Running head: The GM Culture Crisis

The GM Culture Crisis: What Leaders Must Learn From This Culture Case Study
Carmen A. Stokes-McNeal
Southern New Hampshire University

The GM Culture Crisis

General Motors is a known company in the automotive industry. General Motors

organizational culture was described as sad and very untrustworthy. In February of 2014, the new
and first female CEO of GM, Mary Barra, announced to the public that there was a faulty
ignition switch within their cars. As the result of the recall, there was 33 deaths and more than
2000 claims for death and physical injuries; only 4% have been deemed eligible for
compensation. GM always had problems with the ignition switch as of 2004. Instead of fixing
the problem because of the time and cost, GM advised customers other options such as not to
attach heavy key chains on their keys that could possibly pull the ignition out of the run position.
A lot of GMs culture was made of everyone not taking the recall seriously and taking
responsibility of what was going on and trying to fix it knowing that people have lost their lives
and others were at stake. I believe that the organizations strength was Mary Barra. When she did
become CEO she acknowledged the problem, let it be known to the public, and started a plan to
get it fixed. Not only that she gladly removed certain employees who knew of the issue and
turned their backs on it. The weakness of the organization would be the culture and leadership.
The organizational model used by GM in the case study is a traditional hierarchical
model. In a traditional hierarchical model, there are many challenges. This model was also used
by the military as a way to show a chain in command. With this model, Communication
typically flows from the top to the bottom which means innovation stagnates, engagement
suffers, and collaboration is virtually non-existent (Morgan 2015). Many organizations are
looking to flatten out the model of their organization. What I mean by flatten is to take out
some of the layers within the organization so that there is a lot more flow in the communication
within the organization and not have all the information and power is up at the top. In flatter
companies there is still a strong focus on communication and collaboration, improving the

The GM Culture Crisis

employee experience, challenging the status quo around traditional management models, and the
like. (Morgan 2015). A flatter structure doesnt reconstruct the entire company, it just achieves
similar results in a shorter time span and a lot less effort.
Every company in this world has their own way of running its own success. One
organizational model might work for one company but not the other. I feel like it depends on
what type of company it is and the size. You would not want to use a model for your small
company that is normally used for a large size company which will more than likely make things
a lot more complicated than it needs to be. There are different organizational models made for all
types of companies. It really all depends on how you think and where you want your company to
go which will determine which model you use. In my eyes GM started out as a hierarchical
model and made its way to a flatter model once Mary Barra became CEO.
The GM organization was not operating within an organizational model unique to its
industry until Mary Barra became CEO. Two of the things that they needed to acknowledge and
change was their culture and leadership. The organization did not work as a whole or as a
company. A lot of the individuals that work for the company did what they wanted and not what
they needed to contribute to the company to continue to make the company a success. Many
people wanted the GM company to own up to what has happened and the fact that they did
nothing over the course of a decade, which led to several deaths and physical damage, made a
huge impact on the company. I know that the GM organization would have been better off in a
flatter structure. The company would not have kept the recall a secret just to keep the business
afloat if the structure of the organization was more stabled and was the right fit. I feel like
motivational models have shifted in comparison to the organizational modeling trends. With a
better organizational structure in place, the loyalty of their customers, and the new CEO of GM,

The GM Culture Crisis

the company has a lot more motivation than ever. Once Mary Barra removed several employees
who made the recall worse, that showed the company that it was time for a change. She promised
the public and her employees that she was going to be nothing but honest with them. She also
took full responsibility for the ignition switch issue.
Culture is the most powerful force in an organization. In approaching the case study,
evaluation of leadership is critical. It is clear there are many faults within this tragic case.
Leadership was clearly lacking, as the style within this organizations culture was to allow for
delegation of duties and not be more involved. The shift in leadership style, has only appeared as
a result of the incident. Management has taken the approach of ascertaining that the blame be
placed on individuals whom were deemed to be guilty of not doing their jobs, while upper
management such as the CEO merely just accepted responsibility and stated change would come
about. GM as a whole, now in the spot light has to face internal and external influences.
Internally, they have low-level employees who express concern of how business was run on a
normal basis, where focus was not necessarily on safety. Externally, you have recommendations
on how to remedy the situation and how changes in structure could prevent another crisis. Now,
to address this meltdown of clear leadership. It is now taken upon upper-management that new
procedures and personal be implemented. This new approach on leadership being a key vessel to
success is a critical aspect of the steps to be taken to move the company forward based on the
new decision-making process. Which involves a series of improvements the company as a whole
seek to address to transform a broken method of organizational structure and leadership.
Culture within the company seemed to follow a path where employee involvement was
not awarded, allowing for the lack of ethics within lower-level employees to go unquestioned.
Management as a whole followed counter-productive behaviors, such as sending conflicting

The GM Culture Crisis

messages as to how things should be perceived and followed. The company as a whole, can be
deemed a culture problem, based on aspects that there was a clear lack of reluctance to raise
issues or problems of any concern. Not only from a lower-level employee stand point, but of
those in leadership roles who could have made an impact had they been doing their jobs. To have
employees whom are designated to be leaders avoiding responsibility, or blaming others is a
dysfunction as a unit. When a company has meetings to address certain things, and everyone is in
agreement, however the intention to carry out the task is deficient. Its clear to say there is failure
in this organization. Committees proposing solutions to only have them not take effect, is
useless.
As a study, the leadership style that was present compliments the internal culture of the
organization. When seeking to understand the hows and whys that lead to such tragic events
and an overall breakdown within the organization. It is noted that the lack there of definitive
leadership and a cultural mindset to allow for the lack on intervention to prevent such a disaster
indeed complement each other solely on the results. Internally, as an organization the
recommended change in the style of leadership and internal culture are influenced by each other
merely for the sake of what has been determined to be faults. Changing procedures and policies,
even management structure is due to a cause and effect, in which both the culture and leadership
within this organization has gone far too long without any real sense of urgency to address
concerns. The leadership style and again organizational culture also affects and influences
employee behavior in ways that can undermine a companys plans for success. This cause and
effect structure is responsible for the way employees perceive current work ethics as a norm that
complies with company policies and procedures. As is reflected in an over view, these affects
and influences can clearly be seen in how personnel within this organization had the inability to

The GM Culture Crisis

address problems for sheer lack of desire. No one took responsibility to really attempt to fix
problems or raise the concern to upper-levels of the company whom also expressed what appears
to be an out of touch view on how things should really be within the company. Now when you
have supposed leaders whom sit back and believe everything is fine, and whom are not involving
themselves more to not only ask questions, but be physically involved shows a true lack of
leadership within the structure of the organization culturally and from a management stand point.
This method of culture leads to the current situation presented in this case study. An organization
cannot afford to make these same mistakes, and if this company had better leaders, then the
effects of that leadership would influence employees to be more proactive.

The GM Culture Crisis

References
Kuppler, T. (2015). The GM Culture Crisis: what leaders must learn from this culture case study.
Retrieved from http://switchandshift.com/the-gm-culture-crisis
Morgan, J. (2015). The 5 Types of Organizational Structures: Part 1, The Hierarchy. Retrieved
from http://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-oforganizational-structures-part-1-the-hierarchy/#26ee20123853
Morgan, J. (2015). The 5 types of Organizational Structures: Part 2, Flatter Organizations.
Retrieved from http://www.forbes.com/sites/jacobmorgan/2015/07/08/the-5-types-oforganizational-structures-part-2-flatter-organizations/#26e1a566bca7