Question
Please summarize the following : Different academics have different definitions of organizational growth. It can be considered a deliberate and strategic action to increase an
Please summarize the following :
Different academics have different definitions of organizational growth. It can be considered a deliberate and strategic action to increase an entity's effectiveness. Such initiatives are designed to assist the organization in achieving its goals. The significance of the techniques used to improve a firm's performance is influenced by various variables. Control is one of them. Poor management negatively impacts the organization's growth and, in the long run, the firm's efficiency.
General Motors was one of the biggest automakers in the world at the start of the twenty-first century. It had more than 2,500 facilities worldwide and employed more than 284,000 people. In 2000, the business generated $192 billion in revenue and $4.2 billion in net income. GM had a $5.6 billion loss in 2001, and its stock price dropped more than 50%. GM's market share had fallen from 30% in 2000 to 20% by 2005. The company had 210,000 fewer employees and lost an estimated $1 million daily. GM said in 2006 that it would close 12 plants and eliminate 30,000 jobs to turn a profit. Numerous factors contributed to the issues at GM, including decreased market share due to competition from foreign producers, high labor expenses, commitments for retiree health and pension benefits, and ineffective production methods. The early 21st century saw the corporation suffer significant losses due to these circumstances.
GM implemented several cost-cutting initiatives, like plant closures and layoffs, to solve these problems. Additionally, it negotiated new contracts with its unions that reduced worker pay and benefits. A new range of smaller automobiles that were more fuel-efficient than its conventional SUVs and trucks was also created by GM. By 2010, these adjustments had helped the business earn a profit.These cost-cutting tactics, however, perhaps essential for GM to survive, also contributed to a drop in employee morale. This is due to the perception among many employees that they were expected to perform more tasks with fewer resources while CEOs continued to enjoy substantial salaries and incentives. This drop in morale at GM led to a decline in productivity, which further affected the business's bottom line.
The leaders of GM might embrace a more participative style of leadership as a means of resolving this issue. Employee participation in decision-making and increased control over how their work is carried out would be required. Leaders must also effectively explain the company's goals and financial status to the workforce. Employees would learn why cost-cutting measures are required and how they may assist GM in turning things around if this were done. Additionally, it has been demonstrated that participative leadership increases employee engagement, motivation, and satisfactionall of which are critical components of productivity growth.
According to contingency leadership theories, a given leadership approach may be more or less appropriate depending on the circumstances. One such idea is the path-goal theory, which contends that the role of the leader is to facilitate followers' achievement of their objectives by removing barriers and offering resources and assistance. In other words, the leader's responsibility is to enable followers to achieve their goals by giving them the help they require.
The leadership style employed at General Motors and the circumstances were incompatible. To turn things around, the company needed a more directive leadership style because it had severe financial issues. But rather than taking a more active role, GM's leaders opted for a more laissez-faire strategy, which ultimately turned out to be fatal. As a result, GM sought bankruptcy protection in 2009 and needed a government bailout. This illustration demonstrates the applicability of contingency theories to leaders in contemporary organizations. To meet the particular needs of their followers and the current circumstance, leaders must be able to modify their leadership style. Failure to do so can have disastrous effects, as we saw with General Motors.
Understanding these factors is required before applying the proper leadership behavior to the General Motors organization's setting, followers, and structure. The environment in which the organization functions is referred to as the context. This covers elements like the company's history, culture, and the state of the economy right now. The employees of the organization are its followers. They come from various backgrounds and have varying levels of talent and experience. An organization's internal organization, including its hierarchy, departments, and divisions, is referred to as its structure. With that knowledge, it is possible to discern how several leadership techniques would be more beneficial than others in various circumstances.
A directive leadership style, for instance, would be most suited if GM were in a scenario requiring immediate decisions to prevent calamity. This kind of leader sets forth clear guidelines and requirements and does not solicit much feedback from followers. A participative leadership style would be more successful if GM attempted to foster creativity and invention among its staff to develop new goods or improve existing ones. This kind of leader welcomes input from their team members and empowers them to participate in decision-making.
The secret is for leaders to modify their behavior according to their particular situation and the objectives they are attempting to accomplish.
