INDIVIDUAL ASSIGNMENT

ORGANIZATION: GENERAL MOTORS

RESISTANCE TO CHANGE

PROGRAMME CODE : BA734

COURSE : OCS 712
GROUP : BA7341B
PREPARED FOR : DR. FAIZAH BINTI MASHAHADI

PREPARED BY : AIMAN IDAYU BINTI GHAZALI

2021667778
History and background on General Motor
General Motors Corporation has been a leader and pioneer in the car industry since its
inception, and it continues to hold a strong position in this competitive market. Since 1908,
General Motors Corporation (GM) has been one of the world's major automakers in terms of
worldwide industry sales, with headquarters in the United States of America. William C.
Durant, the founder of General Motors Company, was a pioneer in-vehicle technology.
General Motors, a global vehicle manufacturer, employs around 280 million people
worldwide and has total assets of 149 billion US dollars. The corporation manufactures
automobiles and trucks in 55 countries (excluding US and Canada). General Motors is in
charge of several sub-brands. Buick, Cadillac, Chevrolet, Hummer, Pontiac, Saab, Vauxhall,
Holden, Saturn and Wuling are someone the names of General Motors' brands. Throughout
the 1920s, the General Motors Company established itself in a global market. Meanwhile,
the corporation established itself as a firm that offered status, influence, and other
alternatives. Unlike its competition, Ford, which concentrated on lower costs and cheaper
pricing. Customers who were more likely to have money to spend on more feature-rich autos
were targeted by GM. During WWII, the General Motors Company manufactured weaponry
and military vehicles for both Allied and Axis forces. After WWII, GM had grown the company
to become the largest firm in the United States. Following WWII, GM expanded its
operations and grew to become the largest corporation in the United States.
During the 1950s, the company's manufacturing line incorporated style, design, and
engineering breakthroughs. In the 1960s, GM also concentrated in insurance, home
appliances, financing, electronics, locomotives, and banking, among other things. In
response to the demand for smaller automobiles from European manufacturers, GM
produced the Chevrolet Corvair, which was later criticized for safety reasons. Oil prices rose
throughout the next decade, and in addition to the cost of oil, environmental issues were
taken into account at the time. As a result of the first energy crisis, there was a movement
from large oil-guzzling automobiles to smaller European cars. Following that, the second
crisis, which was rapidly followed by increased concern for pollution and the management of
over emission and safety issues, resulted in GM losing market share to more inexpensive
and smaller automobiles.
In the late 1990s, General Motors Company appeared to be on the verge of a major
turnaround, with sales stabilizing and shares rising. However, by the end of September
2001, the firm was experiencing difficulties, and the system was altered once more.
Following the 2008 economic crash, General Motors emerged as a survivor in the highly
competitive automobile industry, and the firm was bailed out by the government to avoid
bankruptcy in 2010. (bbc.co.uk). The manufacturer recorded a $6 billion loss in the first
quarter of 2009 and stated it burned through $10 billion in cash in the first three months of
the year, while revenue decreased by $20 billion (about.com, 2010). Despite these
challenging circumstances, General Motors sold more cars in China than in the United
States in the first half of 2010, according to Constantini (2010).
SWOT
Strength
GM was the automobile industry's leader during the twentieth century. Despite certain
upheavals, the company's market share remains highly competitive in the business. GM is
well-known not just in the United States, but also across the world. Furthermore, GM has a
growing market share in China. If GM makes the correct judgments, there will be no need for
GM to become the car industry's master again. Furthermore, GM offers a diverse portfolio of
brands, including Cadillac, Chevrolet, and Vauxhall. The company employs around 250,000
people and works in over a hundred countries across the world (gm.com, 2010). Therefore,
General Motors, with its global experience and its huge market share in the world, still keep
the professional place in the automobile industry.
Weakness
To analyze GM's shortcomings, we must first note that this corporation is based in the
United States. As a result, from its inception to the present, it has been overly reliant on the
US market. The organization should take advantage of the opportunity to expand abroad.
According to an Associated Press (2010) story, GM has a poor credit ratio, which is defined
as junk-credit Downsizing, on the other hand, is a difficulty. Some of GM's brands were put
on the market, while others were entirely shut down. Furthermore, GM's dormant profitability
is a problem. Following the worldwide economic downturn in 2008, companies' profit
margins and sales fell precipitously.
The main vulnerability for General Motors Company is that it is lagging behind in the
alternative energy trend. GM's rivals, such as Honda and Toyota, use less gasoline and
produce more ecological and environmentally friendly automobiles. As a result, difficulties
such as a decline in market share and a loss in business profit may arise.
The organizational structure of GM is vertical. This leads to a lack of communication
between the company's tiers, from the lowest to the top. As a result, several difficulties may
arise as a result of the operational and senior management levels' lack of communication.
Opportunities
Maintaining Global Expansion is one of GM's minor opportunities. In recent years, GM has
seen a significant increase in the Chinese market, prompting the company to increase its
focus on international markets.
Another benefit for GM is catching up with hybrid technology automobiles. Although they had
fallen behind alternative energy, it is not too late for the automobile behemoth to reclaim its
former glory.
GM has just lately begun to implement Green Manufacturing technologies such as water-
borne technology and source reduction targets for hazardous and non-hazardous output.
GM's capacity to create new automobile types and designs is a big advantage. Because, as
we all know, what we put in today is what we get out tomorrow. As a result, the GM
company's primary goal should be to focus on innovations.
Threat
The threat of rising supplier prices is particularly prevalent in the car business, as it is in
other sectors. This danger forces companies to cut manufacturing and production expenses
as much as possible while maintaining product quality. For example, the fluctuation in steel
prices between 2005 and 2010 had a negative impact on GM's production costs, notably as
a result of the 2008 economic crisis.
An increase in fuel prices is another concern to GM. Steel prices have fallen considerably
since the 2008 economic crash, as have sales. As a result, rising fuel prices have fostered
the development of hybrid and more fuel-efficient vehicles.
Another major concern to General Motors is increased competition. Because GM is no
longer a market leader, there are many various brands in the business that are trying hard to
compete with their rivals. As a result, in order to compete in the industry, GM needs always
keep innovation at the forefront.

