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Posted on September 4th, 2012, by

GM is one of the largest automobile manufacturers in the world. In fact, until 2008, GM was the largest automobile manufacturer in the world and it is not last years it was ranked second after Toyota. However, such a deterioration of the position of GM was determined by objective factors and the decreasing competitive power of GM. In order to improve its current position and avoid bankruptcy, GM needs structural changes which should affect not only the production process proper but also organizational structure and performance. In this respect, the introduction of technological innovations is crucial for the recovery of GM and its further progress as the world’s leader in the automobile industry. In fact, the development of new, fuel-efficient cars is one of the major strategic goals of the company, which though needs consistent organizational changes. Obviously, organizational changes would back up technological changes and, what is more important, without organizational changes the company will not be able to imply technological innovations efficiently.

Basically, the current position of GM forces the company to launch organizational changes prior to technological changes. In this respect, job cuts are considered to be the most efficient way of the reduction of costs of the company. In such a way, the company attempts to save costs for the technological reconstruction of its production. However, it is important to remember that job cuts lead to dramatic organizational changes, which may be extremely dangerous, especially in the context of technological renovation of the company. To put it more precisely, the company should apply the strategy of job cuts very carefully because, at the moment, GM cannot lose well-qualified professionals, especially creative employees, who can offer original solutions and introduce innovations which can improve the competitive position of GM consistently.

The company has a huge intellectual potential and it cannot get rid of well-qualified engineers, designers and other employees who can not only produce new, fuel-efficient cars, but they can develop new technologies, which can make the company’s cars more efficient. Today, the company needs to create a special unit, which can work specifically on the development of fuel-efficient cars that means that the company needs the organizational restructuring. Normally, the company’s employees worked on specific models and teams were entirely focused on the production of their own model. However, the introduction of fuel-efficient cars implies the introduction of a new technology that could be applied to all cars produced by the company. In other words, the company needs a team which can work on the development and practical implementation of such a technology. For instance, it can be new engines, or new elements of the transmission, and many other elements which the team should take into consideration. Therefore, the team should become a kind of brain, an intellectual core of the company which generates new ideas and develops ways to their practical implementation. In this respect, it should be said that specialists, who have already extensive experience of work on fuel-efficient cars, can be particularly helpful for this team and they should be transferred from all the units of the company into this team.

At the same time, GM will also need to change its marketing strategy substantially that will naturally involve the organizational restructuring of units working on the marketing strategies of the company. To put it more precisely, the company was traditionally oriented on the American market as the target market, but, today, the US market is stagnating, while the existing model of GM’s cars, being not as fuel-efficient as cars of its competitors, are not very popular abroad. Consequently, after the introduction of new fuel-efficient cars the company will need to strengthen its position on foreign markets. This means that the company should develop its units abroad and transfer marketing specialists to the countries where GM can strengthen its position consistently. Obviously, the transfer of specialists abroad will need significant reorganization.

In addition, the transfer of American specialists abroad will also need their adaptation to the new cultural environment. Otherwise, cultural differences between American specialists and local ones will undermine the organizational culture and the company will not be able to function efficiently. In such a situation, the company may need to involve a larger number of local specialists, who are acquainted with local culture and traditions. The employment of local professionals abroad can save costs, especially if the company enters the market of a developing country, because the level of wages of American specialists is often higher than foreign ones.

Finally, the company will need to organize training for its specialists in order to make them able to construct new, fuel-efficient cars and test them to avoid the risk of complaints from the part of customers. This means that GM will need to organize training courses for its employees. In such a way, it will be possible to introduce new technologies fast and with minimal losses because employees will come prepared to the construction of new, fuel-efficient cars.

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