The culture of General Motors: China

Company Review – General Motors

Problem Diagnosis

General Motors was diversifying rapidly and it opened its subsidiary in China. The culture of General Motors collided with Chinese organizational culture and this lead to the employee strike at the unit.

(Garry Dessler, 2004, Pg 465-479.)

There is employee resentment among the employees of General Motors and the supervisors are highly de motivated and never train the employees. At this situation, the organizational structure has to be changed and the supervisors must be promoted to an executive cadre and the entire organization structure has to be rephrased.

The Clear plan is to change the organizational structure and also to develop an organizational culture at General Motors accepted by both management and the employees. The paper concludes by proposing a change model for General Motors in China.

Redesign the organizational structure at General Motors

General Motors can adopt a mix of Matrix Structure and Team structure in its operations to solve the employee problems. Using a Matrix structure, General Motors can have dual lines of authority and this ensures the efficient management of employees with proper work schedules and the supervisors can focus on training new employees and the employees can be managed by creating self managed teams with team leaders for each department. The cost of adopting this structure is the benefits of other structures and weakness of these structures.

Cummings & Worley, (2005) describe these organizational structures.

The Matrix structure is characterized by dual lines of authority and combines product and functional departmentalization. IBM adopts a modified version of the matrix structure in its overall operations. The strength of this structure lies in its ability to facilitate coordination and efficient allocation of specialists. The major disadvantage lies in the confusion it creates, its prosperity to foster power struggles, and the stress it places on individuals.

The Team structure uses teams as the central device to coordinate work activities. Companies like DaimlerChrysler, Saturn, Motorola and Xerox have made extensive use of self managed teams to improve productivity at the operational level while in smaller companies; the team structure can define the entire organization. For instance, Imedia, a 30 person marketing firm in New Jersey is completely organized around teams. This structure is highly unsuitable for large companies.

Develop an Organizational Culture at General Motors

When a culture is developed, most of the problems will be solved among the employees.

The cultural variables that will affect team communication and interaction are Employees themselves, Low Formalization, Empowerment, Good listening skills, Role clarity, Managerial Action, Selection, Training and Socialization, Structural design, Leadership, Performance Evaluation and Reward Systems.

Nature of the workforce: The workforce nowadays is highly diverse composing of culturally diverse employees. This is an era for professionals and they make the change certain. There are many new entrants with inadequate skills to match the traditional way of practicing the work. So, the work has to be changed to the changing workforce.

Technology: Technology is the important aspect forcing change. Nowadays, technology has been growing in leaps and bounds and organizations must change rapidly to keep pace with the changing technology. The main reasons for technological development are faster and cheaper computers, new mobile communication devices and deciphering of the human genetic code. It has become mandatory for companies to monitor the advancements in technology and update themselves with the recent technology.

Economic Shocks: A lot of economic shocks like the rise and fall of dot com stocks, decline in the value of Euro and the collapse of Enron Corporation lead to change.

Competition: A healthy competition ensures change to a large extent. Companies change over a period of time to stay in the competition and maintain their position in the market. Nowadays with the global competition, companies compete globally and change to the prevailing conditions in the changing world.

Social trends: The changing social trends like internet chat rooms, retirement of baby boomers and increased interest in urban living etc. has led to change in work culture and standard of work. Organizations change themselves and produce products and services catering to the social trends.

World Politics: The free trade agreements and nuclear deal between nations and other important world politics will lead to a great change in the operations of the companies with a technology transfer between companies and nations

In the case of General Motors, the major drivers of change include Nature of the work force and Social Trends. These issues have to be addressed primarily to bring a change.

Cummings & Worley (2005, page 490).

Individual resistance to change

Garry Dessler (2004) state individual sources of resistance to change reside in basic human characteristics such as perceptions, personalities and needs. Individuals resist change mainly due to the following reasons:

Human beings are creatures of habit and heavily rely on habits or programmed responses for decision making. When a change occurs, the habit has to be changed which will act as a source of resistance and people with a high need for security are likely to resist change because it threatens their feeling of safety. When a new automatic machine enters the company, employees tend to lose their jobs and resist the change. The concern that changes will lower one’s income is another source of individual resistance. For example, the introduction of quality management makes it mandatory for every employee to learn statistical procedures. This will cause resistance as most employees think they will be not able to do so. So individuals are guilty of selectively processing information in order to keep their perceptions intact and they ignore information that challenges the world they have created.

