Cutting Jobs at General Motors Case Study

I. Cutting jobs at General Motors is a case that explains the issues taking place, and have been taking place with General Motors (GM). GM is at a place where the only money being dealt with is the money they have to pay their workers. This includes hourly pay, benefits, and pay to their retirees. Since the 1970s, GM sales has been declining. To better the company, and get them back on track, the CEO of GM, Rick Wagoner, announced a restructuring of the company. He explained how he wanted to study the product mix.

This also included cutting 2,500 jobs which calculated out to 14% of the workforce. He also spoke about closing some manufacturing plants by 2008. It has been said that General Motors just does not produce cars that customers want anymore, but they have been doing their best to change the minds of those who believe that. II. 1) Based on GM’s current condition, I believe it is ethical of them to reduce the number of employees. General Motors, as well as their stakeholders (all those who are affected by the activities of the organization) are already seeing a horrible future.

If General Motors was to keep all of their employees, they would go bankrupt to the point where they will no longer be able to even keep their business going; meaning instead of the 14% who no longer have jobs, 100% of the employees will be jobless. I believe it is ethical because just as GM need to look out for their employees and their customers, they need to be able to look out for themselves and the company first to make sure the company heads into the right track. If all employees were kept, they would be paying them for work that is not even coming in or being done.

In order for any business to succeed, the head group of the organization needs to focus on what is good for them and their company in order to make it better, and in this case, I believe that is what GM is doing, and there shouldn’t be anything unethical about it. 2) General Motors has many responsibilities when it comes to their employees, as well as the employees of its suppliers. Not only is setting an environment for their workers to feel safe working in one of their responsibilities, providing them with the items necessary to do their jobs is also part of GM’s responsibility.

There are also four perspectives of social responsibility that is key as well. The first responsibility is economic responsibility. This is the perspective that says the social responsibility of an organization is to make profits and provide attractive returns on investment. This is an important responsibility to their employees as well as their supplier’s employees because this brings in the profits which is what gives them the money to be able to pay their workers as well as keep the business running properly. The second responsibility is the legal responsibility.

This is the perspective that the social responsibility of an organization is to obey laws and public policy. This is also an important responsibility because if the company doesn’t obey the laws and public policy, the state could shut the company down leaving hundreds of thousands of workers jobless. The third responsibility is ethical responsibility. This is the perspective that an organization should respond to the spirit as well as the letter of the law. Just as the second responsibility, this works just like it.

Not following this responsibility could shut the business down, leaving many people jobless. The last responsibility is the philanthropic responsibility. This is the perspective that organizations should be good corporate citizens; organizations should seek to improve the welfare of society. This helps employees feel that they are maintaining that the organization is responsible for creating and maintaining an environment in which moral behavior on the part of individual organizational members is encouraged and supported.

If GM follows those four responsibilities, the business will remain to stand its ground, leaving tons of workers with jobs in order to support themselves and their families. 3) I believe that General Motors should have done things a little differently a little earlier to have been able to save some money before announcing the restructuring plan. GM could have begun to change things around when they started to realize that the business was starting to fail drastically. They could have cut down on hiring employees.

They could have saved money instead of making new model cars which cost them a lot of money and ended up not selling them. Also, instead of laying off 25,000 jobs, they could have done that slowly so that they would have been able to save some money earlier and not have to lay off that many people in the end. If General Motors slowly took small steps to make their business stand their ground, they would have the money to rebuild themselves, but at this point, they let it go too far. 4) I believe that GM can still be a socially responsible company if they get themselves back on track.

Letting 25,000 jobs go does not make them not socially responsible. They had to do what they felt would be best for the company in order for them to continue and better themselves. It was not what they intended on doing when they hired those workers, nor is it what they wanted to do, but in the end they had to do what they felt was best in order to keep the company moving and attempt to rebuild it. I feel that if they make cars that will satisfy exactly what the customers want and what the customers say they need, they will be back where the business needs to be and they will be able to be “socially responsible” again.