This report reveals an research of the objective statement of General Motors as well as its key business functions. In addition, it illustrates how the key business functions integrate with the information systems and our ideas and recommendations to the people processes that would better suit Standard Motors.
The report also identifies environmentally friendly factors which have an effect on the business in terms of political, economical, communal, ecological and scientific factors and the impact these factors have had on General Motors and the strategic diversity the business has had to adopt to accommodate these changes.
Finally the article explores ways about how new information systems can help Standard Motors create great efficiency by automating and streamlining parts of its business procedures. The article concludes by adding our suggestions of appropriate information systems for every single department within the business.
General Motors is the world's largest automaker with 386, 000 employees in over 50 years. Despite this sheer size, its car sales have declined from about 60 percent of the U. S. vehicle market in the 1970's to only 28. 3 percent today. This drop is related to stiff competition from Ford, DaimlerChrysler and the Japanese most of whom enjoy lower production costs, have a reputation for vehicles with better styling and quality than Standard Motors.
General Motors adoption of your vertically integrated corporation which at one time made up to 70 percent of its parts, as a ability way to obtain competitive advantage, empowered the company to develop cars at lower costs than its competitors. However, over time, these policies worked in favour of General Motors competitors who have been then able to make automobiles at much lower costs because they could purchase their vehicle parts from exterior sellers and also great deal on costs.
For the past 15 years, Basic Motors has battled to overcome the above legacy, inefficient product processes and a large number of out-of-date information systems that cannot communicate with each other. Although the business has become much leaner and more efficient by shedding off tens of thousands of workers, closing a large number of plants and squeezing costs of motor vehicle parts by scouring the globe for the lowest prices much still needs to be done.
It is our recommendation that Basic Motors use Internet and other leading-edge information systems technology to reconstruct its entire value chain, transforming itself into a customer-focused business that delivers many different digital services to consumers as well as automobiles.
General Motors objective statement states that "GM is a multinational corporation involved in socially liable operations, worldwide. It really is focused on provide products and services of such quality our customers will obtain superior value while our employees and business associates will share in our success and our stock-holders will get a sustained superior come back on their investment".
We analysed the aforementioned mission declaration using Druckers five questions namely:-
What is our business?
Who is the customer?
What is the worthiness to the customer?
What will our business be?
What should our business be?
We arrived at the conclusion that there was a need to modify General Motors objective statement since the above questions were not fully exhausted. The current mission statement does not reveal that GM is a producer of automobile; neither will it consider the Global Sullivan Concept. As the marketing tool, it generally does not mention that it is dedicated towards providing products and services to customers who are targeted in 200 different countries.
Our recommended Standard Motors mission statement should read the following:
"GM is a multinational developer of automobiles engaged in socially responsible businesses worldwide and focused on achieve the best in every element of our business. Beneath the aspects of Global Sullivan Principles, GM is focused on provide products and services of such quality our customers who are targeted in 200 different countries will acquire superior value while our employees and business companions will share in our success and our stock-holders will receive a sustained superior go back on their investment".
Key business process is defined as the execution of some activities that interact to make a well defined set of products and services which contributes to the achievement of your measurable business consequence. They also signify unique ways in which organisations coordinate work, information, and knowledge, and the ways in which management chooses to coordinate work.
Although each organisation has its own group of business processes, a great many other business functions are cross practical, transcending the restrictions between sales, marketing, making, research and development. These cross efficient processes cut across the traditional organisation composition, grouping employees from different functional specialities to complete a piece of work.
Information systems can help organisations achieve great efficiencies by automating parts of these procedures or by aiding organisations rethink and streamline these processes. By integrating these processes, organisations may become more focussed on productive management of resources and customer services.
Suggestions and tips of key business processes
Manufacturing and Production
Assembling the product, checking for quality, producing bills of materials
Sales and Marketing
Identifying customers, making customers aware of the product, retailing the product
Finance and Accounting
Paying creditors, creating financial statements, controlling cash accounts
Hiring employees, evaluating employees' job performance, enrolling employees in benefits plan
There are three factors which experienced made General Motors in this example. Firstly, america market is not progressing cost their U. S. sales projections for 2008 have been too rosy. "GM had been planning on more than 16 million vehicles, including pickup trucks and buses, to be sold this year" (Taylor III 2008). Second, intense competition from their global competition such as Honda, Nissan, and Hyundai which possessed produce better energy efficient motors, stylish at a much lower price compared to any GM brands. Finally, the world's petrol price had risen to USD 120 per barrel in the market possessed made consumers not to acquire vehicle and using general population transportation or smaller vehicle. In the United States, "consumers want to get away from their less-fuel-efficient vehicles for smaller autos, and that's illustrated by a variety of fads, said David Tompkins, executive director of industry solutions for Edmunds. com, father or mother of Car Observer" (Buss 2008) (send appendix 2).
