Downsizing of Gm

In: Business and Management

Submitted By CastealiaCook
Words 4983
Pages 20
|Counting Our Blessings |
|Organizational Re-Structure of General Motors |
|Behavior in Organizations |

Outline I. Introduction II. Definition a. Downsizing b. Restructuring III. Primary Issues (Part One) a. How to Downsize Effectively IV. Company Background V. Primary Issues (Part Two) a. General Motors: Restructuring VI. Conclusion VII. References

Introduction
Over the past eight years, our country has experienced a whirlwind of economic slowdown that has led to the restructuring of the way companies do business today. Gone are the days when corporate merger, acquisition, downsizing, and restructuring were few and far in between. The economic slowdown coupled with ongoing economic uncertainty has led many companies to adjust their organizational operations to a new level of efficiency. Words such as downsizing, rightsizing, restructuring, and reengineering are common vocabulary to corporate businesses of today. Other changes are brought on by the globalization of businesses and changes in the industries and markets. Regardless of the reasons, mergers and acquisitions are likely to continue into the next century (Boockholdt & Service, 1997). In this case study, we will discuss the organizational restructure that led to the downsizing of the company, General Motors. In the midst of economic uncertainty for the United States, General Motors has had to adapt to changes to recover from the damage of the existing economic recession. We will try to capture events leading up to the downsizing of the company as well as where the future of the company…...

Similar Documents

Downsizing

...g Downsizing: Layoffs/Closings [pic] | | | | |Top of Form | |[pic][pic][pic] | |Bottom of Form | | | | | |Introduction | |Leadership Examples | | | |Business Importance | |Sample Policies | | ...

Words: 7059 - Pages: 29

Organizational Downsizing

...Organizational Downsizing Techniques and Handling Layoffs Team 1 Christina Berardi Bridget Quinn-Carey Tung-Yueh, Lee Over the last two decades, organizational downsizing has been a key management strategy favored by many organizations attempting to cope with fundamental and structural changes in the shifting economy. In the mid-1980’s, downsizing was implemented primarily by companies experiencing difficult economic times (Gandolfi, 2006). Companies hoped to cut costs and improve performance. By the late-1980’s, it developed into a proactive restructuring strategy for a multitude of organizations. Furthermore, since then, organizational downsizing has now transformed the corporate landscape and changed the lives of hundreds of millions of individuals around the world (Gandolfi, 2006). There are several definitions that have been developed to effectively define the phenomenon of organizational downsizing. To sum it up in one sentence, organizational downsizing refers to a set of activities, taken on by the core management of an organization, designed to improve organizational efficiency, productivity, and competitiveness. It represents a management strategy that affects three components: (a) the size of the firm’s workforce, (b) the costs, and (c) the work processes. On the surface, downsizing can be interpreted as merely a reduction in organizational size, and the process is a chaotic and uncertain......

Words: 4982 - Pages: 20

Downsizing

...Downsizing- modern cost cutting art Abstract Though generally referring to an overall reduction in the size of a firm’s work force, downsizing is a term that has come to have an almost generic meaning. Accordingly, a wide range of actions, such as rightsizing, resizing, restructuring, delaying, and reengineering, have been addressed under the general rubric of downsizing. Regardless of the terminology used, however, the desire to be leaner, more flexible, and more responsive has made downsizing the most pervasive form of organizational change. There are many reasons why a company might need to downsize. In today's corporate America, it is a plain fact that far fewer employees are necessary to maintain a successful operation. Many times, it is the case where a technological advance or breakthrough makes it possible to replace a previously human job. It is also an all-too-common scenario that outside influences such as sudden shifts in the market or changed government policies force corporate executives to make coinciding decisions regarding their staff and these external changes. Downsizing began as the strategy of sickly corporations shedding workers in the face of weak demand, but soon strong firms looking to boost shareholder value even further adopted the policy. Downsizing- modern cost cutting art Why do corporations downsize so abruptly and discharge so many employees all at once? That might at first seem like a silly question, but it is justified by......

