The Crisis Management And Controversy Today Is General Motors

GM is described as an organization with a dysfunctional company culture that somehow still manages to have amazing results in its work, on a global scale. The key attributes of GM, were primarily in the changes initiated by Mary Barra after the GM ignition switch recall crisis. Some of those attributes include her willingness to openly acknowledge the undesirable aspects of the GM culture and her efforts to take action towards a resolution. There are also several noticeable strengths and weaknesses within the organization. One of the biggest weaknesses is the company’s repeated inability to acknowledge that, lack of functional culture and leadership are truly the root cause of the company’s issues. Based on my reading I would describe the current behavioral organizational model as a Custodial Model. I chose this model because the managerial orientation is money, employee orientation is security and benefits and performance results are passive cooperation. All of these attributes were described in the reading.

Watching this video the first thing I noticed was the fact that GM was a bureaucracy. “A formal organization with a hierarchy of authority and a clear division of labor; emphasis on impersonality of positions and written rules, communications, and records” (Henslin, 2015, p. 136). One of GMs hierarchies, Roger Smith, used his power to lay off tens of thousands of people in the city of Flint. This is also a clear display of a bureaucracy, in showing how very impersonal and disconnected he was from his workers.

GM was given the opportunity to make radical changes and regain its market leadership, they failed. The Saturn was introduced, but has recently closed its doors.

Effective crisis management is vital for a company to maintain good relations with stakeholders and to protect their corporate reputation. However, due to the volatile nature of communications, many corporate communication practitioners struggle to implement appropriate crisis response strategies. When Turing Pharmaceuticals increased the price of the life-saving drug, Daraprim, drastically in 2015, it was met with severe backlash. External stakeholders like the public and medical professionals were not convinced that the price hike was justified despite Turing’s attempts to manage the situation. This case study examines Turing’s crisis response strategies and how it failed to successfully overcome the crisis.

In order to explore how a crisis worker would approach, assess, and treat a crisis situation, this paper will focus on the story of Melody, the victim of a brutal rape. Melody Swanson is a 50 year old, divorced teacher who has been living alone since her children went to college two months ago. Melody came home from a short vacation to the casino and was met in her driveway by an armed man in his twenties. She was abducted at gunpoint, beaten, raped, robbed, and left abandoned several miles from her home. Melody was able to find help and was

12/28/2017: Crisis Session was conducted in Spanish. Stephanie and her family arrived to NJCC for a crisis session. Stephanie informed this CIS that she was raped by her friend’s boyfriend. Reporting assailant is 19 years old and Stephanie is 15 years old. Stephanie reported guilt from the incident due to leaving her house to hang out with reporting assailant (R.A.). Stephanie informed this CIS that the reporting assailant was consistently calling her and she finally agreed to hang out with him. Stephanie reported that she was raped in his car and now every time she sees his car she begins to feel anxious. The incident took place about 2 weeks ago.

A number of car incidents have been associated with the errors in the ignition switch, which could possibly disable the airbag, the power steering and breaks. Due to this issue at least 13 deaths and numerous injuries have been found (Isidore, 2014) with the General Motors Company. This investigation was given to an engineer in Florida, Mark Hood, to file for a lawsuit against General Motors and to try to figure out what was the cause of these accidents. It was revealed that the tiny metal plunger in the switch was smaller than the original size and needed less force to turn the ignition off (Isidore, 2014).

Under the Bush Administration, General Motors and Chrysler auto companies were stuck in a situation that had 2 options; get a loan, or file for bankruptcy and lose 3 million employees. Due to the carelessness of General Motors CEO’s and the failure to create a viable business plan were the reason why they must make this choice that could affect millions of people worldwide. General Motors and Chrysler went to President Bush to look for a loan where Bush then went to the Troubled Asset Relief Program, (TARP) to lend General Motors 9.4 billion and $4 billion to Chrysler. The loan of $13.4 billion (Ikenson) lasted long enough for General Motors and Chrysler to get the next future president convinced that they were worth funding. Although he admitted there was not a viable business plan, President Obama was convinced through the fear of traditional bankruptcy and he decided to help fund General Motors and Chrysler. The Obama Administration decided to have the taxpayers pay for 60% of General Motors and 10% of Chrysler. Obama told a group of General Motor workers, “Your survival and success of our economy depended on making sure that we got the U.S. auto industry back on its feet.” (Ikenson) The greatest concern of the auto bailout is the consequence that could affect people worldwide - “the undermining of the rule of law, the property confiscations, the politically driven decisions and the distortion of market signals” (Ikenson)

With General Motors participating in a federal government bailout and becoming debt-free, it has set the future standards very high (Kinicki & Williams, 2013). Increasing the profit margin by 4% to provide a 10% profit margin would set GM ahead of other automobile industry competitors. The bailout also released GM from federal corporate taxes for several years in the future. This in itself is a tremendous cost savings.

Since the financial crisis of 2008 the SEC’s mission has been to protect investors and win back the trust of the public in capital markets. In efforts to combat fraud and preventing another financial crisis, the SEC has grown their staff and is working on revamping their technological capabilities. For the last 3 years we have seen aggressive enforcement, strategic reforms and new regulations with in the division.

The compact Chevrolet Cruze also had a worrying fire-related recall, which affected every single model sold. Missteps like these seem to be common for domestic automakers. (1)

General Motors, at one point the largest car manufacturer in the world, needed a bailout in 2009 to stay in business. One of the main reason the auto giant filed for bankruptcy was seen on the balance sheet where assets were $82.2 billion and a vast amount of liabilities that equated to a whopping $172 billion. With this massive amount of debt hanging over the company, General Motors according to the Economist, “the chief financial officer sought to raise $3 billion through a sale of bonds or shares,”(Economist Editor). After Lehman Brothers had fallen GM knew that they would not be able to get the funds, so they tried to sell non-core assets,(Economist Editor). At this point, the stock price for General Motors fell to $3, (Economist Editor).

On April 1st, 2014 in Washington D.C., General Motors (GM) Chief Executive Officer Mary Barra testified in front of a panel of senators regarding the company’s late delay in addressing a defect in ignition switches, causing cars to lose power and injuring or killing the drivers. While GM has issued a recall on cars that are known to have this defective product, the problem lies in the delay of action on the part of GM, who are accused of knowing about the defect as early as 2001.

What is a crisis management? It is an unexpected crisis that happens on the company that will affect the trust and loyalty of the stakeholder. It can be extremely costly because it will affect the company reputation and brand. For example like financial failure from poor business management, workplace violence, fires, cybercrime, computer viruses, product tampering or union strikes and other external issue like damaged economy that causes from London bombings, terrorists attacks on 11 September and others. The SHRM 2005 report indicates that only 56% organizations created or revised their disaster preparedness plans but 45% did not after the terrorist attacked on

Here is the final version of the crisis management strategy report which was commissioned by yourself on Monday 5 May 2014.