General Motors Organizational Transition

General Motors was founded by William Durant on September 16th, 1908. General Motors (GM) is an American based automobile manufacturing company. From its inception, GM has grown from a small Detroit, Michigan manufacturing plant to one of the top three auto manufacturers in America and the world’s second largest. GM has manufacturing plants in 35 countries and sells in over 200 countries. Throughout the years, recognizable brand names such as Oldsmobile, Opel, Cadillac, Pontiac and Chevrolet have become a part of GM.

The company has branched out into the aviation and financial lending fields as well. Recent economic meltdowns have affected GM to point of bankruptcy in 2008. It took an American government bail-out in 2008 to save the company. GM then began an over-haul of its entire organization; including production, manufacturing, management structure and fiscal responsibility practices. The article, GM Organizational Change by Michelle Powers, published March 17, 2009, covers many points of the corporation’s transition from a traditional organizational model to a transformed organizational model.

The article identifies how changing the organizational model impacted GM’s workforce, customer base and local communities that GM’s many arms of business were a part of, support systems that were put in place at GM to insure successful transition. Before the transition was put into effect, GM had a traditional hierarchical management structure and viewpoint. At the top of the structure was the president, who was answerable to only the board of directors, senior management and vice-presidents of varied departments were answerable to the president.

On down the line there were division managers & supervisors and so on, then your average, regular employees. Having separate entities, such as Buick, Cadillac and other divisions operating differently from each other and the parent company was costly and ineffective in this “earth is flat” economic and communications era. GM North America President Mark Reuss, stated, “I could see clear as day that the mix and the structure of people just wasn’t right. These changes were necessary for GM to move faster and win. We need people who are change agents.

” After the economic troubles of the company, all aspects of how the company was run and directed were researched. Jack Smith GM’s CEO stated, “I had the opportunity to really structure the business in the way I thought is should be run. ” GM has started to move their organization into what is called a transformed organizational model (TOM). A TOM does not have multiple departments, performing separate tasks from others with different goals. It has taken several years to transform GM to an organization with a more centralized organization.

The company set up The Automotive Strategy Board, a management committee to ensure that the CEO was informed and knowledgable of the company’s progress, trouble-spots, and over-all health. A monthly meeting is held with all the heads of all the regional departments even Global officials had to attend via phone. With this plan, all of the companies leaders were informed and were able to implement common goals and practices. The separate computer systems bogged down communications and often produced more mis-communication than not.

A central software program was developed and implemented. All offices, administration staff, management, and employees were all trained on the new system world-wide. This level of development and training was costly. With the new level of stream-lined communications and universal usage, the system and training proved their worth. In the new Mishawaka, Indiana plant, GM has pioneered a teamwork concept called the Global Manufacturing System (GMS). Teams of workers have designed the jobs that are performed for each stage of the production process.

The worker is supported first by his or her own “team”, a group of four or five workers assigned to perform specific tasks. The team is supported by a team leader. In turn, each group of four or five teams has the support of a group leader. In addition, each person is a member of a team assigned to perform specific tasks. Each team member is cross-trained for each other’s job. “Inherent in this process is everyone helps everyone. The whole focus, the entire focus, of GMS is to support the operator,” said AM General President and Chief Executive Officer, James Armour.

So far, AM General has spent $35 million on more than 177,000 hours of training for employees. The plant(s) implementing the GMS model show more confidence in the workers. On the assembly line there are cords for each station in the event that a worker feels that there is a problem, he or she can stop the line at his or her discretion to correct the problem. The assembly lines are designed more ergonomically. Other plants use the straight-line assembly model where workers have to reach the line either by differing platform heights or outright reaching from the ground.

The new plant has the assembly line rolling along for different heights for each portion of the production needed in that placement. Employees have more control over their life on the job. This has been leading to less management/labor disputes . The plant has a three-step grievance system and as of yet, no grievance has gone further than the first step. Not all plant employees who have been offered a transfer to the new GMS model have not been interested in a transfer. For some people the old way is working best for them.

If this model continues to be successful, they might not have a choice about it for much longer. I believe that the changes GM has been implementing have improved the company overall. It seems that extensive research showed that getting the people of all levels throughout the company more involved with more aspects has had a positive impact. The use of teams has proved more effective than the solitary worker with a manager or supervisor to report to. Centralizing communications has put everyone on the “same page” for goal setting, problem solving, and share of information throughout the organization.

The more information that is shared, the better for all concerned. The employees are more empowered with the chance to improve their production, implement their ideas, creativity and have more responsibility. The company has showed concern for the worker’s well-being, respect for their jobs and contributions to the company. That type of leadership gives the employees confidence in their leaders and their jobs. The entire over-haul of the company has predominately been concerned with OB. Corporate culture begins with OB.

You cannot change a company for the better without taking into account the people who work at all levels for the company is not going to be effective on any level. GM has been recovering from its financial difficulties and these changes have had a major part in it. It has been showing consistent growth and profit for the last year. It has also been making it’s payments for the financial bail-out. I believe they are the only company who has done so. On top of that they have been running ads telling the people of America thank you and acknowledging their employees for their efforts at improving GM.