When General Motors was struggling, the company had a culture that could be characterized as one of fear. Because they feared retaliation, employees were reluctant to raise issues or question the status quo. Invention or creativity can't develop in this kind of setting. Due to its highly hierarchical structure, there were few opportunities for people to advance inside the firm. This lack of opportunity may have also influenced the culture of dread that prevailed at GM at the time.
Rick Wagoner, a former CEO of General Motors, had a leadership style incompatible with the organization's culture and structure. Wagoner was an extremely dictatorial boss who made all decisions without consulting anyone else. This management approach was successful when GM operated profitably and didn't require significant modifications. However, this leadership approach turned out to be a weakness as the business began to struggle in the early 2000s.
The culture of GM promotes cooperation and teamwork. Employees are accustomed to working in groups and being able to exchange ideas openly. Wagoner's autocratic leadership style and this cultural norm clashed, leading to conflict between him and his staff.
The mismatch between Wagoner's leadership style and GM's culture was partly a function of the organization's structure. The business is divided into divisions, each with a president with considerable authority. Wagoner's ambition to be in complete charge clashes with the division presidents' independence to manage their companies as they see fit under this decentralized structure.
A transformative leadership style is the appropriate leadership behavior that I advise. A transformational leader can inspire and motivate staff to give their best work while also being dedicated to the organization's objectives. An organization's shared vision is developed by a transformational leader, who then inspires employees to work toward it.
There are several essential traits of a transformational leader. One of them is they can explain their clear future vision in a way that motivates others. Another is they can build respect and trust in their followers' eyes. They can also challenge their followers to realize their full potential while offering advice and assistance. Lastly, they can foster a culture that values innovation and creativity.
For a few reasons, a transformative leadership style would have been better for GM than the other styles mentioned. As was already noted, a transformational leader has a distinct vision for the future and can communicate it in a way that motivates others. GM's officials lacked a clear plan to turn the firm around during the crisis; as a result, workers were not inspired or encouraged to perform at their highest level. Another thing the leaders of GM should have accomplished was to build relationships of trust and respect with their followers.
Another area where GM failed was creating an environment where creativity and innovation are encouraged. A company like GM needs to constantly innovate to succeed and stay one step ahead of the competition (which was something GM was failing at during its time of crisis).
The General Motors organization will gain many advantages from the suggested adjustment in leadership conduct. The most obvious benefit is that it will raise morale inside the company. Due to the current leadership style, there is a lot of staff unhappiness. This has resulted in a high turnover, low productivity, and absenteeism. If the new leadership approach successfully boosts morale, it will increase staff retention, output, and profitability.
Additionally, the recommended change in leadership conduct will enhance internal communication inside the company. There is currently a lot of mistrust between management and staff. This is partly because the information must be transmitted properly and efficiently inside the company. Employees thus experience a sense of alienation and disconnection from what is happening within the business. Employee trust in management will increase due to better communication, making them feel more of the company. Employees and management will work together more effectively and, as a result, boost productivity and profitability even more.
The foundation of the contingency leadership model is the idea that there is no one optimal way to lead and that the leader's style must be adapted to the circumstances. To put it another way, the leader must be adaptable and change their approach depending on the demands of the circumstance. This paradigm is particularly pertinent to today's dynamic, ever-changing workplace. Leaders must be able to modify their approach to lead their teams and the entire business effectively. For instance, a leader may need to adopt a more directive stance in a crisis to complete tasks swiftly. This same leadership approach, though, may turn out to be ineffective once the crisis has passed since it could impede creativity and innovation.
Leaders must have a solid understanding of many leadership philosophies and how to use them in various contexts. To modify their leadership style appropriately, leaders must be aware of their strengths and shortcomings.
Every company needs management and organizational development. Administrative choices decide the strategic course that the corporation takes. The personnel's talents and experience should be considered while forming a company's management team. A functional management team should be imaginative and exhibit problem-solving abilities to promote organizational development. The people must cooperate as a team.
Conflicts in management can have an impact on a company's performance. The administrative team must keep conflicts of interest to a minimum. Such an environment fosters fraud, money theft, and employee dishonesty. If General Motors hires the correct management team, it can strengthen its position in the global market.
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