How the Leadership and Organisational Culture Drive Creativity and Innovation of the Company - Case Study Example

Innovation and creativity by General Motors

Abstract

General Motors has gained a huge reputation as the American multinational company serving a large number of customers across the globe. The vision and mission statement of the company indicates that it has the sole motive to satisfy customers and earn a huge profit. Therefore, it collects feedback from the customers regarding the products that it offers, such that it can incorporate the required features in its future innovations. The study has revealed that the company maintains a good relationship with the suppliers who are responsible for providing raw materials at reasonable rates. Further, the employees of General Motors are trained for better customer relationship management so that they are able to gather knowledge regarding the needs of the customers. As per the study, the culture followed with General Motors motivates the employees to deliver better performance. The research and development team within the company helps in undertaking innovation such that the company is able to set up its brand reputation in the global market. On the contrary, high competition among the automakers in the world market has posed a threat for General Motors to lose its market share. Therefore, it is recommended that General Motors should focus on the high end customers in order to earn a greater profit.

Table of Contents

Introduction4

Mission and vision of General Motors4

Linkage of culture and innovation in General Motors5

Product development process of General Motors7

Innovation strategies used by General Motors8

Risks undertaken by General Motors during innovation process9

Recommendations10

Conclusion11

Reference List12

• Introduction

General Motors is an American multinational company that has its headquarters in Michigan and the company designs, manufactures, markets as well as distributes vehicular parts (Yu and Hang, 2010). The company does its business in around 120 countries and has employed 215,000 employees (Markides, 2013). General Motors aims at satisfying the demands of the customers by manufacturing innovative cars that are likely to capture a large market share. The company is found to manufacture high valued trucks, cars and crossovers for its customers (Markides, 2013). Further, it provides a wide range of vehicles that are able to meet consumer demands.

General Motors undertakes better customer relationship management, so as to understand the requirements of the customers (Martin, 2009). Innovation is brought in by the organisation through diversity in their workforce. The employees belonging to different cultural backgrounds are able to provide ideas related to the betterment of the organisation. Further, the highly skilled workforce within General Motors is responsible in improving the performance of the company, such that it is able to gain a competitive advantage in the international market (Markides, 2013). The paper aims to focus on the strategies undertaken by General Motors, in order to bring in innovation in the global market. Further, it also provides the researcher with a scope to study the risk taking process by the company.

• Mission and vision of General Motors

The mission statement of General Motors is as follows.

"G.M. is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stock-holders will receive a sustained superior return on their investment" (Siteseen Ltd, 2015).

Further, the vision statement of the company is provided below.

"Over the past 100 years, GM has been a leader in the global automotive industry. And the next 100 years will be no different. GM is committed to leading the industry in alternative fuel propulsion" (Siteseen Ltd, 2015).

The corporate strategy of the company suggests that satisfying the customers is their only motive and their purpose is to invest in brands that are on high demand in the global market (Standing and Kiniti, 2011). General Motors aims at bringing in technological innovations within their vehicles in order to serve the communities which they live in. The corporate strategy of General Motors also suggests that it aims to be the most valued automotive company in the world. The mission and vision statement indicates that, the company aims at training the employees for undertaking better strategies which would improve their performance in the global market (Standing and Kiniti, 2011). This indirectly depicts their work culture, where the employees work in a team to implement new ideas while designing different vehicles.

• Linkage of culture and innovation in General Motors

Desouza et al. (2009) argued that the company aims at creating long lasting relationship with the customers and the suppliers and therefore trains employees with good communication skills. The training programs arranged by the managers of General Motors; are such that, it encourages the employees to share their own views (Desouza, et al., 2009). Further, the employees are trained to deal with challenges that are faced by the organisation in global market. According to Ettlie and Rosenthal (2012), the company has taken initiatives to strengthen their relationship with the suppliers. The strategic supplier engagement program undertaken by the company lead to open communication as well as technology sharing. The suppliers are ready to supply the raw materials at reduced rates and deliver technology in the areas of fuel efficiency and safety that have become the key competitive elements (Ettlie and Rosenthal, 2012).

