Thinking Strategically - Gm

There were several factors that adversely affected American auto industry. One factor was the Generation Y’s changing ideas, values and attitudes. Daft has mentioned that this generation is one of the more educated generation in the US history and are more technologically savvy and globally conscious. Environmental issues resulted in steep competition from Toyota. A huge economic force was the international mortgage crisis that resulted in the industry’s worst sales slump since 9/11. This greatly contributed to stupefying quarterly losses and ballooning debt. Our dependence on foreign oil has led to soaring energy prices, which forced GM’s management to abandon its super-sized models like the Hummer.

Management perspectives and practices need to be fluid in order to positively respond to changing social, political, and economic forces present in society. GM managers must deliver breakthrough ideas to charm customers back and provide fantastic, reliable products to maintain customers.

A combination of administrative and humanistic perspectives made GM into a powerhouse in the early twentieth century. It was Alfred P. Sloan, the fabled leader of GM from 1923 to 1956, who centralized administration and decentralized production while appointing an executive with complete authority over his unit. Centralization of administration proved cost-effective and increased communication and coordination between units. This also gave the organization cohesiveness. Decentralization gave GM the necessary qualities to adapt to new conditions; initiatives, responsibility, development of personnel, and decision close to facts. Sloan also recognized that well-qualified and competent managers contributed to GM’s successes. He put together a group of talented leaders, engineers, and craftsmen, and gave them a great degree of autonomy. Also employee motivation was enhanced with incentive programs and shareholding interests. Sloan’s managerial technique made GM a huge automotive industry, by 1970s GM was the largest car manufacturer in the world and the company’s share of the American market was over 45%--more than doubled from 18% in 1923 when Sloan took over as president of GM (Alfred Sloan: President of General Motors, 1999).

GM faces numerous obstacles as it attempts