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Running head: PERFORMANCE MANAGEMENT SYSTEMS OF GENERAL MOTORS 0

Performance Management Systems of General Motors

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Performance Management Systems of General Motors

Introduction

General Motors also known as GM is an American Multinational Corporation involved in the manufacture of vehicles and whose headquarters are in Detroit. The company has been facing many challenges in its management that saw it declare bankruptcy in the year 2009. The company has continued to hit the headlines since then for the wrong reasons and headlines saying that it is headed to the doom days. The company was able to recover from the bankruptcy through a government bailout but has not achieved the best in the market and industry. Some of the core brands like Chevrolet, and Buick among others have continued to face a hostile environment due to factors like competition from other manufacturers like Toyota and Volkswagen. The company has also faced problems with its employees over the years that have seen it loose many profits and fire some of its workers. The issue of employees and poor management has also played a major role in the many recalls that the company has been forced to make to some of its products.

Vision and Mission Statement of GM

The paragraph of the mission statement of GM indicates that the company is engaged in socially responsible operations throughout the world. The statement indicates that the company is dedicated in providing such qualities that its customers will receive superior quality. The statement touches on employees and partners stating that they will share in the success of the company and the stock-holders and investors will get the best returns out of its operation. The statement is strong but the parties stated in it are yet to see its application. The vision statement for the company is to see it become a world leader in transportation products and related services. According to the statement, the company will earn the customers’ enthusiasm through continuous improvement driven by innovation, integrity, and teamwork. From the grounds in which the company stands and what it has been through in the past, facts indicated that it has failed to honor its mission and vision statements. The company has failed to be the leading producer, it has failed to show innovation in production, and the shareholders have earned less from their investment in the company (Jindal, Laveena & Aggarwal, 2015). The company requires revamping of new ideas, strategies, and a change in the management. General Motors requires a performance management system that will see it progress from where it is position presently.

Performance Management System

A performance management system is a systematic way employed by an organization to improve its effectiveness in operations and also meeting its mission and goals as a corporate entity. The performance management system involves all stakeholders in the organization like the employees and the management. The performance management system also seeks to deal with the problems that are currently affecting the company and which are the reason for its poor performance. The problems that GM has been facing over the years can be tacked if an effective performance management system is put in place (Clark & Fujimoto, 1991). Performance management system of GM will cover several areas of interest in the organization that have caused it issues in the past. The best practices should steer the company to greater heights.

Executive and Employee Training

One of the best practices that the performance management system of GM motor can adopt to deal with its crisis is training. Best practices are those activities that can be adopted by an organization and help it to move forward to profitability and stable growth nature. Most of the vehicles that the company has been manufacturing do not attract many consumers in the market. The main reason is because the industry has other better variety of cars and vehicles that are more sophisticated than those produced by GM (Jindal, Laveena & Aggarwal, 2015). Failure to have proper training of executive and employees has seen the company fail to adopt good innovative strategies.

GM has failed to incorporate modern technology to come up with more innovative features that could be used to attract more customers and increase its sales. For example, if the company had better brands in the market in the year 2009, it could have protected itself from the bankruptcy issue. Training is an important feature in the performance management system that can help GM beat the problem of lack of innovation (Clark & Fujimoto, 1991). Take for example if GM had innovated its brands to be like Volvo which has self-driving cars, the competition could not be stiff and customers would still have something to look for in the company. The training would also equip its employees with the right skills to manage clean production that would bring the company a good reputation.

Legal Issues

Another practice that GM should consider in improving its states is to avoid legal battles and to have good representatives if the need arises. Legal battles have proved to affect the company at a great scale. Lawsuits are not healthy for any business. GM has faced several in its lifetime that has seen it make huge compensations that have reduced its retained earnings and profits attributable to equity shareholders. The battles have also tinted the reputation of the company leading to decreased sales. Over the few years, the company has dealt with many lawsuits involving negligence in its production. Most of the lawsuits have been associated with mechanical failures and recalls made due to poor production (Gray & Balmer, 1998). During the year 2014, the company recalled 6 million cars. It is a great number of cars that could have seen it gain a lot of revenues. The recalls mean that the company made losses on that lot of production during that year. In the same year, it was indicated that more than 13 people died as a result of using GM cars that had faulty ignition switches.

