ISSUES /PROBLEM STATEMENT

1. No separation role of chairman and CEO

According to this case study, the most critical issue arise in General Motor is no separation
role of chairman and CEO. As stated in this article, most of CEO and chairman in this
corporation are held by one person. Mean that, they have held two positions at the same time.
For example, Alfred P. Sloan, Jr is the CEO and Chairman for General Motor at 1937 until 1956;
same goes to Richard C. Gerstenberg and Roger B. Smith, they are also has hold two position
at one time. The problems arise when this corporation has not practice separation role of CEO
and chairman is the domination and unfair power. For instance, Roger Smiths has used their
power to dominate his tenure as chairman when he has decided to use the technology as
methods to achieve GM vision and mission. This is a good idea in order to ensure GM goals.
However, this is unrealistic when for a ten year tenure as CEO, Smith had spent over $50 billion
on technology projects. There is so much money that has been spent to high technology
projects. Nevertheless, the strategy to use high technology is useless. There are so many cars
that cannot be sale and GM did not gain their profitability.

2. Autocratic management

The second issue arise in GM Corporation is autocratic management. The autocratic

management has throw in a lot of problem to this corporation. As mention earlier, GM
Corporation has not allowed frank and open debate among their employee and employer.
Employee should respect their employer and their management has shown the obedient power
such a military rules. As stated in this case study, one of GM executive has required his morning
orange juice to be a certain temperature, so each day an underling will check the glass of juice
with thermometer. The other cases that shown the autocratic management is when one author
describes a GM employee has driving 40 mils each morning to pick up his superior newspaper,
and saying he didn’t mind with the chore. Besides that, GM executive also do not allowed any
report or complain from their employee. They said that, who raised a problem would be labeled
as “negative” not a team. For example is when the percentage GM car quality has jump down
and one of their employees has brought this problem to administrative meeting. However, this
issue was not taking into the account when the executive has ignored and said that, “this
meeting was not to discuss this issue”. In the other, GM Corporation also does not have a good
labor relation. Roger Smith has sees their employees as opposition, to be replaced by machines
wherever possible. This is because of Smith is always focus on high technology, he think that
employee is usefulness to GM Corporation. It is contra with the Japanese company where they
are less bureaucracy, a good relation with employee and employee is an important part in their
company. So, they have built a friendly working environment in order to ensure more efficient
operation.

3. No independent decision making

The others issue that can be seen here is no independent decision making. Accordingly, GM
Corporation culture was not encouraging the frank and open debate in their management. The
board is failed to impose its authority .During the meeting, the others board and committee also
cannot propose their opinion and the all. As stated in this case study, GM employee also has
never question the decision that makes by top level. The all decision is normally has been
decide by CEO and chairman. For example is during a meeting. There are no information
discloses and this is a passive session when there is little two ways communication.