General Motors Company’s Analysis and Solutions

Subject: Case Studies
Pages: 11
Words: 2859
Reading time:
12 min
Study level: Master


Competition in a market filled with offers is fierce for both new players and successful companies with significant experience and recognition around the world. As domestic companies enter the global market, the distribution of power changes, and the level of competition increases. In market conditions, when the external environment is sufficiently turbulent, poorly predictable, and largely independent of the company’s efforts, ignoring the strategic context of the activity can lead to catastrophic consequences. The practice of employees at the enterprise without a contract and a reduction of the salary plan lead to low-quality goods or the search for other jobs by the workers, leading to the enterprise’s bankruptcy. The problem of displacing the player in the market is very relevant in modern business and leads to job losses. The results are primarily global when giant corporations are withdrawn from the market, reducing the large number of people provided with health insurance and safe work.

In the case of fierce competition, it is necessary to reduce expenses in order to make goods and services available to the customer. Whether it is appropriate to close some businesses and lay off employees to be competitive is faced by many companies. To be able to assess all the advantages or disadvantages of such a step requires a comprehensive investigation and analysis of further actions of the enterprise. Thus, that if a corporation relies on the quality and innovation of goods and services, it may be necessary to provide additional training and expand the specialization of already tested workers. Therefore, in the long run, it is possible to increase high-quality employees and expand production.

The study aims to analyze and evaluate theories on the organization of labor in enterprises in terms of psychology and the relationship between workers and managers. The work will use sources that describe approaches to work and organizing people to optimize resources (Begolli, 2020) and (Wilson, 2018). That is, the fundamental theories that ensure the adjustment of production processes and the selection of agents in accordance with the needs of the business will be considered. One of the central theories that will improve relations in the organization will be the Tuckman model (Jones, 2019). Scientifically explained reasons for reduced employee productivity due to existing conflicts in the workplace will also be considered (Lindred, 2017). Particular attention will be paid to the leader’s influence in the workplace, especially when his work will lead to improved production in an almost imperceptible way (Cairns, 2017) and (Mohammed, 2018). The study of the organizational culture of the enterprise will establish a common goal of workers and identify opportunities to consolidate the efforts of employees (Metz, 2017) and (Narayana, 2017). The research will also include the importance of implementing the practice of holacracy of organizations instead of hierarchy (Mosamim and Ningrum, 2020) and (Kumar and Mukherjee, 2018). At the same time, the Denison model’s application in the enterprise’s current conditions will be explained and analyzed (Gholam and Nikooravesh, 2016). An analysis of employees’ work in critical situations, such as high market competition for the company, will also be presented.

Research on new techniques to set up production will be based on analysis aimed at uniting workers and raising the level of collective spirit (Navarro and Rueff-Lopes, 2020). New methods of strengthening employees will show the need to use the necessary motivation and improve understanding of the overall goal. Accordingly, studying the theory of joining forces for the common purpose and additional training will help the firm get out of the crisis faster with the minor losses. Similarly, if employees are interested in improving work processes, they will be able to keep their jobs, salaries, and health insurance.

The Main Problems at ‘General Motors’

Company ‘General Motors’ has suffered significant losses due to the expansion of the United States automotive market and the entry of foreign manufacturers. Due to the corporation’s close to bankruptcy, it was decided to lay off some workers and close unprofitable firms. Such measures have led to hiring workers without an employment contract and the deterioration of operating conditions and health insurance. Also, the conflict escalation between workers and the company due to unsatisfactory working conditions led to rallies. Even though the conflict of interest arose gradually by reducing employee privileges, the leadership was unable to prevent mass strikes (Lindred, 2017). In turn, if insufficiently skilled workers perform the work, product quality remains questionable. The activity of workers in the lowest working conditions also leads to inefficient production. As a result, all factors lead to a decrease in the quality of the product and increase the time to manufacture the goods (Begolli, 2020). Therefore, savings on employee safety have negative consequences, such as possible injuries to workers in the workplace and reduced efficiency. Maslow’s theory confirms this; if the lower-level needs are not met, the employee will remain depressed and will not try to develop.

Problems in the company
Figure 1: Problems in the company

The effectiveness and efficiency of management of organizational activities under challenging conditions, which increases the requirements for staff, are primarily determined by the use of socio-psychological methods in personnel management. Therefore, managerial influence is the primary socio-psychological method that increases the efficiency of labor processes. When modeling subordinates’ behavior, they know their following characteristics: interests and needs, goals, experience in solving problems, available resources, and their idea of the result (Begolli, 2020). Employees who do not have guarantees of further work at a certain enterprise have no motivation to perform tasks quickly and efficiently. Also, if the company does not pay a high salary and does not provide health insurance, employees will not work long at a firm but will try to find a better job. Such a cycle will lead to the staff being constantly updated, and the quality of goods will fall.

