Case Study

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Business & Finance
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Question description

Case Study – General Motors

It’s been a rough ride for General Motors. In 2008, GM’s remarkable run of 77 years as the world’s largest automaker came to a crashing halt. In 2009, after a decade of mismanagement and declining sales, the company declared bankruptcy and needed a massive government bailout and thorough reorganization to stay afloat. During that time, more than 2,000 dealers were closed for good, and almost 23,000 employees were released. There is some hope that the new, streamlined GM, featuring new models, will regain its once-dominant position in the U.S. auto market. However, it is becoming increasingly clear that GM’s future may lie in China.

In 2009, there were 13.6 million cars sold in China, an increase of 46 percent from 2008, and nearly 3 million more cars than were sold in the United States at the same time. In 1977, there were just 1 million cars in China; as of 2008, there were 51 million, and it’s conservatively expected that the Chinese auto market will grow 10–15 percent every year. Unlike in the United States, GM hasn’t been stuck on the sidelines in China. It sold 1.83 million cars in 2009, an increase of 67 percent over the previous year, and has a solid record of 15 consecutive months in which its sales have grown by double digits. By 2015, GM hopes to sell 3 million cars per year in China. This would not only make GM the largest auto seller in China, but it would make China GM’s largest and most lucrative market.

Currently, GM operates in China as part of a joint venture with the SAIC Motor Corporation. Through the partnership, GM owns a minority stake in two companies, SAIC-GM-Wuling and Shanghai General Motors. Increasingly, however, you’ve heard your GM colleagues argue that new organizational design is needed, one that will give the company a stronger presence in China, and decrease its dependence on the U.S. market. A group of these managers has come to you to seek out your opinion on how GM can organize to best take advantage of shifting conditions in the global auto market.

Refer to General Motors Case Study for Questions 1 and 2:

1.  The text describes a number of different approaches concerning organizational structure. Which do you think would be ideal for GM’s success in China? Which of the structures would help GM expand to other foreign markets?

2.  What are the advantages and disadvantages of promoting decentralization in GM’s operations in China?

3.  Describe the three types of special teams that do not fit easily onto the team autonomy continuum.

4.  Compare structured and unstructured interviews.

5.  Describe the types of selection tests that companies use to evaluate job candidates.

6.  What is affectivity? Why do managers need to understand affectivity?

Case Study – South Korea

Five years ago, your company assigned you to a management position in its new research facility in South Korea. You were thrilled with the promotion, and grateful to your bosses, who recognized your skills and talents. At the same time, there was a lot to be nervous about—adjusting to a new culture and language, finding a school for your kids and a job for your wife, figuring out where to buy familiar groceries. But even with all the struggles, you’ve thoroughly enjoyed your time in Korea, as you got to learn new things from your employees and teach them new things from your experiences. In fact, you’re quite surprised that you’ve had such little conflict with your Korean associates.

There is, however, one area that you could never quite get a handle on—vacation time. Like every other employee in the company, your employees were given three weeks of paid vacation per year. But, other than the occasional three-day weekend, they never took any time off. At first, you wondered if this was just unique to your company. But then, you saw statistics that showed that Koreans, on average, worked more than 2,300 hours per year, 600 more than the average American. While these long hours show great organizational commitment, they have extremely negative effects. Overworked employees are more prone to stress and physical illness and are less likely to be efficient or productive. Indeed, according to the Organization of Economic Cooperation and Development, an international group comprised of 30 of the world’s largest economies, South Korea ranks near the bottom in terms of productivity.

Even the South Korean government has taken notice of the dangers of overwork. A few months ago, President Myung Bak Lee announced that all state employees would be required to take 16 days of vacation per year. You were quite happy to hear about this policy, and hopeful that it would influence the private sector. But, you also wonder if there aren’t other changes needed. From your conversations with Korean managers, you’ve learned that there is one big reason why Korean employees don’t take vacation time—because their supervisors don’t take vacation time. Even while requiring government employees to take 16 days off, President Lee himself has taken off only four days since his 2008 election. Jin-soo Kim, a director in the Ministry of Public Administration who wrote the 16-day policy, took no vacation time at all in 2008. Even you, the “enlightened” American, remember working through Lunar New Year’s Day, one of the biggest holidays in Korea.

You desperately want your employees to take more time off. It’s what’s best for them, their families, and for the company’s productivity and efficiency. What is the best way to motivate them to take a break?

Refer to South Korea Case Study to for Question 7:

7.  Which motivation theory(s) do you think would help communicate the importance of vacation time to your employees?

8.  How can managers use the basic principles of needs and rewards to motivate employees?

9.  What are the advantages and disadvantages of tying an executive’s pay to the company’s performance?

10.  Describe the strategies managers can use for waste prevention and reduction.

11.   Define leadership and management and explain how leaders and managers approach their jobs differently.

12.  What does it mean when someone says that an organization protects its information? Why it is important to do so? What are the basic steps to properly securing data and data networks?


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