Such actions saw the company delay its production and spend more hours in court to defend itself from its own mistakes. Apart from destroying their image, GM also wasted a lot of time that would be channeled into coming up with new brands of cars that would be more innovative and suitable for the market (Clark & Fujimoto, 1991). The performance management system is aimed at ensuring that there is controlled manufacturing. Controlled manufacturing aims at ensuring that employees adhere to the standards of production and proper tests are made before brands of cars are released into the market. The management decision can lead to the decrease of recalls in the years as well as protect the company from getting any more into lawsuits. The solution will help the company achieve its mission by ensuring quality in production and that the shareholders get maximum returns out of their investments. The management decision can also allow GM to achieve its vision of becoming the leading company in the transport industry.

Economic Inequality

The changes in the world economy should be taken into consideration when coming up with any product to sell to customers. GM cannot blame itself for the economic changes that have taken place in the world over the past years. It is clear that the state of economy 10 years is not the current state. In most regions of the world, the economy has changed to the worst (Savage, Nix, Whitehead, & Blair, 1991). The number of people who can live a comfortable life has decreases and this should be noted by any company that is venturing into the vehicle manufacture industry. Low job prospects, low wages, the high cost of living and the little disposable income should be studied and analyzed by the management (Clark & Fujimoto, 1991). Proper management system to be adopted by GM should be able to come up with a viable way to remain relevant and survive in the business.

Currently, GM is known to manufacture cars that are very expensive to purchase. For example, Chevrolet is one of the brands of cars owned by GM. Most of the cars are high CC rating cars that cannot be afforded by every person. Such cars are only meant for the rich who are not the majority in the world. The performance management system should be able to identify the need to produce smaller cars that are cheap to buy and cheap to maintain in terms of fuel efficiency (Clark & Fujimoto, 1991). The company can sell such cars in the growing economies and it is certain that the company can make a lot of sales from that which can help in sustaining its operation and other costs. Such a move can also help GM beat the competition in the market from rival companies like Toyota who have diversified into affordable cars in different markets around the world (Jindal, Laveena & Aggarwal, 2015). The project management system in this area is aimed at ensuring that the management has the tactics of studying the economic state of the people and the markets and applying the most appropriate decisions of helping it grow.

Conclusion

In conclusion, GM has been facing major problems in the 21st Century of which most of these issues can be manageable. As discussed, competition, legal issues, lack of innovation, poor market study, and recalls are the major problems preventing the company from achieving its goals. The future of an organization depends on the management system that they have employed to be their guide in its operations. The project management system varies depending with the industry. For GM, a good should deal with all the problems that the company is currently facing. A project management system is a tool that must be employed by the management to ensure that its mission and vision is achieved with also ensuring that its interests are protected. Affairs of the employees should not also be neglected when coming up with the system because workers are an important asset to an organization. Even though general motor has been described to be a doomed company, it is possible to change that to a blessed corporation by employing the right project management system.

References

Clark, K. B., & Fujimoto, T. (1991). Product development performance: Strategy, organization,

and management in the world auto industry. U.S: Harvard Business Press.

Gray, E. R., & Balmer, J. M. (1998). Managing corporate image and corporate reputation. Long

range planning, 31(5), 695-702.

Jindal, S., Laveena, L., & Aggarwal, A. (2015). A comparative study of crisis management-

Toyota v/s General motors. Scholedge International Journal of Management &

Development ISSN 2394-3378, 2(6), 1-12.

Savage, G. T., Nix, T. W., Whitehead, C. J., & Blair, J. D. (1991). Strategies for assessing and

managing organizational stakeholders. The executive, 5(2), 61-75.