Problem in GM

With the rise of Japanese automakers, General Motors declared bankruptcy in 2009, after
several years of falling sales and market share in North America. General Motors explored a
broad scope of organizational transformation because it needed to make changes in the
organization to avoid a full shutdown of the corporation. The American government
continues to investigate the firm, putting the CEO under pressure since they want a quick
turnaround.
As the CEO was in charge of devising the strategy to pull General Motors out of the crisis,
the communication efforts will be examined from the aspect of change management.
General Motors began to fail as its sales continued to drop with the entry of Toyota and other
Japanese manufacturers, and as the financial crisis struck. Toyota surpassed General
Motors to become the world's largest carmaker in sales in 2007. The loan was made
available to General Motors by the American and Canadian governments to assist the
corporation in overcoming its financial difficulties.
External issues such as the introduction of Japanese automobiles, which decreased General
Motors' market share, as well as other external factors such as the financial crisis, which
impacted the company's cash flow.
Furthermore, internal factors such as higher employee pay than other firms pushed General
Motors to update its organizational systems.
General Motors implemented a cost-cutting reform in which the firm dropped pay to a
particular level, and a cultural shift was implemented to abolish the managerial hierarchy in
order to speed up day-to-day decision-making.

Lewin’s Theory

Bringing about change in a company is a challenging process, especially if it is done at every

level. Various change approaches and models have been developed, with Kurt Lewin's 3-
step change model being one of the most notable. According to Lewin, The Field Theory
claimed that individual behavior is a function of the group environment.

Unfreezing
In this step, Lewin argued that not all approaches are suitable for each situation. As a result,
he proposed unfreezing the equilibrium, i.e. discarding obsoleted individual or collective
behavior. As a result, the new CEO instituted open communication in order to hear the
opinions and criticisms of the plant's employees. Despite activating the network of ties, it is
useful for defusing tense interactions and raising awareness of diverse roles for influencing
change.
Change
Reformist begins to take action to achieve the desired state and evaluate the performance of
all the forces at work during the whole process of change. To restructure the plant ,
technology support and its support is essential. The new CEO encouraged the employees to
take part in production and problem-solving. Additionally, the required hardware are
redesigned and relocated.

Refreezing
This happen when new behaviour are formed, reformist need to keep them sustainable. This
step is significant for successful innovation. The initial change of working environment and
employee involvement has become the norm gradually.

Micheal Porters forces

As a worldwide corporation, GM works in around 57 countries, including Canada and the

