“A CONCEPTUAL STUDY OF BUSINESS MANAGEMENT AND
ORGANIZATION SYSTEM”
SUBMITTED BY
Kakul trivedi
Under the guidance of
Prof. Gurutej sir
Excel Business Academy
Ullal Main Road
Bangalore
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STUDENT DECLARATION
I hereby declare that the project report entitled “a conceptual study of business
management and organization system – Genearl motors.” has been done by me under
the guidance of Prof. Gurutej , – MBA & PGPM, Excel Business Academy,
Bangalore. This project report has been submitted to Excel Business Academy,
Bangalore as a part of partial fulfillment for the award of the degree of Post Graduate
Program in Management from Excel Business Academy, Bangalore.
I also hereby declare that this project report has not been submitted at any time to any
other institute or university for the award of any degree.
Place: Bangalore
Date: kakul trivedi
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CERTIFICATE BY GUIDE
This is to certify that Kakul Trivedi bearing Reg no. ESB/2010/AUG/MBA/007, a
student of MBA+ PGPM during the academic year 2010-2012 has successfully
completed the project report “a conceptual study of business management and
organization system –GENERAL MOTORS.” Under the guidance of Prof.
GURUTEJ, Excel Business Academy, in partial fulfillment for the award of Post
Graduate Program in Management + mba from Excel Business Academy, Bangalore.
Her character and conduct was good during the study.
Place: Bangalore
Date: Prof. GURUTEJ
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ACKNOWLEDGEMENT
The satisfaction and euphoria that accompany the successful completion of any task
would be but incomplete without the mention of the people who made it possible,
whose constant guidance and encouragement crowned our efforts with success.
I consider it my privilege to express gratitude and thanks to the Management – Excel
Business Academy, Bangalore for giving me the opportunity to conduct this study.
I thank our Principal Prof. Thejaswi Naviloor, for the encouragement and
intellectual influence during the course of the project work.
I wish to express my heartfelt gratitude to Prof. Gurutej, Head – PGPM & Techno
Management Studies; Prof. Shreya K Rao, Head – MBA & TPD and my Project
Guide for their help and able guidance for the completion of the project successfully.
I am grateful to the Librarian of Excel Business Academy, for his support during my
study.
Last but not the least, I would also like to thank each and everyone especially all my
friends for their cordiality & support during my project.
Date:
Place: Bangalore KAKUL TRIVEDI
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TABLE OF CONTENTS
CHAPTER
NO.
CONTENTS PAGE
NO.
1 1.1 Meaning of Business
1.2 Meaning of Management
1.3 Meaning of Business Administration
1.4 Difference between Business Management & Business
1.5 Difference between Business Management & Business
Administration
1.6 Types of Business
2 Organizational System (General Study)
2.1 Meaning of Organization
2.2 Types of Organization
2.3 Types of Ownership
2.4 Vision, mission & Goals of the company
2.5 Organization Structure & it’s Types
2.6 Functional Patterns – People, policies, systems, problems if
any.
2.7 SWOT Analysis
3 Organizational System GENERAL MOTORS
3.1 Introduction
3.2 Type of Organization
3.3 Type of Ownership
3.4 Vision, Mission & Goals of the company
3.5 Organizational Structure & Type
3.6 Functional Patterns
3.7 SWOT Analysis
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4 Summary of Findings & Conclusion
4.1 Findings
4.2 Suggestion
4.2 Conclusion
5 Bibliography
6 Annexure
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LIST OF TABLES AND CHARTS
TABLE CONTENTS PAGE NO.
1 Meaning of business 9
2 Meaning of management 12
3 Meaning of business administration 14
4 Difference between business management and
business administration
16-18
5 Types of business 21,27,
31-36,38
6 Organizational system (General study) 40,42
7 Types of organization 43-44
8 Types of ownership 45,46,48,
50-52
9 Vision, mission & goals of the company 53-56
10 Swot analysis 71-75
11 Organizational system (gm) 76-77
12 Types of organization 79-80
13 Achievement 85-88
14 Structure of GM 93,95,95,96,98,
100-102-104
15 Functional pattern 116-117
16 Swot of GM 120-123
17 Annexure 130-133
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EXECUTIVE SUMMARY:----
GM is currently facing the most challenging time periods in its entire history.
