Management Framework &

Functions
Project Title: Book Synthesis (Sixty to Zero – An Inside Look at
the Collapse of General Motors by Alex Taylor III)
Course: MBA G505
BITS Pilani Instructor: Dr. Neetu Yadav
Pilani Campus
 Presented by:
1. Aliasghar Vali (2019H1490820P)
2. Akanksha Mudgal (2019H1490867P)
3. Akash Mandloi (2019H1490858P)
4. Amandeep Singh (2019H1490845P)
5. Areesha tanzeem (2019H1490817P)
BITS Pilani 6. Arun Singh Tomar (2019H1490852P)
Pilani Campus
General Motors

General Motors Company,

commonly referred to as General
Motors, is an American
multinational corporation
headquartered in Detroit that
designs, manufactures, markets,
and distributes vehicles and
vehicle parts.
Founded by: William C. Durant
(1908)
CEO: Mary T. Barra
Headquartered in Detroit,
Michigan, USA.
Subsidiaries: Chevrolet, Cadillac,
Opel, GM Financial, etc

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 Ten Management Lessons from the book
“Sixty to Zero – An Inside Look at the Collapse
of General Motors”

BITS Pilani, Pilani Campus

Inability to accept mistakes
and rectify them
• GM was a superstar firm & people viewed the organisation in
holy light, after the Nader case its PR never really recovered
• Nader published a book titled “Unsafe at any speed” in 1965
highlighting three major issues in the design of the Corvair
which were the stabilizer bar, steering wheel & coolant system
• The company believed it could bail itself out of any situation
by spending money which can be seen when it bought out
stake of Perot, thus forcing him to leave the board (Electronic
Data Systems) when he started questioning Roger Smith’s
practices

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Lack of appropriate
organisational structure
• General Motors grew by acquiring independent
businesses sequentially
• Pontiac, Buick, Chevrolet were some independent
departments acquired by General Motors
• The organisation functioned in multiple parts of the
world and this lead to a very complex structure owing to
the sheer size of the company
• Design division was subordinated under the Engineering
division
• United Auto Works, was able to exploit these structural
loopholes and bargain extensively on issues such as
workers health, wages, temporary workers & each time
General Motors had to cede to their demands
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Improper selection of
leadership
• Frederick donner, was made in-charge after Sloan, who
was a savvy accountant and saw all activities through
the lens of financial management
• A string of CEO’s from financial background meant that
the company now focused its operations entirely on the
basis of balance sheets and profits
• Ignorance of design requirements with regard to
customer safety against advice issued by the
engineering department was prevalent
• Lacking focus on customer demand and sentiment
ultimately resulted in loss of touch with consumers

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Improper talent acquisition
and appraisal practices
• Top management was always selected inwardly on the basis
of ‘black book’
• This prevented talent from outside to join leadership roles and
isolated GM from the cultural trends in the outside world
• The fact that GM was resistant to change lead to
consolidation of the companies culture irrespective of whether
it was right or not
• An 18 monthly appraisal cycle was followed which was based
on employees having a clean record, this lead to employees
trying to pass on the blame in a bid to keep themselves safe
• The cycle also provided convenient points on which one could
exit the firm, increasing attrition rates

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Lack to offload capacity and
agility
• General Motors was suffering with over capacity burdens
and was in desperate need of offloading capacity
• However, when CEO Robert Stempel, launched Saturn
for rebranding, but it didn’t work as planned as a totally
separate plant was made adding capacity to GM which
was over burdened with capacity and was struggling to
offload it
• The organisation had processes so far flung and
distributed that they lost their agility leading to major
restructuring requirements for even minor changes to
design

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Lack of proper feedback
mechanisms on expenditure
• Roger Smith and the consecutive CEO’s spent a
considerable amount of their time and resources trying to
repair their ailing organisation
• The company spent $90 billion towards restructuring
itself, with changes hardly translating into sales & a
thinning of profit margins were evident
• There weren’t any systems in place to ensure effective
utilization of resources and inefficient feedback loops
due to huge organisational size

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Improper centralisation of
authority
• Decision making process was changed to a centralized
form & individual autonomy of brands ceded control to
the centre
• This led to increase in decision time and ineffective
decisions
• CEO, Roger Smith grouped Auto Workers under one
company under a division termed as General Motors
Assembly Division, marketing and a central division
• Employees passed on decisions upward in management
in a bid to reduce accountability and maintain a clean
record leading to slow decision making

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Inability to adapt to modern
culture and trends
• Huge European styled secretarial styled offices were
supplied to employees
• Appointments were to be taken to meet even the person
next door
• In 1980’s to 2000 the world had shifted to a Water cooler
culture in workplaces with communication between
employees encouraged with the implementation of a
more western style of culture as compared to the
European style being implemented by GM

Excerpt: “They confused their view of corporate life inside General Motors with
the actual world around it.”

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Lack of Operational Efficiency

• Toyota (Japan), Ford (USA), Chrysler (USA)

• Toyota manufactured newer models by changing the
specifications but keeping functional parts constant
• GM didn’t manufacture newer models keeping functional parts
standard which led to inefficiencies.
• GM totally failed at gauging market demand for a small car.
• Cost of an average Toyota car : $7000
• Cost of an average GM car : $12000
• The company invested billions of dollars in robots, but didn’t
work on improving the processes of the organization which
lead to virtually no rise in production and hence no significant
returns on capital invested in them

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The problem of too much
success
• General Motors was a trend setter and the GM way was
heralded as the ultimate way to success.
• General Motors had become virtually monopolistic and
faced no competition which lead to the death of
innovation
• Disregard for the competition and new advances in
management practices and technology
• GM became too successful to see the dwindling
demand, in its peak times

Excerpt: “ The spirit of venture is lost in the inertia of the mind against change”

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