Words: 1282 - Pages: 6

Impact of Downsizing

...Introduction to the topic Topic: impact of downsizing:- WHAT IS DOWNSIZING? Downsizing is a commonly used euphemism which refers to reducing the overall size and operating costs of a company, most directly through a reduction in the total number of employees. When the market is tight, downsizing is extremely common, as companies fight to survive in a hostile climate while competing with other companies in the same sector. For employees, downsizing can be very unnerving and upsetting. Type of downsizing Reduce workweek: Firms sometimes resort to a reduced workweek. This may translate into the reduction from 40 to 35 or fewer hours and thereby reduce the short-term payroll expenditures. While most employees appreciate the idea of being able to spend more time with their families, they may not always welcome a reduced pay check. Also, employees may find that the same amount of work still needs to be performed while they spend less time on the job. Nucor Steel Corporation in South Carolina has avoided layoffs for 35 years by reducing to two- and three-workday weeks for its employees during downturns (George, 2004). Recently, workers at a St. Thomas automotive parts plant in the UK have voted to reduce their work week rather than see 200 employees leave permanently (De Bono, 2008). Firing: Due to non-performance is difficult; laying off employees due to poor business performance is harder. The effects of downsizing are significant; understand employee rights......

Words: 1509 - Pages: 7

Downsizing Envoys

...A NEW ROLE IN DOWNSIZING: SPECIAL ENVOYS Envoys are messengers in an organization who break the news of redundancy and job losses to their colleagues in the smoothest possible sense. WHY ENVOYS? Change management in an organization depends on * Strategy * Procedure * Psychology ( Emotions of people is often ignored) Envoys convey the message of downsizing by ensuring that: * The message is communicated with sensitivity * A balance is achieved between the management strategy and human treatment * People leaving the organization do so with dignity * Survivors of downsizing feel comfortable in their task of taking the organization forward CHALLENGES FACING ENVOYS * Emotional demands: Many envoys consider their task to be the most emotionally demanding thing they have ever undertaken. * Relational ties: Envoys acknowledge that closer their relationship with people tougher is their job * Role overloaded: Envoy’s role demands long working hours * Role clash: Clash between the HR envoys and the line manager envoys MANEGERIAL IMPLICATIONS * There exists no quantitative scale to measure resource capabilities or process feedback on appraisals such as cost to company which is crucial in balancing management strategy without affecting work progress. * Dealing with predicaments constantly poses the risk of misinterpretations and poor decisions. * Indistinctive responsibilities and miscommunication could lead to......

Words: 277 - Pages: 2

Hrm - Downsizing and Seperation

... Contents INTRODUCTION 2 DOWNSIZING 3 RESTRUCTURING 4 PRIMARY ISSUES 5 How to Downsize Effectively 5 COMPANY BACKGROUND 8 PRIMARY ISSUES - II 9 GENERAL MOTORS: RESTRUCTURING 10 RECOMMENDATIONS 14 CONCLUSION 15 REFERENCES 16 INTRODUCTION Over the past eight years, our country has experienced a whirlwind of economic slowdown that has led to the restructuring of the way companies do business today. Gone are the days when corporate mergers, acquisition, downsizing, and restructuring were few and far in between. The economic slowdown coupled with ongoing economic uncertainty has led many companies to adjust their organizational operations to a new level of efficiency. Words such as downsizing, rightsizing, restructuring, and reengineering are common vocabulary to corporate businesses of today. Other changes are brought on by the globalization of businesses and changes in the industries and markets. Regardless of the reasons, mergers and acquisitions are likely to continue into the next century (Boockholdt & Service, 1997). In this case study, we will discuss the organizational restructure that led to the downsizing of the company, General Motors. In the midst of economic uncertainty for the United States, General Motors has had to adapt to changes to recover from the damage of the existing economic recession. We will try to capture events leading up to the downsizing of the company as well as where the...

Words: 5029 - Pages: 21

Gm Powertrain

...Topic 1: Introduction to Change Management Case Study Format for GM Powertrain Develop a history of the company. The case study covered the GM Powertrain Unit of General Motors as it existed in the mid-90’s, and specifically that period (1996 – 1998) when it was managed by Joe Hinrichs. The Division was beset by a variety of issues and resulted in an inability to manage to a budget, and that was problematic to management. Budgetary and ineffective or inefficient functions of the plant occurred due in part from numerous factors including continued use of old machinery, denominator management, i.e., management of human capital by attrition, inappropriate use of incentives, collective bargaining limitations, and a general lack of managerial creativity. These effects were felt throughout the GM organization during the ‘90’s , as a new chairman was installed in a “bloodless coup,” barely four years earlier, when in late October of 1992, John Smale, the chairman of the GM`s executive board, forced GM Chairman John Stempel to resign by issuing a statement that did not give chairman a vote of confidence. "Boardroom Coup At GM, A Chilling Message For U.s. Execs." Mateja, J., and Franklin, S, October 27, 1992. http://articles.chicagotribune.com/1992-10-27/news/9204070415_1_gm-directors-gm-chairman-robert-stempel-john-smale Things appeared to be looking up as a take charge guy in John (Jack) Smith assumed the position of CEO in November of 1992, and eventually Chairman in 1996. ...

