gm real share price in 1982 dollars
TRANSCRIPT
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GM Real Share Price in 1982 Dollars
0
20
40
60
80
100
120
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160
Year
$
Early 1980s – US is the largest market.
•GM the largest firm by market share >30%.
•High tariffs (import taxes) on foreign cars.
Late 1990s – Stock market bubble.
Today – not profitable.
•Losing market share to Toyota, Nissan and Honda.
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Environment
1. Introduction: GM2. Environmental Domain3. Environmental Uncertainty4. Consequences for Organisation Structure5. Conclusion
• To be an effective organisation the structure has to fit with the environment.
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Environmental Domain• Domain: environment chosen by organization• Task environment: organization interacts directly• General environment: indirect influence
Task GeneralIndustry Sector Government SectorRaw Materials Socio-Cultural SectorHuman Resources Economic ConditionsMarket Sector Technology SectorInternational Sector Financial Resources
• Example: Industry Sector for GM – the rise of Toyota.• Example: Government Sector for GM – Tariffs on Imported cars;
Emissions Regulations.• Example: Economic Conditions for GM – US still the main market.
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Environmental Uncertainty
Two Dimensions
Stable-Unstable
Simple-Complex
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Consequences for Organisation Structure
• Fashions in cars are changing faster than they used to.
• Lower import barriers has meant more competition.
• Customers have become more demanding.
• Technology changed: Total Quality Management pioneered by Japanese firms (“Toyota Way”)
Source: Economist
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Consequences for Organisation Structure
• Interorganisational linkages.• Control the environmental domain.
What has GM tried to do?
• Interorganisational linkages: Saab
Daewoo et al.
• Control the domain: Lobbying for higher tariffs (late 1980s)
Source: Economist (8 September 2005)
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Conclusion
• Summary.
• Managers need to try to anticipate changes in the environment – and change their firms to propser in the new conditions.
• GM’s problems are all down to bad luck - discuss.