Organizational Behavior Case Study

ORGANIZATIONAL BEHAVIOR CASE STUDY

1. Give an introduction to the case and elaborate upon the OB topics that are related to the case?

One of the large largest st car manufac manufactur turers ers around around the the world world namely namely Genera Generall Motors (GM) saw their turnover greatly decreases during the past 50 years!

From U.S. automobile market share of nearly 50 percent in the late 1950s, the company was down to under 30 percent by the year 2000.They allowed competitors to steal away customers with new products and this is due to organization cultu culture re.. Probl Problem ems s rega regard rding ing GM's GM's cultu culture re mainl mainly y incl includ ude e different aspects: -

Lack of risk taking and innovation spirit Wash brain brain with with recru recruitm itment ent of of fresh fresh execut executive ivess out of scho school ol - Over-evaluation of the system - lack of communication regarding designers and engineers In the fall of 2001, Robert Lutz, former Chrysler executive has been named as vice chairman by the chief executive of GM Richard Wagoner with  primary task to change GM’s GM’s organizational organizational culture. culture.

2. Describe the “old” GM culture

 The “old” GM culture can be defined as slow, deliberate decis decisio ion n makin making; g; layer layer-u -upon pon-la -laye yerr of hiera hierarc rchy hy;; focu focus s on cost ost-c -cu uttin tting g rat rather her than han on new produ oduct desig esign n; and management-by-committee. The old GM culture was based on set of polices which was focus on cost-cutting rather than on new prod produc uctt design design.. GM was was sell sellin ing g conc concept ept orien oriented ted instead of marketing concept. This organizational culture has lead to cut market share of the company by 20% in less than 50 years. Making money, that was the main idea but we are faci facing ng a fast fastes estt evol evolut utio ion n of the the worl world d and and you you need need to innovate. Innovate or perish that’s the point to keep in mind. GM “old” culture was strong and it’s verifiable with the low percentage of employee turnover and the high number of  people who would like to integr integrate ate the company. company.

3. What specific forces created this culture? Executives believed that the GM system was superior to all others. Top executives were insulated, which resulted in a senior management team that saw the world through similar lenses. Nobody was against the system in the sense that even for recruitment; fresh executives straight from university were preferred to senior executives from outside the company rank. Fresh executives were easily shaped by company; they only accept organization’s culture, that’s a form of good socialization with consist to help

new employee to be familiar with the organizational culture.  The culture was strong with a greater impact on employee behavior  and cohesion. For example GM encouraged its executives to socialize off the  job with other GM people. The organization’s core values driven by financial consideration are both intensely held and widely shared. This culture had for principal beneficial the engineers who were able to go  beyond designer's decisions and create a new model of car by keeping away the design aspect. This concept is known as employee empowerment. Executives believed that the GM was special.

4. Describe the new culture that Lutz is trying to create.

He’s encouraging people to question past practices, to speak out on issues, and challenge company doctrine. The impact of leader on a strong corporate culture should come naturally since his leadership style contrasts in many ways to the old style. LUTZ is more willing to listen to the opinions of others and delegate authority, which should help create a culture of teamwork and consensus building at GM. Empowering lower level managers to make more decisions removes the fear of being overridden by the CEO, and

develops confidence.

Emphasizing

teamwork

and

empowering more people within the organization will help to shift from GM old culture to a new one.

5. Do you think Lutz will succeed or fail in his effort to change GM’s culture? Why?

We can’t say randomly that Lutz will succeed or not. We can’t say randomly that Lutz will succeed or not because this will depend on the mental disposition and the speed with which the employee GM will be willing to adapt to this new culture. Switch from one position to another is always hard to accept. Culture drives innovation. To have a culture of belief employees must feel not only engaged, but enabled and energized. Indeed an organizational culture cannot be replaced overnight; we must invest considerable time and resources.

CASE EXERCISE – Trying to Do the Impossible at GM 

BY:  JIANG KAI KOUASSI DIDO ANDERSON COULIBALY YOUNOUSSOU  JEAN-FRANCOIS AIME