Gm Motors Case Study Essay

2404 Words Aug 22nd, 2013 10 Pages
CASE STUDY REPORT

The decisions and culture leading to the fall of General Motors

CONTENTS
EXECUTIVE SUMMARY………………………………………………………….iii 1. INTRODUCTION…………………………………………………………..4 2. EXTERNAL FACTORS IN DECISION MAKING……………………….4-5 3. BOUNDED RATIONALITY……………………………………………….5-7 4. BUSINESS CULTURE…………………………………………………...7 a. The Power-Distance Relationship……………………………...7 b. Uncertainty Approach……………………………………………8 5. THE CONFORMITY APPROACH……………………………………...8-9 6. CONCLUSION……………………………………………………………9 7. RECCOMENDATIONS…………………………………………………..9-11 c. Sharing the Power………………………………………………..10 d. Encouraging diversity of approach……………………………..10 e. Develop participative management
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This level bounded rationality left them exposed to make decisions purely on their intuition and natural biases.
Overconfidence and confirmation biases shaped the decisions of the General Motors management. The bias of overconfidence potentially shaped the entry for competition into the market. The Japanese automotive manufacturers were seen to be small, insignificant competitors to the dominance of the General Motor portfolio. General Motors were over confident that they understood the American market better than any overseas competitor could. The over confidence shaped the decision processes that led to the slow development of new products and a strong market share growth for the overseas manufacturer. Roger Smith developed his own intricate network of people to provide him the confirmation bias for his decisions. To this end he turned the board of directors into a ratifying council for the work of various (Monks et al., 2011). By achieving this he was able to selectively target information to suit and support the decisions he wanted to make.
The landscape of discussions and decisions within General Motors management team were inherently always agreeable to the superior’s decisions. The organizations reward system influences decision makers by suggesting what choices have better personal payoffs (Fitzgerald, 2013, p. 201). A path upward within the hierarchy for General Motors

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