Management and Innovation 1

Management and Innovation: Case study on General Motors

Management and Innovation 2

Abstract

The paper examines the issues that raised in one of the top car manufacturing company GM

motors. The company recently faced a problem regarding the employee layoffs because of the

innovation. Innovation is the major factor and the most challenging factor in today’s business

world. The business environment is becoming challenging day by day and when the company

seeks for restructuring it may face different challenges. The article hence sees the reason behind

the innovation and the situation that results from innovation.

Key words: GM Motors, layoffs, innovations, organization, industry

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Introduction

General motors (GM) had developed iconic cars on US highways since 1908. General

motors was founded by William Billy on September 16, 1908. GM produces vehicles in 37

countries with more than ten brands such as: Chevrolet, GMC, Cadillac, Buick, Wuling, Holden

and many more (Wanasika, 2018).

General motors have faced lots of crisis since its operations. The company didn’t hired

any black women before 1964 and all the black women who were hired after 1970 has lost their

job in seniority basis layoffs. Moreover, General motors were once in a situation of bankruptcy

in 2009. The company was declared bankruptcy. As being a major company of US, government

took its 60% control and build up the General Motors. The company was facing the security

issues in year 2000-2009, which results in dropping down of the company’s share. The

company’s failure in handling ignition-switch model resulted in hundreds of death cases, which

was the major crisis for the organization.

The innovation is must for any organization. According to OECD (2010) “Innovation

drives growth and helps address social challenges”. Due to lack of innovation and the poor

business strategy, the company had to go on crisis in 2009. In 2016, General Motors had another

announcement of laying of its North employee by 15000 and shutting down its five factories.

Innovation in General Motors

Innovation is the healthy competition for any organization. Innovation is the relevant

aspect for success and long term survival (Palazzeschi, Bucci , & Fabio, 2018). In today’s

industry age, the companies which are flexible enough to adopt the change have long term

survival in comparison to the industries who follow old and traditional strategies. Here in the
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case, General motors are ready to bring innovation in their cars so that they won’t have to go

through the similar crisis that they faced in 2009. The company want to stop its fuel consuming

cars and replace them all with the electric cars, crossovers and the trucks. Hecklau, Galeitzke,

Flachs, and Kohl ( 2016) ,also believes that “Manufacturing companies need new strategic

approaches for holistic human resource management to cope with knowledge and competence

challenges related to new technologies and processes of Industry4.0”.

Reasons for Layoffs

The reason behind the layoff of the employee is because of work designs, selection of

employees on the basis of work design, automation and more importantly because of movements

of jobs to countries with low cost labor.

Work Design: An organization always faces challenges while designing the work. The

work should be designed in such a way so that the company will face less obstacles in future. In

the generation of Industry age 4.0, the organization should continuously go through: the idea

generation, the idea promotion and the idea realization stage. The company which are in number

1 can be bankruptcy in near future if work is not designed in well manner. Take an example of

Nokia.

In case of general motors, the company is completely changing its structure and the

priority which resulted in the layoffs of employee. The company seeks for innovation so that it

won’t have to go through bankruptcy again. The general motors may have shifted its priority to

trucks and cross overs because it had so many cases filed in the court regarding the safety issues

which were the results of the failure of ignition-switch.

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Selection of employees: The Generation Y employees, who loves to play with

challenges and loves innovation but the baby boomers are rigid and inflexible (Wong , 2008).

Since the employees who belong to baby boomers are near at their retirement period, they’re less

likely to adopt the change.

General motors have applied these strategy in its history as well when the black women

were layoff. The same strategy could have been applies by the industry once more because they

want some new and powerful employee in their organization who could adopt the change.

Automation: The automation of jobs is the other reason contributing in jobs layoffs. In

Industrial age 4.0, the automation of job are found more. From manufacturing to service oriented

business, automation is must. Automation ultimately leads to lowering the job vacancy for

people. The same reason is the other reason of having layoff in General Motors.

Movements of Jobs to Countries with Low Cost Labor: The business world is

becoming smaller. The organization wants to lower down its cost by shifting job to countries

with low cost labor. Robbins, Judge, and Vohra (2013), also believes that “The managers have

very hard decision in advancce nation, where minimum wages are typically $6 or more an hour,

to compete against the firm that rely on workers from China and othetr developing countries

where labor is available for 30 cents.”

General Motors is also thinking of shifting its job to Mexico and China, where the labor

cost is low. Shifting jobs to these countries helps in lowering the cost of manufacture of an

organizations which results in increasing the profit.

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Reasons for Innovation

According to Jakob and Samuel (2004), “Firm growth is related to innovation, typically

measured by the number of product varieties or the quality of goods the firm is producing”. The

major reasons for innovation any organizations are: for survival, growth, compete in the market

and to retain the employee as well.

