General Motors (GM) is one of the globally renowned companies. Nonetheless, part of the corporation’s fame is its involvement in an ignition switch crisis and the deaths of many people (Kuppler, 2014). Since GM’s organizational behavioral model is autocratic, with the administration being the highest authority, the disaster was due to poor decisions from the upper management in terms of leadership and the establishment of organizational culture. GM demonstrates that an enterprise’s leadership and culture are interconnected and affect all elements of the business.
GM has changed its leadership style (LS) as a result of the crisis. Before the public acquisitions, the corporation maintained autocratic leadership, and the internal processes lacked communication, trust, and a sense of responsibility (Kuppler, 2014). The style can be effective in the short term, but autocratic leaders are quite forceful, restrict workplace socialization, and negatively affect employee motivation (Al Khajeh, 2018). GM must have decided to shift its LS due to realizing that “command and control” management was not suitable in a new world based on collaboration and healthy relationships (Perkins & Arvinen-Muondo, 2013, p. 115). It seems that GM turned to a transactional style to encourage employees to report safety issues in exchange for recognition (Al Khajeh, 2018; Kuppler, 2014). GM had several problems emerging from its upper management and resolved to transform its overseeing approach.
The shift in GM’s leadership style can be explained by the administration’s choices. Some characteristics of the company’s management include prolonged negligence of the ignition switch problem and no sense of urgency or responsibility (Kuppler, 2014). For instance, although many senior executives were aware of the problem, they made no sufficient determinations to resolve the matter because the directors could not decide between clients’ safety and the firm’s expenses (Kuppler, 2014). As a result, the management’s lack of adequate choices had impacted the whole corporation and caused the crisis, which pushed the change of leadership style.
Companies and individuals make decisions based on internal and external influences. The former refers to one’s unique features, and the latter is related to environmental, typically uncontrollable factors (Perkins & Arvinen-Muondo, 2013). GM’s internal facets are reluctance to raise concerns, avoidance of accountability, and conflicting messages from top management (Kuppler, 2014). The corporation’s external aspects are those common to the automotive industry, which, at the time leading to the crisis, were costs that had been increasing since 2001 (Plumer, 2015). Notably, GM CEO Mary Barra stated that the company used to have a cost-oriented culture but, after the lengthy disaster, became more focused on customer safety (Plumer, 2015). Accordingly, GM’s issues and the followed shift in LS were caused by the business’s inability to handle expenses alongside the management’s carelessness and lack of responsibility.
An organization’s leadership style directs superiors’ decision-making, which affects the staff. Perkins and Arvinen-Muondo (2013) suggest that a person’s behavior is influenced by what they perceive in their surroundings. Consequently, since GM’s upper management failed to make appropriate choices, the employees followed the higher-ups’ example and chose not to address important issues (Kuppler, 2014). The relationship between a LS and the process of making decisions can be reflected in how the two influence workers’ conduct.
A company’s internal culture (IC) directs how the employees think and function. Organizational behavior (OB) assesses how individuals act in corporate settings, and culture represents values, practices, and norms that are accepted by the staff and affect workplace processes (Perkins & Arvinen-Muondo, 2013). For instance, unlike prior patterns of ignoring issues and not taking accountability, GM’s present culture seems to be concentrated on customer safety (Kuppler, 2014). Although, in his case study, Kuppler (2014) argues that GM failed to sufficiently transform its culture even after the crisis, some examples of the corporation’s IC include increased safety awareness and centralized decision-making. In particular, considering that workplace culture can influence employee motivation, GM appears to have embraced the job enrichment model, which concentrates on meaningful tasks, responsibilities, and feedback (Perkins & Arvinen-Muondo, 2013). GM’s Speak Up for Safety stimulates employees to report potential issues, thus making the workers accountable for customer protection, and is meant to recognize those who participate in the program (Kuppler, 2014). Overall, GM’s current culture prioritizes safety and influences OB so that each person in the corporation acts for the clients’ benefit.
Insights and Conclusions
General Motors demonstrates a connection between leadership and culture within an organization. The company’s two LS before and after the ignition switch crisis and its IC complement each other because they all affect OB and processes within the corporation. LS establishes cultural values and practices, which employees adopt and use to guide their behavior at the workplace. For example, while GM maintained autocratic leadership, the firm was characterized by a lack of responsibility and solutions to problems. GM’s case study shows that changes in LS and IC can influence each other. It seems that GM adopted a transactional leadership encouraging the workers to be committed to notifying safety issues, which are meant to be resolved through centralized decisions of senior management. By embracing the new LS, GM has established a unique culture focused on the protection of customers. Such a shift can be advantageous as the prior LS negatively impacted the behavior of the employees. For instance, as mentioned above, by seeing that their superiors did not make satisfactory decisions, GM workers chose not to address certain problems. Leadership and culture are connected and affect a business and its clients.
Al Khajeh, E. H. (2018). Impact of leadership styles on organizational performance. Journal of Human Resources Management Research, 1-10.
Kuppler, T., (2014). The GM Culture Crisis: What leaders must learn from this culture case study. Switch & Shift.
Perkins, S. J., & Arvinen-Muondo, R. (2013). Organizational Behaviour. Kogan Page.
Plumer, B. (2015). The GM recall scandal of 2014. Vox.