Nevertheless, there are a few potential avenues of
Among the most promising of these is the Chinese automobile market.
of action which GM could follow
GM’s future operations in China can be summarized by the following three premises:
1. The Chinese car market will continue to grow and remain profitable, eventually
overtaking the US as the largest car market.
2. GM is very well suited to lead the Chinese premium car market as well as to efficiently
compete in the market for trucks.
3. GM will maintain long term leadership by investing in the four P’s: product, price
Processes, and Partnerships. This will ultimately improve GM’s brand, image and
reputation.
.
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MEANING OF BUSINESS:
The term business literally means the state of being busy. All human activities in the
broader sense thus may be termed as business activities. In a technical sense however,
the term business has a different meaning. The human activities may be classified into
(i) Economic activities and (ii) Non-economic activities. The former are concerned
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with production, distribution, consumption, etc. All activities which are aimed at
earning of income and generation of wealth are termed as economic occupations. The
employees performing their jobs in the employing organization, the doctors and
pleaders giving their specialist services to their patients and clients respectively, are
all economic occupations but in technical parlance these cannot be termed as business
activities. Business is an economic activity of distinct nature.
The non-economic activities do not contribute to the process of income and wealth
generation, but are undertaken out of love, affection, social, obligation, religion, etc.
According to F.C. Hooper “Business means the whole complex field of commerce
and industry, the basic industries, processing and manufacturing industries and the
network of ancillary services, distribution, banking, insurance, transport and so on,
which serve and interpenetrate the world of business as a whole”.
According to Prof. Owen defines “a business as an enterprise engaged in the
production and distribution of goods for sale in the market, or rendering of services
for a price”.
Business thus refers to the organized production and exchange of goods and services
undertaken with the object of earning profit. The production and distribution activities
performed by business concerns aim at satisfying the consumers needs and wants
which are numerous, unsuitable and recurrent. The business embraces industry, trade
and other activities like banking, transport, insurance, warehousing, etc.
Business refers to all those activities which lead to the creating of utilities and value
addition in the form of goods and services for satisfaction of human wants in return
for a price. It facilitates smooth for satisfaction of human wants in return for a price. It
facilitates smooth exchange by removing all bottlenecks or obstacles. The obstacles
are in the form of person, place, time, risk, finance, publicity, etc.
All those individuals and institutions which are continuously engaged in the recurrent
acts of buying, selling, procuring, manufacturing, processing, assembling and
distribution of goods and services to the consumers or the users with the object of
earning profit are said to be engaged in business. It is a wealth generating activity
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Characteristics
1. Distinct Ownership : The term ownership refers to the right of an individual
or a group of individuals to acquire legal title to assets or properties for the
purpose of running the business. A business firm may be owned by one
individual or a group of individuals jointly.
2. Lawful Business : Every business enterprise must undertake such business
which is lawful, that is, the business must not involve activities which are
illegal.
3. Separate Status and Management : Every business undertaking is an
independent entity. It has its own assets and liabilities. It has its own way of
functioning. The profits earned or losses incurred by one firm cannot be
accounted for by any other firm.
4. Dealing in goods and services : Every business undertaking is engaged in the
production and/or distribution of goods or services in exchange of money.
5. Continuity of business operations : All business enterprise engage in
operation on a continuous basis. Any unit having just one single operation or
transaction is not a business unit.
6. Risk involvement : Business undertakings are always exposed to risk and
uncertainty. Business is influenced by future conditions which are
unpredictable and uncertain. This makes business decisions risky, thereby
increasing the chances of loss arising out of business.
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MEANING OF MANAGEMENT:
Management is the process of planning, organizing, leading, and controlling the
efforts of organization members and of using all other organizational resources to
achieve stated organizational goals”. Management focuses on the entire organization
from both a short and a long-term perspective. Management aims to increase the
effectiveness of organizations. It's about
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Management in simple terms means the act of getting people together to accomplish
desired goals. Management comprises planning, organizing, resourcing, leading or
directing, and controlling an organization (a group of one or more people or entities)
or effort for the purpose of accomplishing a goal. Resourcing encompasses the
deployment and ...
