.

Judith Shapiro that has actually earlier been interviewed by Lewis throughout the earlier merging days has competence in business-to-business advertising along with firm and retail advertising experience. When Krasnow leaves, Lewis can work with Shapiro as an EVP for advertising and marketing to deal with both advertising and marketing and marketing functions.

The advantage of this technique is that it will certainly integrate both features while minimizing the demand for hiring an extra resource for marketing. Along with this, Lewis would certainly be heading the marketing department and also in any case her replacement would certainly be needed for the current function that she is carrying out. The disadvantage of this alternative is that exterior hiring might produce bitterness from internal personnel that may be looking at the position of EVP after Lewis takes over Krasnow's placement.

Separating Adverting as well as Production: Offered the affordable pressures as well as high quality work called for from the advertising company, it is suggested that Lewis should allow the manufacturing system to be a separate feature from the marketing system. Given that a lot of advertising and marketing agencies had these two functions as separate devices, it makes even more sense to comply with the norm.

Combination of Marketing with Procedures: Considering that Lewis is already taking care of the advertising and procedures divisions simultaneously; it makes feeling to incorporate the two features since she has been effectively taking treatment of both ends. The fact that Lewis has to adapt her administration design for the advertising department recommends that these 2 divisions would certainly be culturally varied.


An assessment of the three options indicates that combination of advertising and marketing as well as procedures would certainly not be a possible move due to the vast differences in between the 2 divisions in spite of the reality that presently Lewis is managing both. While separation of the manufacturing function might have been a favorable relocation for the advertising and marketing department, the reality that it would certainly suggest placing a 3rd function under Lewis's wing indicates this need to be prevented.

Action Strategy.
Lewis will take over the duty of EVP Marketing after Krasnow leaves.

Advertising and Marketing functions would certainly be merged.

Judith Shapiro will certainly be hired to take Lewis's area as SVP of advertising and marketing.

Production function will continue to be component of advertising and marketing under advertising feature.

Lewis will divide herself from procedures.

An autonomous leadership style with employee empowerment will be used in advertising and marketing division.

Open up door plan and also emphasis on cross departmental communication will be aimed at getting rid of disharmony.

Backup plan.

If the combination does not exercise as planned, a backup strategy would certainly follow which would certainly divide the manufacturing feature from the advertising and marketing function to lower the lots on the SVP of marketing and advertising. In case Judith Shapiro does not obtain hired, Lewis will be heading the advertising department without an SVP. Because case the production function will most definitely be separated by putting it under an SVP manufacturing.