Motors Corporation Case

No one could have imagined it. After all the years, many thought it was toobig to fail. Yet, On June 01, 2009, General Motors Corporation (GM) filed forchapter 11 bancruptcy protection, the second largest industrial bankruptcy inhistory (Worldcom was the largest). GM, which had not made a profit since 2004,declared its filing that it had US$ 172 billion in debt and US$ 82 billion inassets. As any competent business student could tell you, that ratio doesn'tmake a balance sheet balance, especially when the company's equity is worth alittle.

Fritz Henderson, who was named CEO of GM on March 30, 2009, was a numbersguy, but he knew the company's culture had to change. His vision of the neworganizational culture had to change. His vision of the new organizationalculture revolved around four guidelines: risk taking, accountability, speed,and customer-product focus. The problem was that GM had tried before toreinvent itself, with mixed success. "GM's past is littered with the buzzwordsof culture change......It has struggled with to impose cultural change acrossthe highly bureaucratic company in which brands, departments, and regionsoperated like self-governing and competing states within federation. "But GMsExecutives said, this time would be different. After all, there was the bankruptcyand the selective eliminationof of entrenched leadership. Were things reallychanging, though?. Despite his well-intention plans, Henderson was fired by theboard on Deecember 01, 2009. Some felt he wasn't radical enough to change thecompany. His replacement was the person appointed by the Obama administration'scar czar to oversee the automaker's revival after bancruptcy. Ed Whitacre, thewell-respected retired chairman and CEO of AT&T.

The challenges Whitacre faces in changing GM's "plodding"culture are vast.A recent meeting of the CEO and other top executives illustrates why. Themeeting was called to approve plans for a new generation of cars and trucks.Before the executive could go through all the pictures, charts, and financialprojections they had prepared, Whitacre stopped them to ask why they werehaving a meeting in the first place. "Y"all have checked all this out prettythoroughly. I imagine you are not going to approve something thats bad orunprofitable, so why don't you make decisions?. He let the plans stand andsuggested that the Group disbands its regular Friday sessions. And it's notjust the top executives who did this. In the past, event minor decisions weremulled over the committee after committee. Whitacre's trying to change that.Pushing authorirty and decision making down into GM's multilayered organizationand slicing away at the bureaucracy are big parts of the cultural changesWhitacre is attempting. Changing GM's entrenced corporate culture isn't goingto be easy, but it is necessary if GM is going to become the automotive