Strategies to manage Organizational culture

Change has become a way of life for most organizations. Pressure from increasing competition, globalization, technological developments, and other forces has created an environment that rewards an organization that are capable of identifying trends and issues and responding quickly to them. Change is the only permanent thing in this world and when organizations change there are many forces of resistance against the change and culture is one of the important forces of resistance. (Randy L. Desimone, Jon M. Werner and David M. Harris, 2005, Pg. 225 – 239). HRM Techniques play a major role in changing the organizational culture. The major Interventions used in bringing a change include Human Processual, Techno structural, Socio technical systems and organization transformation. The various HRM Techniques include Action research, Organizational development, Sensitivity Training, Survey Feedback, Process Consultation, Team Building, Inter group development, Appreciative enquiry.

Randy L. Desimone, Jon M. Werner and David M. Harris, (2005) include the following interventions to bring an organizational culture change.

HR Interventions for Organizational culture change

Interventions are mainly focused on changing the culture through changing employee behavior, Organization structure, Infrastructure and change with the external environment.

Human Process Interventions (Group and Individual Human Relations)

These interventions are directed at improving inter personal, intra group, and inter group relations in a culturally mixed workforce and bring a change in the individual’s beliefs and attitude to suit the organizational culture and they also focus on helping members of the organization to enhance themselves, each other and the ways in which they work together in order to enhance their overall organization.

Techno structural Interventions (Structures, Technologies, Positions)

The purpose of techno structural interventions is to improve work content, work method, and relationships among workers and lower costs by replacing inefficient materials, methods, equipment, work flow designs and costly unnecessary labor with more efficient technology and these interventions might also be useful in new organizations where internal operational systems must be developed and implemented.

Human Resource Management Interventions (Individual and Group Performance Management)

The following activities aim to enhance overall organizational performance by improving the performance of individuals and groups within the organization and Performance is in regard to setting goals, monitoring progress to the goals, sharing feedback, reinforcing activities to achieve goals and dissuading those that don’t. Some of the techniques include Employee Performance Management, Employee Development, and Employee Wellness Programs.

Strategic Interventions (Organization and Its External Environment)

The following activities focus especially on the organization and its interactions with its external environment, and often involve changes to many aspects of the organization, including employees, groups, technologies, products and services, etc.

These are the various strategies and HRM techniques that can be adopted to bring an organizational change breaking the resistance to change from culture.

Change Model Recommendation for General Motors

The following model (Randy L. Desimone, Jon M. Werner and David M. Harris, 2005) serves as a framework for brining a change in the behavior of an individual at General Motors. According to the model of planned change, the first stage is selecting the change intervention. Organizational transformation and Organizational Development are the famous interventions involved in bringing a change. Organizational transformation is aimed at bringing a change in the management, changing the vision, purpose and mission of an organization. Organizational Development is aimed at changing the work setting. Both the interventions finally attempt to change the behavior of an individual.

The second part of the model shows the relationship between change interventions and organizational target variables. In this stage, various variables to be changed are identified.

The third part of the model focuses on the types of individual cognitive change. A cognitive change can occur at various levels:

• Alpha Changes are possible when there is a change in the skill level of the employee.

• Beta changes are possible when there is a change in the work setting.

• Gamma (A) changes are possible when individuals perceive a change in the configuration of an existing paradigm, without the addition of new variables. Change from a cost containing company to a total quality concern which is characterized by a change in the process of the work.

• Gamma (B) changes are possible when individuals perceive a replacement of one paradigm with another. At this stage, the entire change has occurred and has been accepted successfully.

The fourth and final part of the model focuses on how individual behavior changes can lead to two possible outcomes – improved organizational performance and enhanced individual development. By applying this model, the behavior of the employees can be changed at General Motors, contributing to the overall development of the organization.

Reference:

• Cummings & Worley, Organization Culture and Change , 2005, page 490

• Garry Dessler, Human Resource Management, Eastern Economy edition. Pg 465-479.

• Randy L. Desimone, Jon M. Werner and David M. Harris, Human Resource Development, Pearson education. Pg. 225 – 239

• Stephen P. Robbins, Organizational Behavior, Tenth Edition, Prentice Hall of India. Pg. 425-446, Pg. 523-535.

CHANGE INTERVENTION ORAGANISATIONAL INDIVIDUAL ORAGANISATIONAL

TARGET ORGANISATION OUTCOME

VARIABLES MEMBERS

Organization Transformation (OT)

Organization Development (OD)

Vision

• Guiding believes and principles

• Purpose

• Mission

Waking

• Organizing arrangements

• Social factors

• Technology

• Physical setting

Improved Organizational Performance

Enhanced

Individual Development

C

O

G

N

I

T

I

V

E

C

H

A

N

G

E

S

Alpha

Beta

Gamma

(A)

Gamma

(B)

Behavior change

Source: Randy L. Desimone, Jon M. Werner and David M. Harris, Human Resource Development, Pg. 573

Proposed change Model for General Motors.