General Motors Corporation (GM) is an internationally recognized, global enterprise based in the United States. The company was founded in 1908, and has some of the most recognizable names in the world including; Chevrolet, Hummer, Buick, Cadillac, and Pontiac. Measured by global sales GM was the world’s largest automotive manufacturer for 77 years, until the 2009 financial collapse, and subsequent bankruptcy and government bailout caused major restructuring throughout the company. GM then lost the global sales title in 2010 to Japanese auto manufacturer Toyota, although both GM and Toyota are likely to be ousted this year by German manufacturer Volkswagen (Bloomberg, 2011). GM has had to reevaluate the company’s organizational structure for financial solvency, and to gain a foothold against strong competition expanding into the US and developing markets abroad.
The Company’s Traditional Structure
The old GM historically had a Vertical organizational structure. The rigid hierarchy may have contributed to some of the problems they faced as globalization increased competition. GM had many different companies centralized and all tied to the GM name. This created many redundancies in management, and this reflected in the products. Both Chevrolet and GM each made a van, the Astro and the Sierra. For all intents and purposes these vans are identical, but they were manufactured by two different companies under the General Motors umbrella. The higher levels of management decided what was required for all subordinate levels, and that was a one way street. The CEO’s, CFO’s, and top executives made all decisions for middle management down to the individual dealerships. Executives even decided what customers desired, with no feedback from customers, dealerships, or operational level managers. When the economy began to slow GM did not reduce production in response. As the customer base shifted to smaller, more economical cars GM still pushed for...