Words: 3459 - Pages: 14

Downsizing

...Company Downsizing xxxx HCS/325 April 14, 2014 xxxx Company Downsizing Downsizing may come by different names, but something that may be necessary for the organization, although unpleasant. Upper level management has determined downsizing must occur within the department and, therefore, the process of decreasing staff while keeping the remaining motivated and productive must begin. One issue commonly seen with downsizing is remaining employees become discouraged, tense, unproductive, or begin looking for other jobs, regardless of the reasoning behind the downsizing. Therefore, emphasis on motivating employees before, during and after the process is of utmost importance. The purpose of this paper is to discuss the various motivational methods applied in the downsizing process and the various concepts that support the points addressed by these methods. Motivational Methods Motivating employees is a process requiring a combination of techniques to warrant the maximum number of employees feels motivated and satisfied by their work. One of the biggest challenges to motivating employees is each is different, which is why using a combination of motivational methods and concepts is most beneficial. It is up to the department manager to determine which motivational methods will be the most effective with their present staff. It is important to note, that motivational methods will be used to help prepare staff for the upcoming downsizing, which has not yet......

Words: 1402 - Pages: 6

Downsizing

...any family member is sacked due to recession in the process of organisational downsizing. 2. Today, I am going to speak all about downsizing, its reasons, its effects on people and also some recommendations that how consequences can be ameliorated. Do you know that unemployment rate in New Zealand has gone up by 6.8% according to New Zealand statistics government website and 6.8% isn’t that much? Yes I know it is a lot for country and the major cause of this increase is downsizing. 3. Do you know what downsizing mean? I think not all of us here know about it. So before identifying the main cause roots of downsizing, one must know what downsizing means. Downsizing, also called layoffs, is reducing the number of employees in an organisation through terminations. There are several main reasons for downsizing but today I am going to tell you only three of them. 4. The first and the major one is technological advancement in an organisation. The trend of companies investing in technology, which began more than 20 years ago, has become one of the major reasons for downsizing today. Similarly, Contact Energy, largest listed electricity provider and NZ’s Post have been majorly in lime light in recent times for cutting 100 jobs each. The reasons behind these layoffs are upgraded IT systems and new machinery. The other major cause of downsizing is a merger. In merger, the work is collaborated further leading to......

Words: 1064 - Pages: 5

Prison Downsizing

...Prison Downsizing Implementation in New York State Darlene R. Muller Policy Implementation: Spring 2013 New York State has been in financial crisis for a long time. Numerous plans, policies and budget cuts have been proposed and enacted to attempt to save money, and no public service or government agency has been overlooked. One of areas where most attention is drawn is to the corrections system. A large portion of New York’s budget is spent on housing, supervising, and rehabilitating inmates. There are many who believe this is wasteful, but what is the solution to the dilemma? Public safety must be ensured, as well as the rights the inmates and accused are entitled to. There are two sides to this problem. There are vast amounts of money spent upon this system, however it also is one of the main sources of employment for those located in the areas that contain these facilities. The loss of jobs and revenue within these areas must be comparable to the savings involved. There is no question policy changes must be made, as the prison population continues to grow and budget constraints are an issue in every state. As policies are enacted to become tougher on crime, the need for corrections services increases. Legislation and policy change has had some success in other states. Kansas had an overwhelming problem with prison population and budget restraints throughout the last few decades. (Rengifo, 2010) At first, with increased prison capacity, in the 1980’s,......

Words: 1167 - Pages: 5

Are Restaurants Downsizing?

...Downsizing * Downsizing refers to the reduction of a company's labor force….Companies pursuing different markets or customers also downsize departments or specialties if employees' skill sets are seen as obsolete. (http://work.chron.com/meaning-downsizing-6715.html) * Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect. (http://whatis.techtarget.com/definition/downsizing) Are restaurants downsizing? * According to foodbusinessnews.net, downsizing is one of the restaurant trends to tap for 2015. “Restaurant operators are downsizing dishes and whittling menus to appeal to consumer tastes for petite portions and quality over quantity.” (http://www.foodbusinessnews.net/articles/news_home/Food-Service-Retail/2014/10/Slideshow_Restaurant_trends_on.aspx?ID={B2B6A2A5-54AA-483E-90DC-23E4B1D02FA9}&cck=1) * "People are willing to downsize, but you have to ask them do it,” (Based from the article, Does Offering Smaller Portions At Restaurants Help People Eat Less? http://www.npr.org/sections/thesalt/2012/02/08/146578665/does-offering-smaller-portions-at-restaurants-help-people-eat-less) * In an article by frugalconfessions.com, it is argued that “restaurants seem to be taking the consumer’s needs to heart and downsizing products while also decreasing the price”. It gave several examples such as DQ, Chipotle, TGIFs, Quiznos, and The...

