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Final GM Culture Crisis Case Study 0

Trystia Savor

Southern New Hampshire University

Culture is the most important element in an organization. When culture is ignored on several aspects about an organization like public relations or safety and quality, this could spell doom for the progress of the organization. A good organization culture on the same areas gives an organization a good and ideal outlook. Currently, GM has been in the news and probably for the very wrong reasons. The company has been investigated lately about an ignition switch recall that may have led to the deaths of 13 deaths that are confirmed (Kuppler, & Kuppler, 2017). To cope up with this bad publicity and safety issues the company is making a series of changes that will set the company back on a good track record.

The culture crisis at the company can be use and studied in depth by other companies to avoid cases of compromise on quality and safety standards that may end up hurting lives and an organizations customer. The GM case is an interesting and peculiar case as seen from the case study; a company’s culture that is quite dysfunctional and it yet still delivers amazing work at a very global scale. Evidence and investigations show that the problem with the switch was well known in advance by engineers at the GM facility who wished it away and failed in their oversight duty. After the recovery of a crashed car in a junkyard and the switch was identified as the problem, the whole issue was put off as a customer convenience problem rather than a problem of safety (Kuppler, & Kuppler, 2017).

A speak out for safety culture must be prioritized at the organization. People and employees who report safety problems and other technical hitches that compromise safety should be rewarded. The organization must reward and promote good and safety conduct from its employees rather than rebuke them for compromising the speed with which a product launch is completed before a timeline. An organizational culture that prioritizes safety over competitive advantage should be the benchmarking culture and drive of the organization.

The organization highlighted the problem without offering a real solution to it. The real crux of the matter however lies at the center of the company’s culture which at any rate can be said to be less keen on the important things like safety, prioritizing profits over safety. This is the problem with GM. At the onset, the report from Barra seemed to comprehend the problem but things changed with the tabling of the report at the House Committee. From the report, one could tell that the company and the investigators did not address the overarching issue in the recall and that was organizational culture. Parts of the report asserted that it was hard to conclude whether general culture was to blame. Contrary, it is in fact just the very opposite, that it is easy to conclude that the organizations organizational culture and behavior is to be blamed for the crisis.

In the wake of the crisis and tabling the report, the organization has taken a path to remedy and mitigate the crisis (Kuppler, & Kuppler, 2017). This remedial path began by apologizing to the victims and offering no excuses for what happened. This was the right path but then again came the firings, procedure changes, policy changes and a host of other top down changes. The thoroughness of the investigation can be seen by peeping at some of the conclusions appended at the end of the report. Even after knowing the problem and having the responsibility to fix the problem, no one actually did volunteer and solve the problem. Nobody demonstrated the urgency to deal with the switch problem in a period of 11 years. Several company personnel were aware of the problem to include lawyers and engineers and no one raised the issue to be dealt with at the highest levels.

The organizational culture at the helm of the company down to the subordinate staff in GM is bureaucratic. The culture is also more of process oriented and this has led to little or no results over discussed issues. In the suggested report by Valukas, there are 90 suggestions that have been recommended for the organization that include a change in the organizational structure, communications with regulators and supplier interactions (Kuppler, & Kuppler, 2017). Still, the recommendations that fall under the category of safety and a culture of individual accountability are the hardest to implement.

The ways in which an organization changes its culture is tricky to implement and identify. Cultural change is slippery and nebulous. Simple structural moves are not enough for the company to excel and become a preferred auto company for consumers, the behavior of the organization has to change radically. To get people to talk to each other and improve departmental communication and improve databases is quite simple. Adding a few positons while disciplining a few employees is also quite simple, but getting people to take responsibility and accountability for some problems is not very easy. This is the kind of cultural change that needs to occur at GM. A culture of accountability and collective responsibility needs to be instituted at the center of the organization. Instilling corporate morals in an organization such that people take ownership of something that has long been perceived as the job for someone else.

The leadership style used in the case study is the laissez-faire where the management gives control to its subordinates and the power to make the important decisions. This leadership style can be evidently seen throughout the case as the management was not supervising any work that was going on. There were many defects in the product which never reached the upper management. The lower managers also failed to solve the problem and neither did they report it. Due to this leadership style, the managers were unaware of the happenings at the organization (Skogstad et al. 2007). They were involved in other important tasks while the essential tasks of safety were subordinated. If these would have been reported, then the tragedy would not have occurred and the upper management would have taken care of the problem.

After the incident occurred, the management and leadership style was changed from laissez-faire leadership style to democratic leadership. Jeff Boyer was named the Vice President of safety. He was to oversee all the work of the lower level employees and to oversee the safety processes and to ensure that all the guidelines are being followed. Furthermore, the company introduced 35 new safety instructors that would keep the upper management informed regarding any mishaps that might appear in the future.

The internal influences that impacted the company’s leadership policy could be the amount of trust that the company had over their employees and lower level managers. The management believed that the lower level workers and managers were capable people and would do their jobs effectively. The external influences that bought about the leadership policy were the tough competition that the company faced from other organizations. As a result, the upper management of the organization restricted themselves to the important and priority tasks while other tasks were delegated.

The relationship between the decision-making process and the leadership style is of laissez-faire. In this leadership style, the workers have the power to take any decisions that they see fit and the upper management are more engrossed with their own tasks. There is not a lot of check and balance and the lower level managers and workers are given a free reign regarding the decision-making process.

The internal organizational culture of the organization is very informal due to the leadership style of the company. An Adhocracy culture is followed in the organization as the employees have the power to take the decisions themselves. Leaders are considered to be innovators and risk takers and they handle the priority tasks of the organization (Lund 2003). Moreover, the organization promotes freedom in the organizational culture.

There are many instances that show that the company was operating under an Adhocracy organizational culture. Firstly, there was no sense of urgency to complete the tasks on time and the employees enjoyed considerable freedom. Secondly, no reports or complaints regarding any safety defects were reported to the upper management and the employees took the decision to hide it themselves. Lastly, there was also a reluctance to raise the problems towards the managements. All these aspects are associated with an adhocracy culture.

Their leadership style of laissez-faire and the adhocracy organizational culture favored each other greatly. The leadership style and the organization both promote freedom for the employees. Secondly, in both the leadership style and the organizational culture, the employees have the power to take the decisions themselves.

Both the leadership style and the culture of the organization were harming the company. There was too much freedom and lack of supervision over the employees. The employees took the decisions themselves, noticed the negative implications of these decisions but failed to report them to the management. As a result, the change in the leadership style was greatly influenced by the organizational culture. This is because a democratic leadership style will ensure that an adhocracy organizational culture is supervised properly to ensure that no mishaps and conflicts arise.

As the employees were given too much freedom and the power to make the decisions due to the leadership style and the organizational culture, they started to believe that they owned the business and ran it as they see fit. They took all the important decisions especially regarding consumer safety and bothered to tell the upper management regarding the negative implications. Many employees were also fired due to non-compliance and having a bad attitude. The employees behaved and reacted this way because of the lax management and the leniency that they have been afforded for the past many years. Hence, the behavior of the employees was molded and shaped due to the leadership style and the organizational culture.

References

Kuppler, T., & Kuppler, T. (2017). The GM Culture Crisis: what leaders must learn from this gm-culture-crisis

Lund, D. B. (2003) Organizational culture and job satisfaction. Journal of business & industrial marketing, 18(3), 219-236.

Skogstad, A., Einarsen, S., Torsheim, T., Aasland, M. S., & Hetland, H. (2007) The destructiveness of laissez-faire leadership behavior. Journal of occupational health psychology, 12(1), 80.