Balance Score Greeting card is a performance way of measuring indicator that can be used to measure the financial and non finances generally Motors. You will discover four parts; financial perspective, internal business point of view, customer's perspective, learning and growth perspective. Balance Rating Card is similar to your autos dash panel where there is indicator on as you drive, you can look at the dashboard to obtain real-time information such as how fuel, speed and the length you've traveled or even any faulty system etc. "It's recognized to help companies and put into practice the changes necessary to meet their business goals" (Pangakar & Kirkwood, 2007). The balance score card enables the companies to build up a more detailed view with their operations and to better match all operating and investment activities to long- and short-term tactical objectives (Punniyamoorthy & Murali, 2008).
The lack of USD38. 7 billion is an enormous financial loss which in fact will affect the inner business process, the client, and expansion of GM. The huge damage was largely added from deferred duty charges and drop in sales. Currently, the business financial perspective seems to the share holder is a decrease where "GM shares fell almost 5 percent, or USD1. 67, to USD34. 48" (Bunkley N. 2008). Thus to control this losses, thousands of workers are let go from duty. This will affect their inside business process and may lead to dissatisfied customers. For instance, usually Standard Motors takes 1 week to deliver an automobile to a person. When they decided to retrench workers they'll lose their competitive advantage where now it requires 2 weeks to provide an automobile. This may cause dissatisfaction to consumers because they have to wait an extra week to obtain their vehicle. In the end, the learning and growth perspective cant' be achieved because the lack of resources will disable them to remain competitive in the turbulent environment lead to drop in sales.
To ensure that Standard Motors can effectively achieve its balance credit score card in the foreseeable future, they must cope with their exterior environment concern concisely. They need to improve thru their interior process and learning and development to beat their competition concern. Standard Motors have to turn out with new design and technology to raise the product line. Research and Development expenses need to be spent so that they could create better vehicle then their opponents. How exactly to create better vehicle than the rivals? This can be achieved by purchasing the technology using their competition or similar industry. For instance Proton got acquire Lotus in the year 1996 possessed made them competitive at that point of the time. When this happen, employees should be train thus it can raise the knowledge of the workers. Using cases, staff will be dispatched oversea for such training to acquire technology. Workers could be more effective and consequently increase productivity in General Motors.
Like a proper oiled machine, every part in the organization performs best when all of them work at a standard goal. All of the four perspectives in the balances score greeting card works together thru their significant objectives, options and initiatives. As stated above, to make sure that General Motors can make revenue for the huge amount of losses they need to increase production, more expenditure on research and development etc. In General Motor's case, financial perspective is the key technique for the other three perspectives. For Standard Motors, the training perspective can work alongside the sales department to train and mentor the sales staff or even expanding new efficient production, training equipment. To improve on the customer scorecard they could do research by research of their existing customers about how to boost customer connections. Customer retention is essential aspect ignite potential buyers to increase sales. It ensures repeat purchase, increase positive person to person and reduce cost to find new customers.
Balance Score Credit card will "ensure individual capital development, enhancing employee satisfaction and increasing employee determination" (Kaplan & Norton, 1992) in General Motors.
Link of each perspective in the Balance Score Cards (BCS)
High performance work system (HPWS) is also another solution to explain the situation generally Motors. Autonomous work teams, available systems and performance-based pay are known collectively as high-performance work systems (Rouse, 2000). HPWS have also "come to be known as high engagement work systems, flexible work systems and high commitment work systems" (Aghazadeh & Seyedian, 2004) In other words, they are simply just work practice that can be deliberately introduced to be able to improved organizational performance The main emphasis of HPWS is organizing work so the employees take part in decisions that impact the everyday functions of a business. You will find three potential factors that can affect powerful work system generally Motors; retrenchment of workers, technology used and layout design.
A employee is the main element success to any firm. Retrenchment may cause General Motors to lose talented workers consequently lose competitive border. To survive in the changing environment, a firm must rely on their workers creativeness, ingenuity problem fixing capacity and strong team work. Workers have the ability to make their own decision on how to complete their work. The knowledge and skill shared will create a high performance work system. For instance, an engineer generally Motors is creating a fuel efficient engine. Engineer A might need assistants from Engineer B, but when GM decided to retrench personnel, Engineer A will face difficulty in producing the engine unit. Performance of employee can be boost thru team works. A report by Thompson, Baughan and Motwani shows that company such as Basic Electricity, Proctor & Gamble, Xerox Company had surge productivity up to 250 percent and increase their income (1998).