Words: 378 - Pages: 2

Downsizing

...Employment Downsizing and Society Student name Student University Abstract The purpose of this research paper is to present the implications of the downsizing to the former employees and the social environment around this individual. The author presents the theoretical implementations of the downsizing and provides the implications to the laid of employee, his/ her family, and the employee who kept his/ her work. Later, the author discusses about ethical questions related to the downsizing. Keywords: downsizing, social impact, business ethics Studying Business Ethics and examining real life situation an individual starts to see the world from a different angle. The one starts to see the other side of a dilemma and begins to realize that sometimes decision made might affect both his/ her life and the environment around them. Most of the times, the decision is like a scale of wrong and right. Therefore, understanding the consequences – both negative and positive – is an essential part of decision making process where personal benefit or strong relationship might contradict individual’s worldview or belief. In my paper, I will discuss the problem of making decision of the top managers to pursue economic benefits when restructuring the organizations and potential ramifications, such as impact of employment downsizing on employees, communities, and families of the employees. To start with, employment “downsizing refers to a company's......

Words: 1961 - Pages: 8

Downsizing

...TABLE OF CONTENTS INTRODUCTION 2 ORGANIZATIONAL DOWNSIZING – A LITERATURE OVERVIEW 2 WHY DO COMPANIES DOWNSIZING? 2 STAGES OF DOWNSIZING 3 THE IMPACT OF DOWNSIZING PRACTICES ON THE PERFORMANCE 4 ALTERNATIVES TO LAYOFF 5 EARLY RETIREMENT 5 DOWNSIZING AND THE LEGAL ISSUES 6 REFERENCES: 6 INTRODUCTION Over the past decade, corporations have been under economic pressures for a long term. Consequently, some of them were eliminated from the local market, the survivors have been driven to reorganize, redesign and restructure their organization with the intention of maintaining their place in the market. According to the decision maker, downsizing can be a solution to many organizations to reduce their budgeting issues and to increase their productivities. ( Labib & Appelbaum,1994) This essay will focus on organizational downsizing. Part one present the downsizing concept, particular attention is paid to downsizing reasoning and stages, its impact on the performance and the legal issues. Part two focus on the early retirement. ORGANIZATIONAL DOWNSIZING – A LITERATURE OVERVIEW The term downsizing refers to an "elaborate decision to reduce the size of the workforce in an organization" to improve the organization performance and decrease cost. (Kozlowski et al., 1993, p. 267). Layoff and early retirement are methods of downsizing; in fact layoff is an immediate act of discharging an employee due a decline, while the early retirement is a personal......

Words: 1666 - Pages: 7

Downsizing

...Downsizing Downsizing has been used as a change management strategy by many organizations and government agencies beginning in the 1970s. It began as a way to deal with organizational and economic issues that that threatened the success of a company. It eventually became a popular strategy to restructure organizations during the 1980s. As downsizing changes corporate design, it affects millions of employees all over country (Gandolfi, 2008). Although manufacturing, retail, and service industries have the largest numbers of downsizing, it occurs in all industries, both private and public. According to Cascio (2003), statistics from the U.S. Department of Labor showed that in 2002 there were about 15,000 mass layoffs consisting of 50 or more personnel, affecting almost two million employees. There were similar results the prior year. It was reported that 85 % of the Fortune 500 firms downsized between 1989 and 1994 and 100 % were planning to do so in the following five years (Cameron, 1994). Reasons for Downsizing There are a number of reasons that organizations decide to downsize. According to Kirschner, (1996), “Globalization, consolidations, computerization, and divestment have resulted in dramatic changes in employment.” These factors created a new workforce and employment mindsets. Global business added additional competition for organizations. The continuing developments in technology allow higher production rates for companies and global business can run......

Words: 1953 - Pages: 8

Downsizing

...In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff , with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people. Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect. conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness. Downsizing can be effective if implemented appropriately. Companies must be careful to avoid sending the wrong messages to employees, shareholders and the media. Successful downsizing requires managers to: Evaluate the overall impact of downsizing. The total cost of downsizing—including both financial and non-financial costs—must be taken into account. Managers must calculate the present value of all costs and benefits associated with the cuts, including severance packages, lower employee productivity due to disorder or talent loss, eventual rehiring expenses, future rightsizing costs and the lost opportunity costs associated with not having the......

Words: 377 - Pages: 2