The Management of Change of General Motors (GM) and Dell - Essay Example

? The Management of Change [Supervisor Organizational Change: The organizational change is a constant procedure of remaking the ideas and approach of the organization by shifting the tactical routes and operations of the organization. This change assists the organization to enhance its potential with the greater monetary returns and its plan to meet the changing conditions and requirement of the clients. The main element that the organizations should look into before making any changes is to decide the future goals and objectives of the business and to see that how the resources should be implemented in order to make the change successful without the resistance of the employees at all the levels of the organization structure (Andersen, 2011). The Necessity for Organizational Change in Global Business: The adjustment for the changing goals and the customer demand has become a big challenge for the organizations to meet the global competition. This job has become more difficult and complicated for the organization because they are not sure that their employees can handle and cope up with the change or not. In the sector of profitability, the growth of global market and shift in political situations has made a way for the new markets of products and services that is never seen before in the corporate sector. In response to this changing pace, the organizations are adopting simple and reactive structure in which the culture is such that it empowers the employees and teamwork is the main driving force. Because of this changing environment, the employees expect that they will be involved in the decision regarding the organizational change. The flourishing organizational change depends on the support and interest of the employees and without their support; it is not possible for the organizations to successful change (Appelbaum, St-Pierre, & Glavas, 1998). General Motors (GM): General Motors is a US based company founded in 1908. With the passage of time, the company becomes the biggest car manufacturer of the world that has the highest market share and more than 300000 people are working for General Motors in 120 countries around the globe. The company faces its first big complexity in 80s when the market position and share of the company falls due to change in demand of the customers and increase of competition from the car manufacturers of Japan (GM, 2012). Reason for Change: Previously, the company made many efforts to overcome the decline of sales, bad brand image, declining market share and some other reasons but most of those changes effort were failed due to communication gap between the top management and the employee’s and also because of the poor management. In 2009, the company was in extreme financial crises and the US Government would impose bankruptcy if the company will not be able to pay its debt. The new CEO fritz Henderson focus was to restructure the company within 2 months in order to save the company from bankruptcy. The company granted the financial and time aid from the US Government in order to exist as a company and payoff all the debts. The global recession made the company in financial crises and the management failed to overcome that pressure (Andersen, 2011). The basic reason for change is to improve the competitiveness of the company by cutting down the number of employees working and to decrease the other brands that General Motors owned. In addition, the company wants to change its overall structure by making it less bureaucratic and cut off the layers of management that is unnecessary for the company. This way the company assumes to save money and to the decision-making speed will also increase. The second point that the company decided was to change the culture of the company that would help to improve the market focus. This meant that the company would build the cars that are according to the requirement of the customers. This will help the company to see a definite path and help to come out of the financial crises that it was facing (Smerd, 2009). Dell faces some resistance from the employees because many of the employees have seen failure in the past regarding the changes in the company, therefore it was necessary to make them feel comfortable about the upcoming strategy of the company. The company followed the Lewin’s-model in which the employees were given the reason about the company need for the change and what is the main reason that the company need to restructure its overall business. The company also informed the employees about the changes and non-changes in this process. In addition, the company informed the employees that why this effort of change process will become effective, as the other efforts failed in the past (Smerd, 2009). In the change process, GM informed its employees about a four-step plan that will help the company to improve in four areas. The three steps were regarding the improvement of financial condition in terms of the cash flow and profitability with the help of operational restructuring. The fourth step was to improve the competitiveness of the company by manufacturing the cars that fits in the market place (General Motors Company, 2009). Change Management Process: The flourishing chain management process is based on the ITIL practices, which states to decrease the spontaneous work to the percentage of entire work down to 25% or less. The organizations that are in an emergency mode can increase this percentage to 65% or higher. To achieve this percentage, GM will increase the productivity in which the changes are not under the control of the management. Change management refer as the process that is responsible for managing the complete lifecycle of the changes in organization and enables to make beneficial changes with minimum interruption to the services of IT (General Motors Company, 2009). The purpose of the chain management program of General Motors was to make sure that all the techniques and procedures used in order to handle the effective handling of the changes so that the impact of confrontation upon services can be minimized (General Motors Company, 2009). The foremost purpose of this process was to take the changes of the organization with the set of processes that are controlled and organized. General Motors pursue the following objective in order to make the changes properly. In order to manage the chain process, the company defined its operating concepts inside the model of global multi-vendor. The company defines the business model comprehensively and performance-reporting metrics were made for the employees so that they can evaluate the performance of the company and judge their own performance. The company defined its integration with the other disciplines and employees were explained about the initiative that the company was taking regarding the change. General Motors decided to leverage the processes that were running at that time and improve the change