Organizing is a managerial function that comes after the planning function. Organizing is focused on incorporating three vital resources which are; human, financial and physical resources so as to achieve the organizational goals and objectives. Thus, organizing as a function seeks to point out the job roles, the related positions and the synchronization between responsibility and authority. The majority of organizations strive to ensure a comprehensive organizing function which would be beneficial in quite a number of ways. To begin with, organizing is important in promoting specialization of employment by enabling the division of labor into departments and units. It also assists in the formulation of clearly defined jobs so as to match the required expertise with the relevant job descriptions.
Furthermore, organizing in a company also helps to promote coordination amongst the various departments established in the organizational structure. These are just but a few benefits of the organizing function of management. In the present ever changing business environment, the majority of firms are undertaking restructuring so as to achieve the most favorable organizational structures that would sustain the business to viability. In this study, we shall take a directed focus on the recent restructuring advances made by General Motors (GM) Corporation in the quest to ensure that the company thrives in the highly competitive automobile industry. In that regard, the paper shall be interested in finding out the key challenges that the chief executive officer (CEO) of the company has faced in his proposal to perform restructuring.
The Reorganization of GM
The company seeks to perform a major overhaul of its structure in order to eliminate its long-rooted regional authority and adopt a structure that is established based on global functions of the company. After the restructuring, power is expected to swing from regional bosses to international leaders in core areas which include; product development, marketing and purchasing. As a result, the company is seeking to adopt a flat organizational structure that would promote a wider span of control and also have fewer chains of command.
Consequently, the move by the company would also facilitate centralization of the company’s decision making function. Hence, this would create room to allow for further delegation in the companies organizational structure. The new CEO Dan Akerson believes that the idea of restructuring into international leaders would improve the organization’s efficiency and performance in the automobile industry. The company is seen to be adopting a matrix organization culture after Akerson appointed fresh international leaders to head information technology and manufacturing.
Challenges of Restructuring
The company faces a myriad of challenges in trying to undertake its restructuring process; however, one of these challenges is lack of sufficient funds. For this reason the company has been forced to search for potential sources of funds. GM has already submitted its restructuring plan for the application of a federal loan from the US Department of the Treasury. It is also evident that the company is involved in discussions with a majority of foreign governments so as to be considered for funding of its global business. Hence, restructuring has become a heavy burden for the company to tackle using its available resources. Another challenge that can be pointed out in the company’s restructuring endeavors is the issue of disharmony amongst the top management.
For instance, the company’s global marketing head, Joel Ewanick was ousted from the organization on allegations of failing to disclose close to a third of the outlay of a $559 million financial aid from an English football team. The company also faces a challenge with its organizational culture which has been viewed as being resistant to change thus, derailing the restructuring process. This is expected to take some time before the entire organizations realizes the urgency of the need to align their organizational culture to the proposed restructuring. The giant size of the company is also posing as a challenge to Akerson’s efforts of restructuring. It is evident that the corporation does not operate as a single global entity rather it operates as little independent fiefdoms.
This is a situation that seems to compromise the restructuring process due to the disharmony that exists. This condition was also observed when the company launched its initial restructuring in the 1980’s. The restructuring process has also been hampered by the complexity of the organization that makes it hard for Akerson to effectively execute reorganization. This is due to the difficulty involved in controlling the various company departments embedded in the organizational structure. Lastly, the restructuring process of GM has also been hurdled by the fact that the new CEO lacks manufacturing expertise since he previously worked as a telecommunications executive. As a result, he might not have the required expertise to oversee a rapid restructuring in the giant manufacturing company.
Organizing is a management function that seeks to clarify job roles, related positions and ensure harmony between responsibility and authority. A majority of companies undertake the function of organizing so as to enjoy the various benefits that are presented by this vital function. GM has undertaken reorganization efforts so as to change the company’s leadership from the current regional heads to having a global leader who controls the entire business entity. The company will in the process narrow down the chains of command that exists in its organizational structure. This move is thought to introduce centralization of decision making in the company. The CEO however, thinks that the reorganization of the company will improve its efficiency and performance in the highly competitive automobile industry.
Consequently, the restructuring process in GM has experienced numerous challenges that have become bottlenecks to its execution. To begin with, the company does not have sufficient funds to support its restructuring process. Another challenge that is prevailing is the issue of disharmony amongst the top management personnel which led to misappropriations of the company’s funds. The existing organizational culture of the company has also being a hampering factor towards achievement of the restructuring process. The big size of the organization is also posing a challenge for restructuring due to the company’s nature to operate in independent fiefdoms rather as a single entity. Consequently, the company has a very complex structure that has been a major challenge towards its restructuring efforts. Lastly, the CEO of the company lacks the relevant expertise to effectively run a manufacturing company since he has been long serving in the service industry hence the restructuring process has been difficult for him.