United States, and they provide and operate in a number of services ranging from
improvement, marketing, and production of automobiles and trucks to economic and
insurance services (Datamonitor, 2009). General Motors Corporate will be scrutinised
through the lens of firm strategy, competitive advantage, and analysis based on Michael
Porter's five forces.Porter (2004) identified five such factors: (1) rivalry among current rivals,
(2) barriers to entrance, (3) pricing pressure from substitutes/complementaries, (4) buyer
bargaining power, and (5) supplier bargaining power.
Rivalry Between Existing Competitors
'Strategies adopted by one business can be effective only to the degree that they give a
competitive edge over competing firms' strategies.' David (2011). As a result, when we look
at the GM motors in this part, we can see that in the 1970s and 1980s, rivalry in the US car
industry became much more intense due to the increased presence of international rivals
such as Honda, Toyota, and Nissan. Although GM was the industry leader at the time, its
competitors began to compete with GM by offering alternative products. Toyota, for example,
began to create automobiles at a cheaper cost than GM cars, despite the fact that the quality
of the cars was good. As a result, GM's competitors became well-known brands, while GM
struggled to compete with them.
Barriers To Entry
New entrants, according to Porter, might bring extra capacity to a sector. Furthermore, new
entrants may win market share and earn significant resources. Meanwhile, the entry of new
businesses into any market can reduce price and profitability. Although new entrants may
appear to be a threat, they may also provide protection to established businesses. GM made
a lot of money and expanded its company throughout both World Wars. Because GM was
the industry leader and a well-known brand, it was difficult for competitors to join the market.
Smaller firms found it really difficult to compete with the GM. GM manufactured self-starters
after splitting from Ford in the early 1920s; later, in the 1970s, Japanese and European
businesses offered their fuel-efficient versions to the industry.
Pressure of Price From Substitutes/Complementaries
In the highly competitive automotive industry, any change in the cost of ancillaries such as
gasoline and tyres may have a considerable influence on automobile demand. When it
comes to GM, rising gas prices are expected to have a significant impact on the corporation.
Because GM cars are often inefficient in terms of energy use. As a result, GM will be
significantly influenced.
Bargaining Power of Buyers
Buyers compete with the industry by decreasing prices, negotiating for greater quality and
more services, and pitting competitors against one another, all at the expense of industry
profits. Porter,(2004). As a consequence of substantially improved information technology
and globalization, GM (and other firms) customers were more aware of what they were
getting and how much they were paying. Furthermore, obtaining information about GM's
competitors via the internet increased GM dealers' bargaining power.
Bargaining Power of Suppliers
Suppliers in industry play an important part in the success of their firms. They may lower the
quality of their items or boost their costs. Because there are so many suppliers for raw
materials and machine components, the threat to GM is relatively minimal (Nytimes, 2011).
However, the United Auto Workers (UAW), a formidable labor organization, poses a
significant challenge to GM's economic capabilities and durability. For example, as
compared to rival goods, the obligation of pension and health-care expenditures gained an
additional $1,400 to the cost of each vehicle from GM, The Economist, (2008). This is a
fantastic sum, and GM must look for methods to reduce this liability so that the firm can
develop economically and flourish.

Recommendations
In my opinion, General Motors should pursue strategies such as restructuring, product
development, liquidation, and market development. If GM develops the product, it will be
able to keep up with the pace of the competitive climate. Consider hybrid SUV automobiles
as a realistic application of this idea, which matches the GM design while retaining the SUV
sector, essentially assigning the business to stay up with trend models.
Another idea I have for GM is to re-evaluate the market. The global market is an ever-
changing market. GM autos initially had a classic appearance, but as the business evolved,
they began to create huge cars, particularly for the US market. One practical example is the
manufacture of cutting-edge vehicles. They would have a competitive advantage if they
developed such future vehicles before Toyota.
Liquidation is essential for GM. This is because its assets surpass its profits. If General
Motors can acquire the assets in cash, the company may be more financially available.
Furthermore, if this procedure is successful, GM will no longer be dependent on the US
market and will be able to compete on a global basis.
Finally, the brand is in a solid position and prepared for future global expansion. It has to
invest in new connections to increase brand exposure in Europe and Asia. The demand for
small and fuel-efficient vehicles in Asia, particularly in India and China, has risen, resulting in
large revenues for the brand. It may improve income by delivering more fuel-efficient and
electric vehicles to these locations.

Conclusion

Finally, several strategical analysing approaches, such as Porter's Five Forces, Lewin's
Theory, internal and external factors analysis, and SWOT analysis, are utilised to study
General Motors Corporation. Because of the company's long history (almost a century), the
GM's search for and use of systems is rather wide. This assignment investigates the firm in
depth in terms of competitive advantage, taking into account both internal and external
aspects.
In reality, any company or organization will make mistakes throughout their business life
cycle; nevertheless, reducing such errors is one of the most critical areas for the
organization to work on. When we look at GM, we can see that they were incredibly
successful in an industry with no other competitors. When GM's competitors joined the
market, however, GM's global market share began to drop. They did nothing because they
ignored them until they ran out of money. Following that, they altered a number of systems
and began competing with their rivals.
General Motors should explain the potential and appropriate sectors to service. In addition,
the GM should be concerned with arrangement application and differentiation strategy. For
example, the Focus strategy may aid GM in lowering costs when the company transitions
from a broad-line manufacturer to another variety. By doing so, GM will be able to
differentiate its product from its competitors by focusing on a certain niche market that may
do significantly better.
The other is to be prepared for any and all adverse events, such as a financial catastrophe.
Despite the fact that it is an unanticipated component, enterprises, as well as GM, should do
a SWOT analysis under the heading of Threats. Staying in a prepared position always
provides a significant competitive edge over other competitors in the worldwide industry.
Last but not least, in order to keep up with the competition, GM needs to strengthen and
improve its product development. Along with product development, environmental aspects
should be considered in order to achieve high company quality.
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APPENDIX