Survival: The innovation is must in today’s era. The company which is regularly into

innovations are able to survive but the one who lacks the innovation do not have their existence.

For example: Nokia and Kodak were once leading the market share but when they failed to have

some innovation, they are in the state of exist.

Growth: The growth is the other factor which is the result of innovation. The survival is

not only sufficient for any business house, but growth is also the major factor that the

organization seeks. For example: Apple is increasing its product line with the help of innovation

for its growth.

Compete in the Market: Market has lots of competitors. None of the business have

monopoly market in the economy. The company should therefore continuously seek for the

innovative ideas in order to compete with its competitors. The company who continuously seeks

for innovation have the competitive advantage in the market.

Retaining Employees: Motivating and retaining employee is the other most important

and challenging factor. It’s very hard to find the capable and reliable employee. Moreover,

employee of today’s era search for challenging and innovative works. Hence, innovation is must

in any organization.
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Conclusion

The company should focus on technological innovation along with the psychological innovation

(Hecklau, Galeitzke, Flachs, & Kohl, 2016). The company is established for profit motive hence,

it focuses on minimizing the cost. In General Motors case, the company focused on minimizing

its cost by lowering the manufacturing cost and moving towards automation. Also, the other

major issue that exist in GM is the responsibility of employee layoff. There always exist trade-

off in organization and it must decide with the one that fits the most with organization and the

society.
Management and Innovation 8

Personalized CLO Applied Research

Abstract

The article examines how generation differences affects in personality and motivation.

The biggest challenge for the business world is motivating the employee. The motivational factor

of employee varies from person to person. For certain group, money may be the motivational

factor whereas for some other group, the status and the prestige may be the motivational factor.

Supporting my argument

According to Ganta (2014), “Motivation results from the interaction of both conscious

and unconscious factors such as the intensity of desire or need, incentive or reward value of the

goal, and expectations of the individual and of his or her peers.” When people feel motivated in

their performance than the organizational goal could be easily achieved. Hence, when different

motivational factors are introduced, it helps in having win-win situation for both the employee

and the employer.

Important aspects of article

The article has divided the workgroup into three category Baby Boomers (1945-1964),

Gen X (1965-1981), and Gen Y (1982-2000). The division has made on the basis of birth that

defines the generations. The majority of workforce has the cohort of Baby Boomers (Wong ,

2008). They believe more on job security and a stable working environment. Gen X are the

group who seeks more independency and self-sufficiency than the people from previous

generations .Whereas, Gen Y are seen to be comfortable with change and are less likely to see

job security as an important factor in the workplace (Wong , 2008).

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Findings and Conclusions

The article ending up stating that Baby boomers are likely to be coming towards the end

of their career hence, the change in system no longer motivates them. But in other hand, there is

generation Y employees, who loves to play with challenges. The company hence have to focus

on motivating the Gen X and Y employee by providing the challenges.

Industrial Example: The present work environment is full of diversity. People from

different caste, culture races as well as country comes together to work for one organization. As

working for the reputed banking industry, I have also experienced the difference in motivational

factors by different Gen people. The one incident that appeared due to difference in people’s Gen

is when the organization has to change its whole software system. After the management team

had finalized the software, some cohort of Baby boomers thought that it was just a waste of

bank’s money and time whereas Gen X and Y thought it as challenges which may help

organization to boost. This kind of challenges helps to bring motivation in younger generation

people.
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References

Ganta, V. C. (2014, November). Motivation in the Workplace to Improve the Employee

Performance. International Journal of Engineering Technology, Management and

Applied Sciences, 2(6), 221-230.

Hecklau, F., Galeitzke, M., Flachs, S., & Kohl, H. (2016). Holistic approach for

humanresourcemanagementinIndustry4.0.Proc. CIRP, 1-6. doi:10.1016/

j.procir.2016.05.102

Jakob, K. T., & Samuel , K. (2004). Innovating Firms and Aggregate Innovation. Journal of

Political Economy, 986–1018.

Palazzeschi, L., Bucci , O., & Fabio, A. D. (2018). Re-thinking Innovation in Organizations in

the Industry 4.0 Scenario: New Challenges in a Primary Prevention Perspective.

Frontiers in Psychology, 1-6.

Robbins, P. S., Judge, T. A., & Vohra, N. (2013). Organizationall Behavior. Noida, India:

Dorling Kindersely Pvt. Ltd.

Wanasika, I. (2018). General Motors: The ignition switch from hell . Jornal of Case Studies, 66-

81.

Wong , M. (2008). Generational differences in personality and motivation. Journal of

Managerial Psychology, 23(8), 878-890.