Management is the art and science of getting things done through others, generallyby
organizing and directing their activities on the job.
In the words of George R Terry – “Management is a distinct process
consisting of planning, organising, actuating and controlling performed to
determine and accomplish the objectives by the use of people and resources”.
According to James L Lundy – “Management is principally the task of
planning, coordinating, motivating and controlling the efforts of others
towards a specific objective”.
In the words of Henry Fayol – “To manage is to forecast and to plan, to
organise, to command, to co-ordinate and to control”.
According to Peter F Drucker – “Management is a multi-purpose organ that
manages a business and manages managers and manages worker and work”.
In the words of Koontz and O’Donnel – “Management is defined as the
creation and maintenance of an internal environment in an enterprise where
individuals working together in groups can perform efficiently and effectively
towards the attainment of group goals”.
In the words of S. George – “Management consists of getting things done
through others. Manager is one who accomplishes the objectives by directing
the efforts of others”.
According to John F M – “Management may be defined as the art of securing
maximum results with a minimum of effort so as to secure maximum results
with a minimum of effort so as to secure maximum prosperity and happiness
for both employer and employee and give the public the best possible service”.
In the words of E.F.L. Brech – “Management is a social process entailing
responsibility for the effective and economical planning and regulation of the
operations of an enterprise, in fulfilment of a given purpose or task, such
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responsibility involving: (a) judgement and decision in determining plans and
in using data to control performance, and progress against plans; and (b) the
guidance, integration, motivation and supervision of the personnel composing
the enterprise and carrying out its operations”.
MEANING OF BUSINESS ADMINISTRATION:
The word “administration” is derived from the Middle English word administracioun,
which is in turn derived from the French administration, itself derived from the Latin
administratio—a compounding of ad ("to") and ministratio ("give service").
“Administration” is a broad concept open to many interpretations. In business,
“administration” typically refers to the performance or management of business
operations, involving the making or implementing of major decisions. Administration
can be defined as the universal process of organizing people and resources efficiently
so as to direct activities toward common goals and objectives
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In business, administration consists of the performance or management of business
operations, involving the making or implementing of major decisions. Administration
can be defined as the universal process of organizing people and resources efficiently
so as to direct activities toward common goals and objectives. Modern business
management theory identifies six key functions of an administrator in an organization:
Planning, organizing, staffing, directing, controlling, and budgeting. Skillful
administration is essential to the success of any business or organization and requires
a wide range of knowledge and skills.
In business administration consists of the performance or management of business
operations and thus the making or implementing of major decisions. Administration can
be defined as the universal process of organizing people and resources efficiently so as
to direct activities toward common goals and objectives.
The word is derived from the middle English word admin is traction, which is in turn
derived from the French admin is traction , itself derived from the Latin administration a
compounding of ad ("to") and ministration ("give service").
Administrator can serve as the title of the general manager or company secret any who
reports to a corporate board of directors. This title is archaic, but, in many enterprises,
this function, together with its associated Finance, personnel and management
information systems services, is what is intended when the term "the administration" is
used. In some organizational analyses management is viewed as a subset of
administration, specifically associated with the technical and mundane elements within
an organization's operation. It stands distinct from executive or strategic work.
In other organizational analyses, administration can refer to the bureaucratic operational
performance of mundane office tasks, usually internally oriented and reactive rather
than proactive.
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DIFFERENCE BETWEEN BUSINESS MANAGEMENT AND BUSINESS
ADMINISTRATION:
business management
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Business administration
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Business Management Business Administration
It puts into action the policies and
plans laid down by the
administration.
It is an executive function.
It is concerned about the
determination of objectives and
major policies of an organization.
It is a determinative function
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It takes decisions within the
framework set by the
administration.
It is a middle level activity.
It consists of owners who invest
capital in and receive profits from
an enterprise.
It is used in business enterprises.
Its decisions are influenced by the
values, opinions, and beliefs of the
managers.
Motivating and controlling
functions are involved in it.