Moreover, Briody, Meerwarth Pester and Trotter (2012) argue that the company also assesses its suppliers on the basis of two board areas. Initially, it focuses on the business performance, cost, quality, containment and supply chain efficiency and secondly, it emphasises on the cultural performance. It involves effective communication, transparency as well as innovation. Furthermore, General Motors has reshuffled its management team recently, by hiring people who are more committed to the needs of the customers (Briody, Meerwarth Pester and Trotter, 2012). The new management team; has been able to develop multi-skilled flexibility such that, there is cooperation among the team members and they are able to overcome the challenges. Employee engagement is another strategy that the company has undertaken in order to motivate the employees to participate in the production process. As per Balmer (2009), the team leaders within the organisation assign different tasks to the employees based on their abilities and the employees are provided with the opportunity to utilise their skills. It brings confidence among the employees and they are able to deliver better performance in the field of innovation.

Alberti and Giusti (2012) argued that there are different subcultures in the form of divisions within the organisation that relates to the manufacturing and marketing segments. Further, the company has many domestic as well as foreign subsidiaries that follow unique subcultures. As per the study, the culture followed in General Motors is different from that of its competitors. When the company opened its subsidiaries in Mexico and America, the managers were provided with language and culture training, in order to bring in workplace diversity (Balmer, 2009). The training offered to the managers of General Motors, have helped them to act as better team leaders, who are able to understand the requirements of the team through communication with the team members. As per Balmer (2009), General Motors is known to carry out better supply chain management, as it has created the three pronged strategy with the help of internet technology. The strategy involves using internet in order to design, build and buy innovative vehicles.

• Product development process of General Motors

According to Alberti and Giusti (2012), General Motors relies on supercomputers to develop and test vehicles before launching them in the global market. The state of art computing platform used by the company helps them to shorten the time spent to bring the vehicle in the market and reduces the structural cost of the process (Alberti and Giusti, 2012). The new supercomputer introduced by General Motors has doubled its computing capacity and it is considered as the fastest machine by the automotive industry.

Further, the company has merged 11 different engineering centres in the US, in order to enhance their product development process (Sun, 2010). General Motors owns global architecture development team that are responsible for manufacturing the non-visible parts of the vehicle. In the opinion of George, McGahan and Prabhu (2012), the global teams work in collaboration with the regional development teams, who are responsible for interior designing of vehicles. The company has developed advanced propulsion technologies as well as raised the use of light weight materials which are considered to be more fuel efficient (Markides, 2013). General Motors’s transformation is driven by a strategy that leverages electricity, biofuels and hydrogen fuel cells (George, McGahan and Prabhu, 2012). The company has also introduced a variety of new engines and transmissions that apply advanced technologies necessary to reduce the fuel consumption. Further, the hybrid models of vehicles have been introduced by the company that provides the customers with a wide range of options (General Motors, 2016).

• Innovation strategies used by General Motors

General Motors has used a new innovation process in order to attract the customers in the global market which is based on the sense-respond-learn approach (General Motors, 2016). The team leaders of General Motors initially gather data using market surveys on the customers and incorporate the customer feedbacks while developing a new technology (Ettlie and Rosenthal, 2012). It is the responsibility of the research and development sector of General Motors, to develop the technology.

Figure 1: General Motors R&D sense-respond-learn model

(Source: Ettlie and Rosenthal, 2012)

According to Lin (2011), the innovation process followed by General Motors is designed to be dynamic, as new information goes into the system continuously. The company has created its own action plan for the short-term as well as long-term innovations in the international market (Ettlie and Rosenthal, 2012). The short-term strategies involve establishing centralised research and development structure to control the costs incurred by the company for conducting research and development (Lin, 2011). The company has also taken an initiative to sell some of the unprofitable brands, in order to improve its overall competency. The long-term strategies involve the creation of joint ventures with other outside vendors, so as to gain new technologies.

Further, Lin (2011) argued that the employees are trained by the managers of General Motors to carry out better customer relationship management and hire more skilled labour force. The managers of the company communicate with the customers in order to gather knowledge regarding the market trends and have created a database in order to evaluate the purchase intentions. According to Alberti and Giusti (2012), on measuring the purchase intentions of the customers, the employees of General Motors are highly motivated in carrying out better innovations within the organisation.