made by ITIL and procedures were release that helps the management to understand the complete dynamics of the change procedure. Company decided to align with its other processes that were running in the different areas. The benefits that the company was hoping to get from this change management process are as follows: The company can get better and improve approximation of the changes that were proposed. The better information of management regarding the change is obtained that will help the company to detect the areas that were creating problem for the company. The change process management will help the company to increase the productivity of the employees by providing them more stable and useful services. The visibility of the company will increase and the changes of communication to the business will help General Motors to implement the changes more effectively. With the help of the change management process, the company will be able to improve the risk assessment (Smerd, 2009). Problems and Successes: General Motors’s corporate culture and financial problems pushed the company in the period of crises and in 2009, the company had to fire 50000 employees that was equal to 20% of its workforce. The economic crises of the company were expected in the supply chain that includes the freezing of credit market, industrial base loss, and huge amount of job losses. The Government of US announces a bailout package for the company so that it can improve its economic conditions. The company faces a lot of resistance from the employees that were fired from the company and was criticized for the huge downsizing. In addition, the employees working for the company were afraid of their job security that was making a ciaos in the company (General Motors Company, 2009). With the constant efforts of change and with the help of the change management process, the company is able to improve after the bankruptcy and company made important financial and operational progress in 2010. The company is moving with the increased speed, liveliness, and changes implemented very quickly. General Motors is making very strong relationships with the employees, dealers, partners and stakeholders that help the company to come out of huge crises and help them in the toughest time (General Motors Company, 2009). The company is able to make a strong culture after the bankruptcy and the hierarchy of the company suggests that bureaucracy prevails in the culture of the organization. The top management and the employees have made good relations with each other and there is strong coordination between them. The brand image of General Motors is improving as the company is striving very hard to achieve its desired goals. New cars and technologies are introduced that is helping General Motors to improve the public image. The market share of the company is getting better and the shareholders have started to trust the company again, hence the share of the company in the last year has also increased tremendously. The new General Motors is smaller company as compared to the past and it has four brands in the US. Due to changes, the company is focusing on its dealers and building a winning combination with the employees by making the labor agreements with the different unions of the company. After the bankruptcy, General Motors is growing very rapidly throughout the world and 70% sales of the company come from outside the US (GM, 2012). Conclusion: General Motors could not save itself from the bankruptcy and the company fails to come out of its financial crises, but changes that the company made for the improvement are paying off now. The culture of the company has changed a lot after the bankruptcy and the employees are working collectively to improve the overall condition of the company. Dell: Dell was founded on a simple basis to sell the computers directly to the consumers and the company could understand the need of the customers and proficiently providing the solution to fulfill those needs. Dell is the most important supplier of products and services that are necessary for the customers globally in order to build the IT and internet structure and until now, it is best and leading brand name in the computer industry throughout the world (Dell, 2012). Reasons for Change: The reason for change management in Dell was to follow a stable growth for becoming a wide market leader in the computer business and the vision of the company is to renew the organization to secure the business growth in a continuous manner and to increase the profitability of the company. Mainly there were four reasons that the company wanted to make change that include: 1. The company was making efforts to reach the leading position in the attractive market. 2. The company wanted to concentrate on attaining a competitive share in the market segment of the mobile computing. 3. The company was working to improve its overall efficiency and wanted to cut down the costs of operations that were increasing rapidly. 4. The company wanted to make careful acquisitions in order to sustain the continuous growth and wanted to create value for the shareholders (Laster, 2005). Change for staff: Dell felt that the employees play an important role therefore the company took the responsibility to motivate them in order to make them work more efficiently. Building a strong communication with the employees was important because they are the best ambassadors of the company so the company wanted to give them relevant information regarding the changes in the company. The consistency of information was necessary for the employees because if the company would not give them the appropriate information, then there was a chance that the change process will fail (Dell, 2012). Change for System: There was a time when the company generated the first surplus due to the cut down of the activities forced by the management. In this change process, the company felt needs to be given attention so that the company to confirm the huge profit of the company. The consultants of the company gathered the data, which reveals that there was a big gap between the staff and the requirement of the customers. The staff was not able to understand the actual need of the customer that led the company to make the changes in the system and make it a customer oriented rather than staff oriented (Laster, 2005). Change of Strategy: The hierarchy of Dell was changed to a flatter and slim organizational structure, five departments of the company were directly reporting to the company, and Dell made eleven centers for profit. The aim of that changed was to improve the communication gap of the staff and the top management of the company. The management also introduced a pay, related to good performance to motivate the employees and the change includes the big investment to provide the good facilities of IT to meet the needs of the customers (Drechlsler, 2011). Change Management Process: The US retailers represented the biggest marketing and