It requires technical activities
It takes major decisions of an
enterprise as a whole
It is a top-level activity.
It is a group of managerial
personnel who use their
specialized knowledge to fulfill
the objectives of an enterprise.
It is popular with government,
military, educational, and
religious organizations.
Its decisions are influenced by
public opinion, government
policies, social, and religious
factors.
Planning and organizing functions
are involved in it.
It needs administrative rather than
technical abilities.
There can be a lot of confusion between the ‘administration’ and ‘management’ of
businesses. In the practical world of business, they are very similar, and generally
have identical functions and responsibilities. Many may think that administration is
more about paper-pushing and clerical work, while management is more about
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authority and decision-making. However, unless clearly defined by a particular
company, business management and administration are generally the same.
Professionals in management are vital to any business or organization. These
managers are relied upon to establish and implement policies, as well as strategies.
Additionally, they are expected to help people involved in the organization, work for
a common goal, in the most effective way possible. These professionals have studied
management degree programs, which have helped them become effective managers.
Management degree programs prepare individuals for planning, managing,
organizing, and running the essential procedures and tasks of organized bodies, such
as companies or firms. Courses also include many aspects that are vital to any
business, such as communications, production, logistics and purchasing, the
quantitative methods of accounting, administrative practices, decision-making,
marketing, information systems, and human resources management, and so forth.
They also handle training of the workforce.
The degree primes any person for entry-level management positions, like supervisor,
assistant manager, group leader, project manager, or office manager. The areas or
fields of work is broad, as one can work in advertising, finance, benefits
administration, insurance, human resources, wholesaling, retailing, communication,
and transportation.
Summary:
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1. Business Administration degrees are normally broader in scope, and management
can be considered as part of its extensive scale.
2. Business administration degrees offer a balanced mix of clerical, operations, and
management skills, while Management degrees, although they have aspects of
clerical and operation subjects, are more about the management of human
resources and personnel operations.
3. In reality, the lines are blurred when it comes to potential jobs and responsibilities,
as both degrees can be for the same positions.
TYPES OF BUSINESS:
Various types of business are:----
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1) Service businesses:--
Service businesses are enterprises that are established and maintained for the purpose
of providing services (rather than or in addition to products) to private and/or
commercial customers. The American Marketing Association defined services as
"activities, benefits, or satisfactions which are offered for sale or are provided in
connection with the sale of goods."
The overall service industry is regarded as an already robust one that should enjoy
considerable healthy growth rates in the future as the United States and other nations
continue to move from manufacturing-based economies to technologically advanced
service economies. "The service sector is a most attractive arena for the aspiring
entrepreneur," confirmed Irving Burstiner in Start & Run Your Own Profitable
Service Business. "Many service enterprises can be launched with far less money than
the amount of capital typically needed to open a manufacturing, wholesale, or retail
business. Many new service operators are able to begin at home, thus avoiding the
expense of renting, buying, or constructing business premises. Moreover, end-of-year
earnings in the service sector compare favorably with the profit margins enjoyed by
most other types of enterprise." In addition, service businesses enjoy several other
advantages over their brethren in other business areas. For one thing, they tend to be
local, and they often do not have to contend with the national or international
corporate giants that roam across the manufacturing, retail, and wholesale industries.
Moreover, they generally do not have to make the same levels of investment in
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inventory, raw materials, finished goods, operations, or production management as do
firms engaged in manufacturing, wholesaling, or retailing.
Of course, initial investment requirements can vary significantly from sector to sector.
While some service businesses, like book-keeping, house painting, child care, lawn
care, housekeeping, and tutoring, can all be launched with a modest investment by
individuals with special skills or knowledge in those areas, other service businesses
require a far greater investment of money. Attorneys, doctors, and other professionals
who make their living by providing their services to clients make heavy up-front
expenditures (tuition), while entrepreneurs interested in launching service businesses
that require extensive investments in facilities and/or equipment (hotels, laundromats,
car rental agencies, nursing care facilities, medical offices, etc.) have to make big up-
front expenditures of their own, albeit in different form.