The use of technology is another feature in POWERFUL Work System. All managers in every division of Standard Motors must be able to identify the technology they use in their firm. The application of Human Tool Information System that can store home elevators workers that can help managers in deciding which worker is carrying out and which is not. The use of technology without human operating it is also meaningless. Managers generally Electric motor must identify if the qualified workers have the ability to operate the tools or not.
Layout of Standard Motors production plant life and office be required to properly design to allow them to increase workers performance and output. This calls for careful job planning by HR managers. According to Aghazadeh and Seyedian, layout plays a job to ensure success by using space, people and equipment effectively, increasing the stream of information and materials, increase employee's morale and absolutely encourage versatility (2004). Managers in General Motors may have to turn out with proposals to change the existing layout to a improved, sustainable working layout.
If every one of the three factors are considered, General Motors can recover from their huge financial deficits just and can avoid retrenchment of employees. Although to execute HPWS is costly, uncertain success and frustrating but in the long term this can advantage Basic Motors.
Training and development programs should be given to worker to ensure increase in productivity. Offshore trained in Japan car manufacturers to learn various solutions to make better automobiles.
Mangers must make research and real human resource thinking about the best methods to execute a particular activity.
General Motors would need to find a partner to form a proper alliance to recuperate from the huge financial damage. Out of this alliance, both companies are potential to study from the other person on the technology and trade secrets.
Develop a module which to help retrench personnel to find a new job. This will likely prevent them from paying more income for their settlement of retrenchments
Outsource to countries like China or India. Cheap labors will gain companies to recuperate them from financial loss.
Create a reward programme where employees are compensated by their managers predicated on their ability to work in a group
Create a speak to all employees at least one time in three months to explain the business's eye-sight, strategy and purpose. This can make employees feel a sense of belonging and could have the ability to work extra for the business.
Sheer size and market share make new entrants an unlikely to be always a threat
Vertical integration of GM will not encourage acquisitions from suppliers hence they lose out on price bargaining
Ford, DaimlerChrysler and Japanese manufacturers have better styling and quality; a strategy which GM should think about adopting to sustain its competitive edge
Cost of GM automobiles is regarded as being too high
Buyers are nowadays willing to buy sport power and pickups that are not manufactured by Basic Motors
GM enjoys a wholesome product line and segmentation in rates and functions
Using information systems at each part of the company creates great efficiencies by automating and streamlining elements of the business. We recommend the next information systems at each department within Basic Motors:
These are systems that maintain worker records, track employee skills, job performance and support planning for employee settlement and profession development.
Track employee training, skills and performance appraisal
Designs career paths for employees
Monitors the number and circulation of employees salary, earnings & benefits
Human Resources Planning
Plans the long-term labour drive needs of the organization
These are systems that keep an eye on the firm's financial assets and fund moves.
Track outstanding debts
Designs portfolios investments
Prepares short-term budgets
Plans long-term profits
These are systems that help the firm identify customers for its product or services. They also help develop product or services that meet customer needs, promote and sell them as well as providing ongoing customer care.
Enters, procedures and tracks orders
Identifies customers and market segments using data on demographics, market segments, consumer behaviour and trends
Determines prices for products and services
Sales and Forecasting
Prepares 3-5 yr sales forecast
These are systems that deal with planning, development, development of products and services and managing the stream of development.
Controls the activities of machines and equipment
Designs services using the computer
Decides when and how many products should be produced
Prepares and determines where to find new development facilities
In addition to the info systems described here above, we also recommend the next office automation systems:
E-mail System: Improve GM's inside and exterior communication, creating a highly effective and reliable service
Word Handling System: Office system technology that facilitates the creation of documents through computerized words editing, formatting, storing and printing
Document Imaging System: System that converts documents and images into digital form in order to be stored and utilized easily by the computer
Timesheet System: - Enables employees to fill in the timesheet forms online so that management can approve and observe the timesheet online.
Whilst it might be make a great deal of business sense for an organization like Ford to close down more crops and accept a smaller part of the U. S. market this strategy would not work towards GM because then your company would produce and sell fewer vehicles, indicating less income for those big pension and health-care costs. GM has to maintain its cashflow to pay these costs until another date when it's hoped that older people retirees diminish in quantity whilst also creating improvements in quality, efficiency, design and brand appeal.
Although GM has cut the time to put together a car from an average of 32 time in 1998 to a day in 2003, Japanese rivals are still faster in getting new models into the market. Honda's new vehicle development routine is only 14 weeks and the business is working towards compressing development time down to twelve months. GM should understand this as an issue to adopt and strategise with a view to improve its development circuit to match its competition if not exceed them.
Whilst these recommendations provided are meant to help GM sustain its market talk about, they can not be fully liked until they are put to check and the results obtained critically analysed to generate room for alterations where necessary and where suitable.