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Understand Organisational Structures
Impact of recession on car production
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In the observation of Sergio Marchionne and the Chrysler group there were many things that needed to change within the organization to make it survive not only the recession but the future in a competitive leading edge automobile industry. There were a couple of observable artifacts, and a Hieracicial framework that may have led Chrysler into bankruptcy. It is still not clear if Chrysler has changed the Vision statement for the organization, but after a review it is clear that it is customer focused. I found it interesting that Mr. Marchionne did not purchase Chrysler, it was a Government agreed merger with Fiat (“Fiat, Chrysler and Sergio Marchionne,” n.d.) Sergio Marchionne was able to change the culture and combine two companies in two countries and managed to boost sales and profit. (Clothier, n.d.) The Chrysler Company had observable artifacts such as the executive tower set apart from the engineers which indicates a Hierarchical Value framework. This is where everyone below the CEO is subordinate to someone (Colette L. Meehan, n.d.) With this structure there is middle m...
General Motors became a “centralized organization, so decision-making authority is concentrated in the hands of top-level managers, and little authority is delegated to lower levels” (Ferrell et al., 2015, p. 199). Centralized organizations have little upward communication and top-level manager may not be aware of problems and unethical activities. According to Ferrell et al., (2015), it has been noted that “centralized organization may exert influence on their employees because they have a central core of policies and codes of ethical conduct” (p. 201). Conversely, to survive at GM employees praised the CEO intelligence and carried out their orders by keeping a low profile, and never made waves. GM rewarded employees who followed the old traditional ways and those that challenged their thinking lost promotion opportunities or their jobs. However, General Motors experienced conflict between corporate management responsibility and social responsibility. Consequently, General Motors “attempted to implement a new mentality upon its management in a short period of time” (Goussak, Webber, & Ser, 2012, p. 49) by changing the company’s environment, but
In the latter part of 2008, the United States’ economy was rapidly plummeting - the stock market crashed, the housing bubble burst and gas prices skyrocketed. The majority of U.S. based firms faced the reality that they would not be able to survive during such desperate economic times. The U.S. automobile industry, in particular, began to buckle under the depressed economy. The government stepped in proposing a multi-billion dollar bailout to stimulate the economy and restore economic balance. The possibility of this unprecedented government intervention was condemned by many economists. If the government helped the ailing automotive industry, this industry would have to tighten their expenditures and plan for the future to prove to critics of the bailout that they would use the government funding to add value to the economy once again.
Observable artifacts can consist of physical manifestation of an organizations culture. Observable artifacts can be things such as a manner of dress, awards, myths, published list of values, parking spaces, decorations and so on (Kreitner& Kinicki, 2013). One of the main observable artifacts that Chrysler had and the reason Marchionne was upset, was because he did not like the way Fong doubled rebates on cars in order to increase sales. Although Fong’s intent was to bring profit to the company it back fired and caused the company to lose a great deal of money as a result. Another observable change was Marchionne moving his office to the warehouse and not being in the executive part of the building. Espoused values represent the explicitly
This paper will focus on the future of the U.S. Automobile industry as the United States recovers from the worst recession we have experienced in the past 75 years. I will provide information on the following topics pertaining to the U.S. automobile industry:
In 2009 when Sergio Marchionne took over one of the Chrysler plants had around 200 workers and by the end of the summer over 4500 people were employed; at that location alone. During his 60 minute interview Mr. Marchionne gives a lot of acknowledgement to his employees crediting them for the successful turnaround in the company. This shows us that he is the type of leader who would motivate through the positive reinforcement theory because his positivity in the comments to his employees shows that he isn’t taking full credit for all the work that was done and the success that has happened. When Mr. Marchionne became CEO of Chrysler he moved his office down where the engineers work on the 4th floor. “No need for a top-floor penthouse, which sits empty where a chairman and three vice chairmen used to be, when a fourth floor office will suffice.” (Allpro.com). This was one of his first step in creating change of direction in a company which was used to being lead by leaders who didn’t fully engage with the employees. Another point to mention, and a result of his close contact with the engineer, is that the engineers were performing for him and were able to get a brand new car model designed and produced in less than a year; which proves his leadership style works. In order for a great leader to get this kind of effective cooperation from his employees shows his skills in leadership. By giving them positive reinforcement and being a motivational leader with high hopes with an optimistic vision for the future he was able to get them to perform and meet his standards and goals in a short allotted amount of time. This constrictive timeframe was strategic in reentering the automotive industry with a new product to boost sales and pro...