Factors in Service Industry Growth
Researchers point to a number of factors that have accounted for the surge in service
business startups over the last few decades. Many of these factors reflect fundamental
changes in societal structure and character. W. F. Schoell and J. T. Ivy, authors of
Marketing: Contemporary Concepts and Practices, cited the following as major
reasons for service industry expansion in North America:
1. Increased affluence— As consumers have raised their standard of living, they have
increasingly chosen to purchase services such as lawn maintenance and carpet
cleaning that they previously took care of themselves.
2. Increased leisure time— Some segments of the population have been able to garner
larger chunks of free time; this trend, coupled with increased wealth, has spurred a
higher demand for certain service businesses such as travel agencies and resorts, adult
education courses, guide services, golf courses, health clubs, etc.
3. Changing work force demographics— Over the past few decades, increasing
numbers of women have entered the work force. This has spurred greater demand for
services in such realms as child care, housekeeping, dry cleaning, etc.
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4. Greater life expectancy— Another development that has had a particular impact on
certain service sectors, particularly in the health care industries.
5. Increased complexity of products/technological advancement—High-tech
products have created a corresponding increase in demand for specialists who can fix
and maintain those products (computers, cars, electronic equipment, etc.).
6. Increased complexity of life—Many service sectors have enjoyed tremendous
growth because of their orientation toward helping individuals and businesses stay on
top of the many facets of today's fast-paced society. Tax preparers, psychiatrists and
counselors, and legal advisors are good examples.
7. Increased environmental awareness—General trends toward increased ecological
sensitivity and enlightened natural resource management practices have spurred
growth in environmental service sectors (waste management, recycling,
environmental advocacy).
8. Increased number of available products—Technological advances have spurred
development of service industries in such areas as programming.
Types of Service Industries
Following is a representative listing of service businesses in a range of commercial
sectors that could conceivably be launched by an enterprising entrepreneur:
Professional services (physicians, pharmacists, dentists, attorneys, architects, civil
engineers)
Business services (advertising, financial planning, mailing services, computer and
data processing, consulting, training, recruiting)
Counseling services (marriage, weight loss, career planning, pastoral,
psychiatric)
Transportation services (trucking, busing, taxicab service, limousine service, car
rental)
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Personal services (pet grooming, health clubs, catering, beauticians, barbers,
hairdressers, tailors and seamstresses, photography studios, realtors, funeral parlors,
wedding planning)
Restaurants and lodging (diners, family restaurants, taverns, hotels, cottages)
Social services (individual and family services, child day care, residential
care)
Maintenance services (landscaping, plumbing and electrical, appliance, equipment,
automobile, bicycle)
In addition, many service-oriented businesses are, by their very nature, slanted toward
meeting the needs of one of two markets: individual consumers or other
businesses/organizations. Of course, some service establishments, like carpet cleaning
companies, can market their services to both client categories. But the majority of
service businesses place their emphasis on meeting the needs of one market segment
or the other. For example, a pet grooming establishment will not waste its advertising
dollars trying to reach other businesses; its primary clients are going to be individual
consumers simply because of the nature of the services they offer. Conversely, the
primary target of a company that provides security personnel is going to be
commercial establishments. Entrepreneurs that hope to market their services primarily
to organizations rather than individuals should note that, on the whole, such
businesses require greater capital investment at the outset.
2. Transportation business:--
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Transportation business concerns the movement of products from a source—such as a
plant, factory, or work-shop—to a destination—such as a warehouse, customer, or
retail store. Transportation may take place via air, water, rail, road, pipeline, or cable
routes, using planes, boats, trains, trucks, and telecommunications equipment as the
means of transportation. The goal for any business owner is to minimize
transportation costs while also meeting demand for products. Transportation costs
generally depend upon the distance between the source and the destination, the means
of transportation chosen, and the size and quantity of the product to be shipped. In
many cases, there are several sources and many destinations for the same product,
which adds a significant level of complexity to the problem of minimizing
transportation costs. Indeed, the United States boasts the world's largest and most
complex transportation system, with four million miles worth of roads, a railroad
network that could circle the earth almost seven times if laid out in a straight line, and
enough oil and gas lines to circle the globe 56 times.
