5. Bruce Red Smith was named CEO of General Automotive Inc. (GAI), a large organization that is a legend in the auto industry. GAI was founded in 1915 and enjoyed nearly 50 years of success in terms of sales and profitability thanks to its early adoption of the principles of Taylorism and Classical Management which led to efficient operations. However, the company has been facing an increasing list of problems over the past twenty years. Reds appointment comes after a decade of disappointing losses for the company due to the intensifying competition (including increased innovation by rival firms in Japan and Korea introducing similar cars at lower prices), and the failure of two other CEOs at GAI in the past five years who steered the company towards manufacturing trucks and minivans. The rise in fuel prices over the past three years, has led to increasing pressure on all automobile companies to be more innovative and quickly develop vehicles that will be less and less dependent on foreign oil while also being environmentally friendly and economically priced for consumers. Red, coming in with previous experience as a top executive at two other large firms, decided to begin by closely examining GAIs organizational design, culture, and processes. He found that the company has retained its bureaucratic organizational design which worked so well at the height of its success fifty years ago. The company has a weak and detail-oriented culture where the different departments (R&D, marketing, manufacturing, finance) work in isolation. Its manufacturing employees all belong to the United Auto Workers (UAW) labor union which has negotiated high salaries and expensive health benefits for its members. This has caused GAIs manufacturing costs to be among the highest in the industry. Despite employing a large number of experienced engineers in the R&D department, the companys rate of new product development is once in five years compared with its foreign competitors who come out with new products every three years. Based on this information, you must explain: (a) what is GAIs current organizational structure, why is it no longer effective based on contingencies of organizational design (see Chapter 13) and what is the new org. structure they should adopt instead? And (b) how should Red change the content of the organizations culture (i.e. which new organizational cultural dimensions/values would you recommend he establish see Exhibit 14.2 in Chapter 14) and why?

6. Using the information in question 5, explain to Red: Using the Job Characteristics Model of Job Enrichment, to what extent does undertaking change in organizational structure and culture (that you recommended in Qs. 5) represent job enrichment for department heads at GAI and what more does Red need to do to motivate them and increase their performance? And (b) at least one example each of stories and organizational language Red should introduce to help department heads and other employees adopt the new organizational culture.

using the textbook organizational behavior 6th edition by McShane and Von Glinow.