In order to organize work at the enterprise, it is necessary to carry out selection and training of employees. Work with staff refers to the organization of labor because without providing the employee with the required knowledge, without his professionalism cannot count on effective activities in the workplace. In order to start, it is necessary to organize a professional selection of candidates by checking the state of health, basic knowledge for work in this field, and the desire to improve and work to achieve results (Mohammed, 2018). The next stage is the division of labor, which will ensure the performance of work by a specialist in this part.

That is, only professional staff that will work to get the company out of the crisis will be able to deliver competitive goods and meet customer requirements. Therefore, managers can reduce jobs and leave to work only dedicated and professional people as a viable option. Thus, their interest in work will be due to a sufficient level of salary and social security. Otherwise, experienced and expert staff will move to work for competitors, which will reduce the chances of going out of the crisis.

In the case of the company, after the strike, it agreed to enter into contracts with agents. In order to establish work with permanent employees who are already interested in the quality of work, it is necessary to establish a communication channel. The correct structure of the company is crucial. The structure should support the rapid transfer of information from directors to ordinary workers. In this way, it will allow managers to make urgent decisions quickly and provide feedback. At the same time, employees will also be able to inform the company’s management of their needs directly. This tool will avoid strikes and resolve pressing issues through effective dialogue. Choosing a leader among employees who have sufficient qualities to express workers’ general opinions will help establish a quick solution to pressing issues (Navarro and Rueff-Lopes, 2020). The chain can work in this way, workers agree on their reasons and justify them, and the representative turns to management and presents a common view.

Methods to Improve the Relationship between Employees and Administrators

Communication will improve the level of performance of tasks. The opportunity for training and dialogue will create an organizational culture in which the style of behavior of workers and managers will contribute to the achievement of common goals. If the agent is comfortable in the work environment, his productivity will increase. If the manager effectively influences the employee’s work by liberal methods, the level and quality of labor productivity will be higher (Cairns, 2017). Accordingly, the company will receive higher profits, which will raise employees’ salaries. This connection between the organization of production and worker motivation is extremely effective for the final consumer of goods.

Also, the possibility of division of labor in the enterprise in accordance with the unique skills of each employee will increase production efficiency and permit the corporation to repay the loan faster (Metz, 2017). Work efficiency and product quality will increase when workers do not protest against violated rights but are able to turn to management through their leader. Tuckman’s model shows that as a team develops culture and ability, relationships are established, and the head changes leadership style. That is, management begins with leadership, then moves on to coaching, then to partial participation in the process. After successful work, the manager can delegate his functions to the employee and leave the process (Jones, 2019).

Another method should also be studied that can help improve the relationship between workers and the employer. The new concept of self-government replaces the traditional hierarchy of management, where a minority of managers in leadership dictate to employees working conditions that do not always correspond to normal functioning states. In the case of an enterprise, ‘General Motors’ the hierarchical model was applied, which led to the deterioration of the situation. It would be appropriate to use the model of holacracy, in which power is not concentrated in the hands of individuals but is divided according to a set of rules.

Figure 2: Hierarchy

Thus, the responsibility is spread so that ordinary people become leaders within their roles. Holacracy practices a structured process of integration decisions that take into account the views of all parties on a particular issue (Kumar and Mukherjee, 2018). Also, in such conditions, it is ensured that the proposed changes and objections to the variations will result from the organization’s requirements and not from the personal preferences or selfish motives of workers.

However, considering the concept of hierarchy, one can identify its obvious advantages, such as a clear division of responsibilities, unity of command, subordination, standardization, and interchangeability (Mosamim and Ningrum, 2020). Unfortunately, the researched enterprise failed to create their work in accordance with these principles.

As a result, workers and management could not join forces to optimize work after the crisis began. Thus, the corporation ‘General Motors’ should develop a strategy of personnel management and pay attention to the concept of holacracy. In the case of effective dialogue, the workers realized that a crisis situation has appeared and that they needed to work together and create decisions to perform progress. This approach can help unite the efforts of employees to improve the quality of the product and support active exchange between management and workers.

Figure 3: Holacracy

This style of behavior of the head of the enterprise would not lead to mass rallies of employees. Organizational culture will empower employees to unite based on a general purpose, particularly the company’s exit from the crisis (Narayana, 2017). In addition, they will periodically improve their skills in the production of unique products that have no analogs on the market (Wilson, 2018). Thus, the company’s profit will grow along with the motivation of employees.

