Executive Decision Making at General Motors

1. Executive Decision Making at General Motors David A.Garvin Lynne C. Levesque

2. index Intro Ⅰ. Alfred Sloan’s GM : Revving up Ⅱ. Coasting Toward Collision Ⅲ. Getting Back on a Common Track Ⅳ. ASB : The matrix in action Ⅴ. The Future of GM’s Basketweave Structure Comments

3. Intro

4. 1908 설립 • 1904-1920 태동(B.Durant) by 인수합병 • 1920-1950 구축(A.Sloan) • 1960-1980 위기(1980년 7억6천만$ 적자) • 1980-1992 잘못된 구조조정(R.Smith) • 1992-2001 새로운 GM(J.Smith) • 2002 대우 인수, 안정기

5. 지엠의 리더들 • Durant • J.Smith • R.Smith • R.Wagoner • Larry Burns

6. Ⅰ. Alfred Sloan’s GM : Revving up • 1908. Billy Durant 설립 -첫 번째 자동차 재벌그룹(복합기업) -산업내에서 첫 번째 수직통합형 회사 (by. M&A-25개의 회사들) =>GM culture : internal competition, duplication were tolerated and encouraged 1920 Alfred P. Sloan,Jr. 임명

7. 1. Strategy 1) Pricing pyramid “a car for every purse and purpose”

8. 1. Strategy 2) Commitment to innovation -annual vehicle changes -high compression -overhead value v-8 engines -premium gasoline -chrome tail fins -fully automatic transmission -new financial product ‘General Motors Acceptance Corporation subsidiary’

9. 1. Strategy 3) International diversification 1925 began to exporting cars purchased ‘Vauxhall’-British vehicle firm 1929 ‘Opel’-Germen operation 1931 ‘Holden’-Australia firm

10. achievements More than one-half of the vehicles sold in USA The first Fortune 500 ranking 1956 the first company to net more than $1 billion

11. 2. Structure Multidivisional structure Divisions aggregated into groups. -new one in American business - reduced the nuimber of direct reports to the CEO ->CEO to focus on guiding the broad policies of the enterprise

12. 2. Structure ①Management Committee role: ultimate responsibility -resource allocation -spending authorities -planning GM’s future resided member: the top officers of the company except Group executives ②Policy group -policy setting -supporting decision-making

13. Multidivisional structure *to maintain a delicate balance *M.C., P.G ->Coordinated control in the decentralized organization

14. 3) Policy and Decision-Making Process P.Gs 달마다 표준과 정책결정 위해 모임 -plant design, specifications, new technologies, grades for materials, labor contracts, HR pay policies... -No formal authority but, expected to carry out the policies set Senior managers, Sloan 미팅 참석, 반대의견 등 논쟁 유도 ->Senior manager들을 더 넓은 이슈로

15. 3) Policy and Decision-Making Process • As profit centers, the division developed their own plans and forecasts • Hall mark of Sloan’s GM • Analytical decision making at all management levels • “the figures did not give automatic answers to problems” • ->ROI 등으로 성과 측정

16. Results • 수익증대 • Balance 위해서는 환경변화 필요 • Senior Management “horns of a delemma”

17. Ⅱ. Coasting Toward Collision • 1960s~1990s • 환경변화 ①increased competition ②tighter governmental regulation&standards ③proliferation of car models and platforms -1970’s oil crisis -> fuel-efficient car but, 빠른대처하지 못함

18. 1. Strategy • 부적절한 대처 →homogenization of cars across the divisions ≫brand confusion • Revenue보다 cost에 집중 • Arrogance and insularity • What was good for our country was good for General Motors, and vice versa

19. 2. Structure • In the 1960s, 1970s • Cost and product proliferation →more centralized assembly division • But, not enough • Because of changes in vehicle structure • Changes+lack of cost competitiveness =new organization with two car group (a dacades later)

20. 3. Policy and Decision-Making Process • 1980’s reorganizaion • →slowed down decision making by adding a new layer of required review • P.G. -recommending Companywide Policies To support Particular positions Existing divisional management review -Lining up needed votes before meetings -Arguing over transfer prices and overhead allocaions -Attending pre-meetings to eliminate surprises at the regular meeting

21. 3. Policy and Decision-Making Process Larry Burns Wagoner ≫문제 있다!! Jack Smith • 1990’s “dinosaur” “death spiral” “inexorable decline”

22. Ⅲ. Getting Back on a Common Track • 1992 and Beyond • 1992 J.Smith as CEO • P.G 없앰 • 2개의 Vehicle groups 폐지 • M.C→five member president’s Council • Reduced the corporate staff • Closed the executive dining room

23. 1. Strategy • Market share ↓↓ • To overhaul processes • Reduce overlapping product lines • Eliminating similar • Often competing • Models • Developing common Sys. For product manufacturing, design and development • Speeding up • Bringing more discipline to the Decision Making Process • Streamling the bureaucracy • Eliminating the interdivisional competition

24. 2. Structure • Restructuring! • ⅠⅡⅢⅣⅤⅥⅦ①②③④⑤⑥⑦ • ∴ • →≫↓

26. What’s ASB? • You win by knowing when to push a little more global, and when to push a little less global. That’s the “race to the middle” and it’s a tough assignment. • -G.Richard Wagoner,Jr. • Matrix organization(J