Basic Means of Transportation
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There are five basic means of transporting products utilized by manufacturers and
distributors: air, motor carrier, train, marine, or pipeline. Many distribution networks
consist of a combination of these means of transportation. For example, oil may be
pumped through a pipeline to a waiting ship for transport to a refinery, and from there
transferred to trucks that transport gasoline to retailers or heating oil to consumers. All
of these transportation choices contain advantages and drawbacks.
Air transport:- Air transportation offers the advantage of speed and can be used for
long-distance transport. However, air is also the most expensive means of
transportation, so it is generally used only for smaller items of relatively high value—
such as electronic equipment—and items for which the speed of arrival is important—
such as perishable goods. Another disadvantage associated with air transportation is
its lack of accessibility; since a plane cannot ordinarily be pulled up to a loading dock,
it is necessary to bring products to and from the airport by truck.
According to Transportation and Distribution, air cargo remains a comparatively
small segment of total freight transportation volume when measured by tonnage (12.5
billion domestic ton-miles of freight annually). But L. Clinton Hoch noted in the
magazine that "access to air transportation is expected to become increasingly
important since a growing number of customers (such as hospitals and electronic
manufacturers) depend upon 'just in time' delivery systems as well as the increasing
number of high-tech industries (such as computer manufacturers) adopting the 'build-
to-order' strategy." These trends, coupled with increased pressure on consumer goods
manufacturers to deliver products quickly to 1) meet customer expectations and 2)
reduce inventory and other supply chain costs, are expected to "fuel the demand for
expedited services," wrote Hoch. "Accordingly, competition is heating up among the
major air cargo and express carriers who are building specialized hubs to handle
larger aircraft and major sorting facilities."
Railways. The rail transportation network in the United States included about
120,000 miles of major rail lines in the late 1990s, on which carriers transported an
estimated 1.3 million tons of freight annually. Trains are ideally suited for shipping
bulk products, and can be adapted to meet specific product needs through the use of
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specialized cars—i.e., tankers for liquids, refrigerated cars for perishables, and cars
fitted with ramps for automobiles.
Rail transportation is typically used for long-distance shipping. Less expensive than
air transportation, it offers about the same delivery speed as trucks over long distances
and exceeds transport speeds via marine waterways. In fact, deregulation and the
introduction of freight cars with larger carrying capacities has enabled rail carriers to
make inroads in several areas previously dominated by motor carriers. But access to
the network remains a problem for many businesses.
Motor carriers:- Accessible and ideally suited for transporting goods over short
distances, trucks are the dominant means of shipping in the United States. In fact,
motor carriers account for approximately $120 billion in annual revenue, much of it
due to local shipments (shipments to and from business enterprises in the same
community or local region). This industry sector underwent tremendous change in the
1990s with the introduction of deregulation measures that removed most state and
federal regulations in the areas of pricing and operating authority. "With few
exceptions, motor carriers are now free to operate wherever they wish and to charge
any rates that are agreeable to the shipper and the carrier," wrote Hoch, although he
noted that trucks are still subject to federal laws on vehicle specifications and the
parameters of the sanctioned truck routes of the Surface Transportation Assistance
Act of 1982.
Water transport:- Water transportation is the least expensive and slowest mode of
freight transport. It is generally used to transport heavy products over long distances
when speed is not an issue. Although accessibility is a problem with ships—because
they are necessarily limited to coastal area or major inland waterways—piggybacking
is possible using either trucks or rail cars. However, industry observers note that port
terminal accessibility to land-based modes of transportations is lacking in many
regions. The main advantage of water transportation is that it can move products all
over the world.
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2. Agribusiness:---
Agriculture business is a generic term for the various businesses involved in food
production, including farming and contract farming, seed supply, agrichemicals, farm
machinery, wholesale and distribution, processing, marketing, and retail sales. The
term has two distinctly different connotations depending on context.
Within the agriculture industry, agribusiness is widely used simply as a convenient
portmanteau of agriculture and business, referring to the range of activities and
disciplines encompassed by modern food production. There are academic degrees in
and departments of agribusiness, agribusiness trade associations, agribusiness
publications, and so forth, worldwide. Here, the term is only descriptive, and is
synonymous in the broadest sense with food industry.
