A Climate for Change Essay
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General Motors has been through some difficult times the past ten years or so and appears to have learned some hard lessons. Based on these lessons, General Motors has begun to adopt a strategy of restoring profitability to its North American operations, by aggressive marketing, redesigned products, adopting to new Human resource strategy and a profit rather than a market share goal. Since this assignment is on strategic human resource management, I will be concentrating more on GM’s Functional Strategy in HR, which played a major role for GM’s success.
General Motors Human Resource Management Most companies do not view the HR department as a strategic business partner or as an indispensable part of the organisation (Terri Kabachnick, 1999). By analysing executive assessments, they usually show merchandising, finance, or marketing in the top spot when each department’s value and contribution to the company’s success as perceived by the company are rated. HR inevitably ranks last, coupled with loss prevention.
Traditional HR departments within large, multi-national corporations tend to be powerless with the logistics of managing processes across many departments spanning multiple countries. In addition, GM, like other multi-nationals, has multiple HR groups – one at the corporate level and additional ones for each business unit within the corporation. These HR groups typically do not have a central repository of information and lack a coordinated communications infrastructure.
As a result, the HR processes of large, multi-national corporations generally are redundant and inefficient. In addition, the sheer number of third-party vendors used by an HR department to handle discrete functions makes management of the process challenging. By necessity, these departments predominantly have focused on administrative functions and typically don’t have the time or the resources to devote to strategic planning. At the same time, many are facing a dramatic reduction in resources, and cost-cutting efforts primarily have focused on reducing staff, rather than re-engineering service delivery.
A Climate for Change: While many businesses flourished during the boom years of the 1990s, GM, like other U.S.-based automakers, struggled to maintain the status quo. During those years, GM’s market share continued to shrink as a steady stream of consumers bought cars from its Japanese, German and Korean competitors.
When Wagoner took over as president and chief executive officer of GM in 1998, he knew the company had to change its approach to manufacturing and selling cars or it would continue a downward spiral and eventually lose its place as the world’s pre-eminent automaker. Wagoner set into motion an effort to reorganize and rebuild GM from the inside out. One of Wagoner’s primary objectives was to refocus and revamp the company’s HR department. Wagoner thought HR is paramount to GM’s reorganisation effort. If they were to hire, train and keep the best workforce possible, then it must have the best and most up-to-date HR practices possible. While the change in HR is just one element of making GM a more globally focused and competitive company, it is a key element.
GM has always been a very siloed corporation with all of its different divisions functioning like separate companies. There have been numerous reorganisation efforts at GM, and most have not fared well, because of the turf battles and independent nature of GM’s divisions. However, GM appears to be taking a different approach. Focusing on HR and making it a key element in the reorganisation effort, which GM has never really attempted before.
One real challenge has been the effects of change on one large organisation which has set itself to comfort,so to get GM’s management team to completely buy into the strategic role for HR was a task in itself. Middle management, however, has been a different story, they were more resistant to change than their managers. But, the effort is under way, and senior-level executives are well aware that it is “an evolution not a revolution” and therefore will take some time. The key to making the evolution work, is to find the points of resistance and to try to make them understand the need for change. And if they continue to resist then personnel changes should be considered.as the cost is quite big to barter. I personally feel that the approach which GM adopted, provides a best fit to its work environment and structure.