Incident Management in General Motors

Business is like a wind which can bring the fast storm or can please you with it smooth and cool effects. The difference is that wind cannot be controlled while you can manage your business. It all lays upon your management abilities how you prick your business to the height or how your management becomes a cause of bringing it down. In companies’ business it depends upon the people hired and appointed for the managing tasks. The management of a company in the market is a tough task no doubt but it becomes tougher when a sudden crisis or downfall starts. Here comes a tough time for keeping one’s company to face as minimum loss as possible.

This is a very critical situation and a single minor mistake committed at this time can become the reason of making you defaulter. The best of the management principles here is to save the maximum financial loss. This is the one of the best business management techniques which seems as the supporting pillar in more or less every type of business.

When talking about the response of General Motors, one can find an amalgamation strategy based upon mixture of some right and wrong decisions. The aspects which took the crisis to the worst were that the company didn’t bring the sticker price low even in the time when extremely high sales rate was needed. This goes against the above mentioned management rules. The board of directors must have taken the notice of the reason and the way to promote the instant sales. The high sticker price kept the car lovers away from the GM products and the result was the high market of GM’s competitors. Though the same policy benefitted the company a lot when these were the days of progress yet in the power recession period, the necessity was the promotions of sales which could have increased the growth.

One of the good strategies adopted by GM was reasonable compromise on the engineering techniques and the attaining way of parts all around the world. This helped GM a lot for continuing its survival and saving billions of dollars. One of the examples is the trimming of Hummer V3 which brought high sales later on. This trimming gave 6 inches increase in width and became as demanded by the customer.

Another good trick which was implemented and brought sufficient benefit was the decision to send employees on early retirement. Such a strategy is appreciated in the worst business times of a company and GM seemed right here to take this decision because the closing of five plants in a year made it difficult for the company to adjust its number of employees working over there. With the early retirement, GM did not recruit any new worker which did not increase the burden on the budget rather lessened it. This step saved the GM’s from going in utter disaster and helped the company to fill in the gaps of the deficits which was the reason of it being bankrupted.

Generally it is advisable in a business to take off the bonuses or revise the relaxation policies in the time of bad days. GM realized though quite later that it was very dangerous for it to lose billions of dollars on medical policies every year. So, the company took a decision to revise the medical policy with which it was able to save some of the drastic outgoing money.

After having an analysis of what a company should do in the time of crises and what GM did in comparison, one come to know that in good times of one’s business, one must not go for making of such policies which may not be helpful in bad times.

Business Impact Analysis

The mind sets and the philosophy of a company is the basic milestone upon which the company’s business rests. The worst of the worst happens when a company is not ready to bring the change or a revision in the time of crises and sticks to the firm made principals. This has brought disasters to very well established companies of the world. One of the rules among the good management is the mental agility necessarily found in the attitude of the policy makers. This agility enables the company to change the nature of the policies as per to demand of the time.

It was predicted in the international market that the competitors of the company is going to give tough times to GM. Toyota a Japanese automaker launched new models with the designs demanded by the public in the market and won a greater part of the sales. GM stuck to the old models and did not bring any innovation in the structured design. This made the company to enter in the whirlpool of the tough times. It did not listen to the voice of the new generation which wanted new funky and cool bodies within the budget.

It must have brought something new along with its old long bodied models. The old mindsets of the old people did not let the new blood to bring the things of the modern time in the design. It kept on emphasizing the strong body structure and did not give any importance to the increased sale of their competitors which won the hearts of the customers through the light and smart cars. This made GM to face a big failure in the business and the result was that it lost its market’s major part.

It did not keep head in senses while making big deals with the foreign companies and did suffer a great loss. It made GM to pay heavy plenty when FIAT implemented the condition and forced GM to buy its remaining shares which was a written part of the deal. The business analysis reveals that a company must accept only those conditions upon which it can have implementation if they come across. GM board of the directors might have never thought that the big deal could bring the worst nightmare in its history of the business and could make it very close to the bankruptcy.

The most important factor which involved was the ignorance of the voice of the market by the company. It did not learn anything from the previously crises which many times brought the company down in the market. The best of the business is not to repeat the mistakes. Market is never your father’s home and never lets you to have plenty of time of repeating errors and finally getting corrected. It is like do or die, either you are in the market or you are out is the simple principle of the market and those who fail to fulfill it become a victim as GM exactly presented.

A great number of GM lovers were disappointed at the not changing slogan of the company’s policy. Brokenheartedly they shifted their interest to the “wanted ones”. GM could never have been able to bring this majority back to its platform. This was a mistake of a moment which made GM to suffer for a whole decade.

GM case is very symbolic when having a business analysis; it shows how one’s strategic plans bring profits at one time and the disaster at the other time. The policies remain the same, only the time changes which demands a change of attitude.

By: Ammarah Khan


Leave a Reply