Among critics of large-scale, industrialized, vertically integrated food production, the
term agribusiness is used negatively, synonymous with corporate farming. As such, it
is often contrasted with smaller family-owned farms. Negative connotations are also
derived from the negative associations of "business" and "corporations" by critics of
capitalism or corporate excess. As concern over global warming intensifies, biofuels
derived from food crops quickly emerged as a practical answer to the energy crisis.
Adding corn ethanol to gasoline or using palm oil for biodiesel makes the fuel burn
more cleanly, stretches oil supplies, and perhaps most attractive to some politicians,
provides a nice boost to big agribusiness. In Europe and in the US, increasing biofuels
was mandated by law. Rising fuel costs are increasingly adding financial burdens on
the day-to-day running of agricultural companies.
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Mining business:---
Mining is the extraction of valuable minerals or other geological materials from the
earth, usually from an ore body, vein or (coal) seam. Materials recovered by mining
include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil
shale, rock salt and potash. Any material that cannot be grown through agricultural
processes, or created artificially in a laboratory or factory, is usually mined. Mining in
a wider sense comprises extraction of any non-renewable resource (e.g., petroleum,
natural gas, or even water).
Mining of stone and metal has been done since pre-historic times. Modern mining
processes involve prospecting for ore bodies, analysis of the profit potential of a
proposed mine, extraction of the desired materials and finally reclamation of the land
to prepare it for other uses once the mine is closed.
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4.Financial business:--
Raising and managing of funds by business organizations. Such activities are usually
the concern of senior managers, who must use financial forecasting to develop a long-
term plan for the firm. Shorter-term budgets are then devised to meet the plan's goals.
When a company plans to expand, it may rely on cash reserves, expected increases in
sales, or bank loans and trade credits extended by suppliers. Managers may also
decide to raise long-term capital in the form of either debt (bonds) or equity (stock).
The value of the company's stock is a constant concern, and managers must decide
whether to reinvest profits or to pay dividends. Other duties of financial managers
include managing accounts receivable and fixing the optimum level of inventories.
When deciding how to deploy corporate assets to increase growth, financial managers
must also consider the benefits of mergers and acquisitions, analyzing economies of
scale and the ability of businesses to complement each other.
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5.Manufacturing business:---
This sector generally takes the output of the primary sector and manufactures finished
goods or where they are suitable for use by other businesses, for export, or sale to
domestic consumers. This sector is often divided into light industry and heavy
industry. Many of these industries consume large quantities of energy and require
factories and machinery to convert the raw materials into goods and products. They
also produce waste materials and waste heat that may pose environmental problems or
cause pollution.
Some economists contrast wealth-producing sectors in an economy such as
manufacturing with the service sector which tends to be wealth-consuming.[1]
Examples of service may include retail, insurance, and government. These economists
contend that an economy begins to decline as its wealth-producing sector shrinks.[2]
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Manufacturing is an important activity to promote economic growth and
development. Nations that export manufactured products tend to generate higher
marginal GDP growth which supports higher incomes and marginal tax revenue
needed to fund the quality of life initiatives such as health care and infrastructure in
the economy. The field is an important source for engineering job opportunities.
Among developed countries, it is an important
6) Real estate business:---
Real estate is a legal term (in some jurisdictions, such as the United Kingdom,
Canada, Australia, USA and The Bahamas) that encompasses land along with
improvements to the land, such as buildings, fences, wells and other site
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improvements that are fixed in location—immovable. Real estate law is the body of
regulations and legal codes which pertain to such matters under a particular
jurisdiction and include things such as commercial and residential real property
transactions. Real estate is often considered synonymous with real property
(sometimes called realty), in contrast with personal property (sometimes called chattel
or personality under chattel law or personal property law).