Concepts of System Change and Policy in Production

Theory of Organizational Change
Figure 4: Theory of Organizational Change

Theory of Organizational Change is focused on the corporate culture, goals, and motives of workers of the organization. It also uses soft methods of training and development of employees, changes in the parameters of the corporate culture. It aims to achieve gradual development. In ‘General Motors’, due to the difficult financial situation in the corporation, rapid changes are not possible. Also, a company cannot develop the knowledge of all employees at once, so the theory is correct. Since intended for regular and effective changes that will improve production and optimize labor (Begolli, 2020). According to the method, the purpose of the change is to evolve organizational skills, particularly employees’ abilities, to involve them in the decision-making process to solve organizational problems. Thus, under the hypothesis, the chances of solving any problems in the enterprise without strikes increase.

It is worth paying attention to Denison’s model, which describes the development of knowledge as a source of economic growth. The explanation of the theory is that as knowledge related to production accumulates, the amount of output that can be obtained using a provided amount of resources increases. In the long run, the progress of knowledge and the benefits of savings are the principal factors in production per unit cost growth. Denison also drew attention to education as a source of economic growth and emphasized that education can affect the progress of knowledge. That is, more educated workers have the opportunity to detect and apply the most efficient of the known production methods analyzed (Gholam and Nikooravesh, 2016). Denison’s approach confirms the Theory of Organizational Change and emphasizes the necessity for continuous training of workers, even in the face of a crisis. Certainly, professional specialists are prepared to establish better production and manufacture goods that are not on the market, thus raising the company’s competitive position in the market.

The concept of Organizational Redesign for ‘General Motors’ offers constant updating and strategic change. According to the corporation’s theory, it was not necessary to reduce the production of certain brands of cars. The best solution would be to introduce additional production of profitable automobile kinds. In this way, jobs would be protected, and the firm would make a profit. A negative aspect of the method may be the unwillingness of employees to adapt to change. Also, in order to apply this approach in the enterprise, it is necessary to analyze the state of the market and evaluate which merchandise will be able to meet expectations and lead to a profit (Begolli, 2020). Only the integrated application of the two theories can manage the firm out of the crisis and organize production.

The main service that I would offer to businesses is a detailed analysis of the current situation in the company, the development of effective solutions to increase management efficiency. Accordingly, investigating the problem would improve the enterprise’s financial condition and reduce the incorrect strategy’s risks. Although, the study of the problem should have begun at the beginning of the crisis in the corporation, not after the mass strikes. Thus, the probability of ineffective state aid was reduced (Wilson, 2018). In my professional experience, I would choose a plan of hiring and training professionals so that a unique product can be sold. I would also pay a lot of attention to production technologies because the efficiency of the company depends on their power.

If the consulting company where I worked served the company, it would offer well-thought-out strategies for development and value-added. They increase sales to current customers and sell modern products in different markets (Begolli, 2020). This would begin with the development of new products and the development of new and exotic spaces for business. Since the approach was used, ‘General Motors’ competitors took advantage of this, conquering a new market by displacing experienced players. The consulting company would also offer to produce additional services and goods that would be necessary for cars. That is, by releasing accessories according to a specific automobile brand, there is a high probability that consumers will buy them. Also, my personal strengths, such as flexibility and agile decision-making, could be used in critical situations. Moreover, the ability to negotiate would provide for faster communication between workers and management. Thus, it would lead to the fact that the choice of ‘General Motors’ in favor of the company where I worked was successful.


In profitable industries, the competition represents a significant role. If new traders of demanded goods appear on the international market, a large number of customers will require their services. Thus, all other players need to optimize the forces that offer consumers an alternative. In the matter of the current case, the company has been trying for decades to get out of the crisis using hard methods. Accordingly, the reduction of workers and wages leads to a decrease in product quality. This method is not popular because it does not allow businesses to repay the loan and establish profitable production.

Therefore, the mistakes of the management that led to a protracted crisis were investigated in work. At the same time, approaches to resolving the situation are proposed, such as employee training and effective contact between management and workers. If the company adheres to the proposed theories, it will gradually be able to emerge from the crisis and become a dominant player in the market again. Thus, the business will be able to provide workers with a decent salary and further improve their education to maintain a high level of production.

Reference List

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Metz, L. (2017).‘Organizational culture: Key issues. A literature review’, The Annals of the University of Oradea, 1(1), pp. 797-805.

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Navarro, J. and Rueff-Lopes, R. (2020). ‘New nonlinear and dynamic avenues for the study of work and organizational psychology: an introduction to the special issue’, European Journal of Work and Organizational Psychology, 29(4), pp. 477-482.

Wilson, F. (2018). Organizational behaviour and work: a critical introduction. Oxford, United Kingdom: Oxford University Press.