Achieving world class business performance is a major challenge in today’s society. Manufacturing companies continue to face increased competition and globalization from its competitors. (1, p. 148). The automotive industry is one of the most volatile manufacturing industries that we have, which was evident in the 2008 – 2010 automotive industry crisis. (2) This global financial downturn served notice to the American automotive manufactures to raise the bar, in order to achieve word class business performance. General Motors, one of the country’s largest automotive manufactures, had to receive a government bailout to survive. During this time many with the corporation asked themselves, if we were a world class business, would we be facing this pending crisis. The answer was a resounding “NO”. General Motors has come out of bankruptcy and is focused on being a world-class business organization.
General Motors is one of the world's most dominant automakers from 1931. After 1980s economic recession the main goal for automobile companies was cost reduction. Customers became more price-sensitive. Also Japanese competitors came into market with the new effective system of production. So market was highly competitive and directed toward price reduction. The case states that in 1991 GM suffered $ 4.5 billion losses and most part of the costs of manufacturing was due to purchased components. GM NA hired Lopez in order to find the way from "extraordinary" situation and reduce costs.
Managing ‘up’ “…means consciously and deliberately developing a meaningful task-related, mutually respecting relationship with one’s direct superiors” (Daft, 2015, p. 196). De La Vega should have strived to gain a clearer understanding of what his role would be as the ‘day-to-day’ operational leader. He could have employed the five principles of followership to establish a successful relationship with Bussard as CEO. The CEO failed to ‘manage up and down’ the hierarchal scale of his own organization as a leader and would not relinquish power. The CEO was dependent upon De La Vega to be his key “point man” in day-to-day operations. The follower-leader relationship is important to both the leader and the follower because “…Leaders of higher organizational levels depend upon their subordinates for information, support, and assistance in accomplishing the organization’s goals” (Daft, 2015, p. 197). Had the principles and strategies of effective followership, combined with the desirable followership traits of “cooperation, honesty, dependability and competency” (Daft, 2015, p. 211) been utilized by the CEO and COO, the outcome of the case study would have been
Detroit was once the mecca for workers pursuing the American dream. In the early 1900’s an innovative inventor named Henry Ford brought mass production of the automobile to this area, turning Detroit into a beacon of opportunity and economic success for many. This Automotive Industry has been at the base of Detroit’s economy for decades; however, it’s not like it once was. During the 20th century the auto industry had many high and lows. Many factors lead to the recent downturn of this industry that led to mass layoffs and displaced workers, which had a negative impact on Detroit, as well as the United States economy.
In my research paper I would like to explore how different the markets, as well as union greed and board member mismanagement contributed to the failure of General Motors in 2009. I will take a close look at the collapses of the American Housing market in 2007 as well as the how the price of gasoline nearly doubled in 2008 and what roll those played within GM’s bankruptcy. While exploring these different markets, greed and mismanagement I intend to illustrate how they factored into what could be called the “perfect storm” toppling the Automotive Giant and leading to its
Sergio Marchionne was successful at changing the culture of Chrysler. He was involved; he reinforced innovation and focused on customer satisfaction. He chose a management team with the ability to handle extreme responsibility and gave them the authority to make important decisions. By doing this he cut through the bureaucracy that can sometimes slow down the process of making important business decisions.
Looking at IKEA’s organisational structure, the chain of command shows a clear line for messages within functional departments, so therefore; it leads to good communication. For example, looking at the organisational structure of IKEA, there is a clear communication within a human resources department. However, the chain of command is very long from the top to the bottom of the organisation because, there are too many levels of management. This will lead to poor communication. For example, it takes decisions a long time to reach the workers at the bottom of the organisation structure.
Hierarchical structure and society assume an imperative part for empowering inspiration and imagination in any association. Hierarchical structure and society are additionally imperative determinants of authoritative achievement. Customary structures were extremely progressive in nature, importance force streams vertically and upward, however today's associations are inclining towards compliment structures in view of adaptability of control over specialists. The significance of the pecking order is underscored firmly by Drucker, who states 'One hears an extraordinary arrangement today about "the end of the progressive system. This is outright garbage. In any organization there must be a last power, that is, a "manager" – somebody who can settle on the last choices and who can anticipate that them will be complied" (Drucker, 1999, p.
According to Parkinson’s Law the growth in the number of managers and hierarchical levels is controlled by two principles: (1) “An official wants to multiply subordinates, not rivals,” and (2) “Officials make work for one another (Parkinson 14).” Hence, managers are building an empire for themselves, a tall hierarchy. The higher the empire increases, the higher the managers position become in the organization.
Through Dupont analysis, we have been able to see the specific strengths and weaknesses of BMW and Audi’s management. BMW’s lower profit margin and asset turnover indicate less efficient cost management and asset management. Their debt multiplier indicates that they’re taking advantage of debt, but the benefit of this isn’t realized because of their problems with cost and asset management. Due to Audi’s more efficient use of their assets, and better cost efficiency, it can be said that their management has performed better than BMW’s over the past year.