• Risks undertaken by General Motors during innovation process

George, McGahan and Prabhu (2012) argued that, General Motors has faced financial as well as reputational risks while carrying out its business and therefore, the company has used the derivatives in order to hedge the risks. While undertaking an innovation process, there are cases when General Motors has entered into an agreement with the suppliers; due to which, the company had to often get trapped in the foreign currency risk and commodity price risk. According to Alberti and Giusti (2012), risk management control system is used by the company in order to monitor the hedging program. Further, there are weaknesses in the financial reporting processes of the company and lack of internal control is likely to further affect the financial condition. Therefore, General Motors have hired a separate management team in order to take care of the internal control and undertake appropriate financial reporting. There are high possibilities that the hybrid cars manufactured by General Motors, may fail to create a lasting impact in the international market. General Motors has faced a huge competition from other automakers such as Ford, Toyota, etc., which have been successful in manufacturing high quality cars in the global market (Lin, 2011). However, the managers of General Motors have created their own strategic action plan, to set up their brand reputation in the international market. The company has undertaken the process of strategic procurement, innovation marketing and advanced development of the vehicles. In order to gain a competitive advantage, General Motors has focused on both product innovation as well as process innovation (Lin, 2011). Therefore, the unique strategies followed by the company in manufacturing its vehicles, segregates it from the rest of the automakers. Moreover, Balmer (2009) observed that the corporate culture maintained by General Motors has encouraged efficient employees to retain in the organisation for a long period.

• Recommendations

Although General Motors has been able to set up its business successfully in the world market, there are several risk factors that are faced by the company. In order to avoid competition in the international market, General Motors can focus on manufacturing cars for the niche market. Majority of the competition is in the mass market, as there is a high demand for cars by middle-class customers. However, designing luxury cars would provide the company with higher profits as there would be a lack of competition. It should also diversify its products and focus more on manufacturing hybrid buses that can reduce air pollution as well as vehicular pollution by carrying a large number of passengers at a time.

• Conclusion

General Motors is considered as the market leader in the automobile industry and it has acquired a huge customer base. The company aims at satisfying the customers by providing them with quality cars that are fuel efficient. General Motors has a customer focused mission and vision and it plans its corporate strategies in favour of the customers. Based on the research, the company is found to operate in 120 nations and has been able to design products according to the needs of the customers. The corporate culture within General Motors supports the innovation process and it has its own team of engineers who are capable to designing innovative vehicles. In order to overcome the challenges, the company follows its own product development process that would help it to gain a competitive advantage in the world market. However, risks are faced by the company while undertaking product innovation such as lack of internal control. Separate risk management control system, has been adopted by the managers of General Motors in order to overcome the financial risks.

• Reference List

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Balmer, J.M., 2009. Corporate marketing: apocalypse, advent and epiphany.Management Decision, 47(4), pp. 544-572.

Briody, E., Meerwarth Pester, T. and Trotter, R., 2012. A story's impact on organisational-culture change. Journal of Organisational Change Management, 25(1), pp. 67-87.

Desouza, K.C., Dombrowski, C., Awazu, Y., Baloh, P., Papagari, S., Jha, S. and Kim, J.Y., 2009. Crafting organisational innovation processes. Innovation,11(1), pp.6-33.

Ettlie, J.E. and Rosenthal, S.R., 2012. Service innovation in manufacturing.Journal of Service Management, 23(3), pp. 440-454.

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George, G., McGahan, A.M. and Prabhu, J., 2012. Innovation for inclusive growth: Towards a theoretical framework and a research agenda. Journal of management studies, 49(4), pp. 661-683.

Lin, L.H., 2011. Electronic human resource management and organisational innovation: the roles of information technology and virtual organisational structure. The International Journal of Human Resource Management, 22(02), pp. 235-257.

Markides, C.C., 2013. Business model innovation: what can the ambidexterity literature teach us?. The Academy of Management Perspectives, 27(4), pp. 313-323.

Martin, D.M., 2009. The entrepreneurial marketing mix. Qualitative Market Research: An International Journal, 12(4), pp. 391-403.

Siteseen Ltd., 2015. General Motors. [online] Available at: <http://www.makingafortune.biz/list-of-companies-g/general-motors.htm> [Accessed 24 May 2016].

Standing, C. and Kiniti, S., 2011. How can organisations use wikis for innovation?. Technovation, 31(7), pp. 287-295.

Sun, P., 2010. Five critical knowledge management organisational themes.Journal of Knowledge Management, 14(4), pp.507-523.

Yu, D. and Hang, C.C., 2010. A reflective review of disruptive innovation theory. International Journal of Management Reviews, 12(4), pp. 435-452.