sales channel that include the national and regional stores of supply and merchants. The company had made changes in the product development and the distributors of Dell represent the United States second largest channel that sells the products of Dell to both the retailers and resellers of internet and traditional market. The company was doing the product penetration by using its online store as a place to sells the products. This task was accomplished by the company with the help of the campaigns of e-marketing and product bundles. The company was also building awareness of the products through the media advertising, public relation attempt and branded properties of internet. The company received the feedback from the customers with its research of market and then uses the feedback for further improvement of the development of product efforts and strategies related to marketing. The company also made a strategy regarding e-commerce, which helps to increase the sales online, and gave the business class an innovation that increases the customer satisfaction (Dell, 2012). The customer model of Dell solved the problems of the customers by adding more capital for the marketing and sales. The advantage of selling the product directly to the customer was that it eliminates the profit margin of the retailer and this way increases the margins of the company. The advantage that Dell got from the change management process was that it made the company and the customers close to each other that benefited Dell in two areas concerning marketing and trends of the sale to meet customer demand (Dell, 2012). Leadership: Michael Dell was the youngest CEO of Dell only at the age of 27. The present leadership style of Dell is the transformation leadership in which Michael Dell inspire his employees to work for the betterment of the company. He was also close to the customers and there was no intermediaries and middleman between him and the customers. It is the acheivement of Michael Dell that Every Dell system is built to order and customers get exactly and only what they want. He is role model in the computer industry and his name will always be taken with the pioneers of the computer revolution. A leader should not only act as a management leader he should be like a team leader who is also a good observer, flexible, problem solver, loyal to the team, unselfish, clear in his opinions and resouceful. If all these qualities are combined together, a leader is made who is role model for his employees. The team members follows the role model to become successful leaders for the future and that helps the organization to achieve its targets more successfully (Appelbaum, St-Pierre, & Glavas, 1998). Problems and Successes: It is seen that the major problem that the Dell faces was regarding the management changes that are unplanned and the employees are not satisfied with the change process. The employees of the company gives the impression that these changes are imposed by the company to them and they are not feeling comfortable regarding the management decsion of change. Another problem that the company faces is the lack of knowledge of the management about the usage of the management systems and the strategic management and they are not able to implement this properly in Dell. The communication in Dell is very important because being the biggest in the business, it is very necessary for the company to make interactions with the employees. Motivation of Employees in the Change Process: The inspiration of the workers is compulsory, as they are tentative in the change process because of the uncertainty of losing their place and role in the organization. Motivation is important in the changes that are planned by the organization because the employees may not accept the decision of the management and can represent the organization in a wrong or negative way. Because of this motivation is the neutralizer that result the serving of the customers with the passion that is required and business is handled in the right manner. Rewards and recognition of the employees are the techniques of motivation that can be given to the employees in order to make them comfortable and happy in the change process (Drechlsler, 2011). Internal Controls: In order to make sure that the company’s functions are working efficiently and attaining the outcome competently, there have to be some dimension and control instrument that should be implemented in the internal control. These can be classified into formal and informal control systems. Formal controls is divided into three types. Process systems of control force the management and organization to work in the exact direction for accomplishing the complete objectives lay down in the reason of statement. The managers implement formal control systems whereas the employees themselves initiate the informal controls in order to raise their motivation levels. The output control systems makes sure that the promotion efforts are executed in right way and serving the organization to get the objectives. Marketing audit is the third type of formal controlling of the company processes. These systems of control are not only applying at the start of the operational actions, but are employed throughout the business system (Pickett & Pickett, 2001). Conclusion: The changes made by Dell were for the betterment of the company and Dell tried hard to change its organizational structure by implementing many changes in its hierarchy. The company made the changes due to the increase competition globally and it wanted to capture the maximum market share of the computer business. However, not all the changes made by Dell were successful and few of the changes made by the company did not satisfy the employees. In addition, the change made by the company could not help to become the market leader but the company is still one of the top companies in the world List of References Andersen, K. 2011. Communicating Change at General Motors. New York: ASB, Language and Business Communication. Appelbaum, S. H., St-Pierre, N., and Glavas, W. 1998. Strategic Organizational Change:The role of leadrship,learning,motivation and productivity. Management Decision , 36 5, 289-301. Dell. 2012. About Dell. [Online] Available from www.dell.com: [Accessed on Febriuary 19, 2012] Dell. 2012. Dell Change Management. [Online] Available from www.dell.com: [Accessed on Febriuary 19, 2012] Drechlsler, A. 2011. Employee Resistance:Identification of recommendations on how to manage the discrepance between te employees need and requirement. Norderstedt: GRIN Verlag. General Motors Company. 2009. This is the New GM. Detroit: General Motors. GM. 2012. Company: History and Heritage. [Online] Available from [Accessed on Febriuary 19, 2012] Laster, P. 2005. Managing Change. Texas: Power Solutions. Pickett, K., and Pickett, J. 2001. Internal Control:A Manager's Journey. New York: John Wiley and Sons. Smerd, J. 2009. GM’s latest model. Workforce Management , 88, 1-34. Read More