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CUEGIS - General Motors

Organizational changes and culture at General Motors significantly impacted employee motivation. A change in leadership promoted quality over profits, but communication problems led to faulty ignition switches causing deaths. While decentralization under the new CEO positively motivated employees, job insecurity from plant closures demotivated them. Organizational changes must consider their impact on culture and employee needs and motivation to be successful.

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Varenya Pasumarthi
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324 views

CUEGIS - General Motors

Organizational changes and culture at General Motors significantly impacted employee motivation. A change in leadership promoted quality over profits, but communication problems led to faulty ignition switches causing deaths. While decentralization under the new CEO positively motivated employees, job insecurity from plant closures demotivated them. Organizational changes must consider their impact on culture and employee needs and motivation to be successful.

Uploaded by

Varenya Pasumarthi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Q) With reference to any one organisation that you have studied, discuss how

change and culture may impact motivation of employees.

Organisational changes are changes made in an organisation’s objectives,


strategies and operations. These changes generally take place to sustain in a
constantly changing market. Organisational culture can be defined as the
beliefs, values and the ecosystem at the workplace of an organisation. Changes
in an organisation are strongly connected the organisational culture. This is
because many employees are not ready for the change and cannot adapt to
these changes and hence, results in demotivated staff. In the same way, a more
decentralised organisation structure makes changes smoother and causes less
resistance from the employees because the employees’ opinions are taken into
consideration. General Motors is an organisation where this relationship can be
clearly explored. General Motors is a multinational company headquartered in
the United States (Detroit, Michigan). General Motors is responsible for
designing, manufacturing and distributing automotives and automotive parts.
The CEO of General Motors is Mary T Barra since 2014.

The corporate culture of General Motors promotes agility in human resources


due to the demand of rapid innovation and high intensity manufacturing
process. General Motors provides the employees with freedom and
opportunities to evolve by helping them develop skills. This would benefit the
company because the more skilled the employees are the more they can
contribute to the organisation and also attracts potential employees. This also
motivates the employees to work harder and be loyal to the organisation
because they feel that they are being cared and that their potential is being
recognised. This organisational practice is based on Herzberg’s theory of
motivation. The further training that General Motors provides to its employees
to develop their skill profile is a motivator as in a psychological growth factor
for the employees which increases self-satisfaction and a sense of recognition
and advancement for the employees. General Motors is a labour intensive
organisation. This means the process of production is facilitated by extensive
problem solving skills and fast thinking. Hence, the company encourages its
employees to exceed the standards set. It is also a motivator through job
enlargement according to the Herzberg’s theory as the employees are given
freedom by the management in how they operate. This helps the organisation
to sustain in the market with competitors such as Toyota and Ford as the
internal problems are quickly and efficiently solved. Another factor of
motivation is the organisation’s decentralised structure. General Motors
eliminated the Automative Product Board and Automative Strategy Board who
were the organisation’s centralised decision making arm and directly reported to
the CEO. This decision was taken by the company to increase efficiency,
responsibility and accountability. The organisation is also focused on maintaining
and improving internal and external relationships. These relationships are
mutually beneficial for all the stakeholders of General Motors. This also satisfies
the employees’ social needs according to Maslow’s hierarchy of needs because
this makes them feel accepted and a sense of family which makes them loyal to
the organisation. In a decentralised structure, employees feel more valued and
empowered as their role in the decision making process of an organisation is
more crucial. This also reduces the chances of resistance from the employees.
In addition, the employees are more responsible and accountable in a
decentralised structure. Leadership is also an important part of organisational
culture that affects motivation of the employees.

In June 2014, General Motors manufactured faulty ignition switches which led to
the immediate death toll of 13 people. There are many cultural complications
that resulted in this problem. Firstly, the company was only focused on cost-
cutting more than safety which compromised the quality of the products
manufactured. When Mary Barra took over as the CEO in January of that year,
she only began then to move the aim of the organisation from cost cutting to
importance to quality and customer safety. At the end of the day, the
organisation’s employees worked in a culture where the numbers are the main
focus. Secondly, there was a communication problem in General Motors where
the managers and the employees were not transparent to the people they are
accountable to because there was a fear of the reception from the senior
management to blunders in the manufacturing process. Overtime, Mary Barra
changed the culture of General Motors where employees began voicing their
concerns to their managers. She also launched a campaign called “Speak up for
safety” which is a hotline for employees to easily and efficiently report concerns
about the operations. In 2018, General Motors announced that it will unallocate
products to certain factories in North America making more than 14,000
employees redundant. As a result, many employees feel less secured in terms of
job security. According to Maslow’s hierarchy of needs, security needs are the
second most important level of needs. If these needs are not recognised by an
organisation, the employees feel demotivated. The other employees in the
organisation feel insecure and demotivated to do their job and hence labour
turnover increases.

In conclusion, organisational change and culture play a significant role in overall


motivation levels of the employees of an organisation as demonstrated in many
cases by General Motors. A change in leadership has taken place at General
Motors. This change promoted the employees to work towards improving
quality and not just on making profits (i.e., cutting costs). However, her
leadership style and the communication problems in the organisational culture
caused demotivated staff that produced faulty ignition switches leading up to
hundreds of deaths. The decentralised organisational structure change brought
by Mary Barra at General Motors is a hygiene factor that positively impacted the
motivation levels in the company.
Bibliography-
- http://panmore.com/general-motors-organizational-culture-agility-
characteristics-analysis
- https://www.cnbc.com/2014/05/16/the-corporate-culture-behind-the-
scenes-at-general-motors.html
- https://www.businessinsider.in/GM-CEO-Mary-Barra-said-the-recall-crisis-
of-2014-forever-changed-her-leadership-style/articleshow/66622785.cms
- https://www.cnbc.com/2018/11/26/gm-unallocating-several-plants-in-2019-
to-take-3-billion-to-3point8-billion-charge-in-future-quarters.html
- https://www.asee.org/documents/zones/zone1/2014/Student/PDFs/
159.pdf

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