GM Recall and its Implications to the 2st Century Management
In every business, challenges are bound to occur. One of the challenges bound to occur is customer complaints. Whether in the hotel industry, communications industry or the banking industry, customers will come to complain about one thing or another. However, what makes the difference is the manner in which an organization addresses the customer complaints. For some companies, customer complaints provide the best opportunity to carry out self-examination and address the issues raised; however, for other businesses, customer complaints are normal experiences hence business continues as usual. This is not the best way to run a business especially if the business relies on the trust of the consumer to move its products. Therefore, honesty, integrity and a genuine desire to satisfy the customer are some of things that companies must get right.
Recently, General Motors (GM) did the unthinkable: the company recalled more than 1.5 million vehicles in a bid to save its reputation following an embarrassing discovery that some of its cars had a faulty ignition switch. Some of the ignition switches were so faulty such that they could be easily turned from “Run” position into “Off” or “Accessory” position. This can happen after hitting a bumpy road or after hitting the ignition key with a knee. The result is a loss of power, which makes the vehicle vulnerable to braking or steering problems. In other cases, the airbags may fail to work.
GM has already notified vehicle owners of model years 2003 through 2007 in what is seen as a massive recall for the company thus far. Specifically, the cars involved include Chevrolet Cobalt, Chevrolet HHR, Solstice, Sky, Pontiac G5 and Saturn Lon. However, not all the models were available through the model years.
Implications of the Recall
The fact that the faulty ignition switch has caused 12 deaths so far raises fundamental questions from consumers. The first question is whether companies think of the safety of their products to their clients. This is a problem that is not confined to U.S. businesses alone, but businesses in other areas of the world, as well. The motor vehicle industry is very sensitive because many people use vehicles to travel, and this puts their lives in danger. Again, GM’s recall comes almost two years after another car manufacturer (Toyota) experienced safety issues with their cars. This forced another costly recall. However, unlike GM who has experienced an ignition switch problem, Toyota experienced a braking problem with some of their models. Honda, another automaker, also recently recalled 900,000 odyssey minivans allegedly for the risk of causing a fire.
The fact that the three automakers have recalled some of their cars raises questions about the seriousness automakers dedicate to the safety of their cars. The frequency of safety issues indicates that automakers are experiencing a serious laxity in the safety checks they have put (in place) to ensure safety of their customers. This calls for a public probe into the possibility of criminal liability for ignoring (or for failing to institute thorough checks for) safety issues discovered prior to release of cars to the market.
The second question that consumers are likely to increase is why it took so long for GM to notice the problem. Surprisingly, the ignition switch problem is not new to GM. In 2001, engineers testing a Saturn Lon faced the same challenges. The problem was solved by redesigning the ignition switch. Reportedly, another Engineer driving a Chevrolet Cobalt experienced the problem of (ignition switch) again in 2004. Given that brief history, GM consumers are, therefore, bound to ask why it took the firm so long to trace the problem.
Every business should have robust traceability system. The advantages are many. For example, traceability allows a business to notice the source of faulty materials from suppliers. Traceability also allows a business to notice the source of faults in its final products. In the case of GM, the traceability systems were not robust enough to notice the ignition switch problem as it started.
The third question that consumers are bound to raise is what assurances can be given to ensure that the same problem or other safety issues do not arise in the future. No driver wants to be in a vehicle that may cause an accident any time because of faults that could be prevented by the manufacturer. In this case, GM will have to work extra hard to assure their customers.
Lessons from GM’s Recall
However, despite the problems faced, GM needs applause for the manner in which the organization has handled the situation to reassure consumers. For example, GM has appointed a global vice president in charge of safety. The position was created recently following the latest developments. The recall was also another step that assures that the company is willing to solve the problem head on instead of running away from it. The fact that GM accepts responsibility for the faulty ignition switches is a step in the right direction. In the management, taking responsibility for mistakes arising is very important.
GM has also made arrangements with their dealers such that consumers affected by the recall can get new cars to use before their cars are checked. This move will make sure that GM consumers are not inconvenienced by the recall. All the repairs will be carried at no extra cost to the consumers. In addition, GM issued new recalls and the other models affected include 2008-2013 Buick Enclaves, GMC Acadia, 2009-2013 Chevrolet Traverse and 2008-2010 Saturn Outlooks. The new recall of the crossover SUV models is meant to fix the wiring of seat-mounted airbags. Another 64,000 Cadillac XTS full-size Sedans from 2013-2014 are being fixed for overheating of brakes. 303,000 Chevrolet and GMC Savana full-size vans have also been recalled to rework the instrument panel. This is a move that is expected to improve the safety of unbelted passengers in case of accidents. The three separate recalls have been initiated as preventive measures, and this is commendable.
The manner in which GM has dealt with the recall issue is a matter of a case study. This is because problem solving and decision making are issues that are critical to management of businesses. GM has demonstrated the use of six steps to resolve the problem. The first step is defining the problem with clarity. In this case, the problem is that some of the car models made by the automaker had an ignition switch problem. The automaker then went to the second step of decision making, which is gathering of facts. In its facts-finding mission, GM realized that the ignition switch problem had caused deaths of at least 12 people. GM also zeroed in the problem to cars made in 2003 through 2007. The facts at hand called for the third step in decision making: brainstorming.
In the brainstorming phase, GM explored the possible options and solutions. This phase matched closely with the next step of decision making, which is considering and comparing the pros and cons of each option. This called for consultation with other bodies such as National Highway Traffic Safety Administration (NHTSA). It was important to consult NTSA because it is an organization with express oversight on vehicle safety matters. After this step, GM then engaged the fifth step of decision making: selecting the best option. The best option in this case was a recall of the affected vehicles.
Lastly, GM communicated the decision to the people affected. Those with 2003-2007 car models were notified of the potential safety problem with their cars, and give the dates to visit the nearest auto dealers to carry out the necessary repairs. The information also has been made available to the public, and the people are aware of the steps being taken to address the problem. The ignition issues aside, delivery of timely information GM has been a major plus for the business. In any crises, information is essential and GM has done well in that area.
In conclusion, the decision by GM to recall some of its models for repair has raised concern among customers. First, it has taken long to detect the problem given that the faulty models were released from 2003 to 2007. Secondly, given the fact that several automakers have been hit with safety issues in the recent years, the next question is whether automakers are giving safety of their cars a serious thought. Lastly, consumers are also concerned whether the safety of their vehicles can be guaranteed in the future after the latest revelations. However, despite the issues raised, GM has shown a commitment to address the issue exhaustively. The measures put in place thus far show good problem solving and decision making, something that can be emulated by other organizations when faced by crisis.
Valdes-Dapena, P. (2014, March 15). GM recall: 10 things you need to know. Retrieved March 20, 2014, from CNN.com : http://money.cnn.com/2014/03/14/autos/gm-recall- faq/index.html?iid=EL