However, in some situations the term "real estate" refers to the land and fixtures
together, as distinguished from "real property", referring to ownership of land and
appurtenances, including anything of a permanent nature such as structures, trees,
minerals, and the interest, benefits, and inherent rights thereof. Real property is
typically considered to be Immovable property The terms real estate and real property
are used primarily in common law, while civil law jurisdictions refer instead to
immovable property
With the development of private property ownership, real estate has become a major
area of business, commonly referred to as commercial real estate. Purchasing real
estate requires a significant investment, and each parcel of land has unique
characteristics, so the real estate industry has evolved into several distinct fields.
Specialists are often called on to valuate real estate and facilitate transactions. Some
kinds of real estate businesses include:
Appraisal: Professional valuation services
Brokerages: A mediator who charges a fee to facilitate a real estate transaction
between the two parties.
Development: Improving land for use by adding or replacing buildings
Net leasing
Property management: Managing a property for its owner(s)
Real estate marketing: Managing the sales side of the property business
Real estate investing: Managing the investment of real estate
Relocation services: Relocating people or business to a different country
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Corporate Real Estate: Managing the real estate held by a corporation to support its
core business—unlike managing the real estate held by an investor to generate
income
7. Retail business:---
Retailing consists of the sale of goods or merchandise from a fixed location, such as a
department store, boutique or kiosk, or by mail, in small or individual lots for direct
consumption by the purchaser. Retailing may include subordinated services, such as
delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys
goods or products in large quantities from manufacturers or importers, either directly
or through a wholesaler, and then sells smaller quantities to the end-user. Retail
establishments are often called shops or stores. Retailers are at the end of the supply
chain. Manufacturing marketers see the process of retailing as a necessary part of their
overall distribution strategy. The term "retailer" is also applied where a service
provider services the needs of a large number of individuals, such as a public utility,
like electric power.
ORGANIZATION SYSTEM GENERAL STUDY:-
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ORGANIZATION MEANING::--
An organization is a social arrangement which pursues collective goals, controls its
own performance, and has a boundary separating it from its environment. The word
itself is derived from the Greek word organ on, itself derived from the better-known
word ergo.
In the social sciences, organizations are the object of analysis for a number of
disciplines, such as sociology, economics, political science, psychology,
management, and organizational communication. In more specific contexts,
particularly for sociologists, the term "institution" may be preferred. The broader
analysis of organizations is commonly referred to as organizational studies,
organizational behavior or organization analysis. A number of different theories and
perspectives exist, some of which are compatible, Basically, an organization in its
simplest form is a person or group of people intentionally organized to accomplish
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an overall, common goal or set of goals. Business organizations can range in size
from one person to tens of thousands.
According to Steve Reid, English Department
To me, organization is the arrangement of the larger units of meaning in a paper.
That's one of the things that's going to be very different from one course to the next.
What are the expected patterns of organization? A lab report is very different from a
scientific report, is very different from a poem, is very different from a report in the
newspaper. All of these have their own patterns of organization, all of which are
acceptable in specific disciplines.
According to Kate Kiefer, English Department
Organization typically refers to the large elements of text structure. Sometimes these
elements are formalized in practice, as in the typical lab report, through consistent use
of headings. Sometimes elements of organization are only informally acknowledged -
like the thesis of an academic paper. Most writers across the university would agree,
however, that organization refers to the ordering of ideas.
There are several important aspects to consider about the goal of the business
organization. These features are explicit or implicit. Ideally, these features are
carefully considered and established, usually during the strategic planning process.
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Types of Organization:
Static Organizations
Fixed practices, fixed size. Like static equations, these organizations have no
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variables -- time doesn't change them significantly. They persist until some new
organization occupies their niche.
Dynamic Organizations
Fixed practices, variable size. Like dynamic equations, these organizations vary in
size over time, even though their underlying practices don't change much. They go
through a single life cycle, each growing rapidly as it occupies its niche, then
declining as its competitors implement better practices that steal away its clients.
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Adaptive Organizations
Variable practices, variable size. Like complex adaptive systems, these organizations
vary their practices, seeking the constant improvement that launches life cycle after
life cycle, creating new products, services, and processes that hold on to client’s
generation after generation. They will soon motivate employees to climb adaptation
curves by using ISOPs to fairly share the wealth that each innovation creates. ISOPs
ensure that the innovator, the predecessors, and each shareholder in the corporation
benefits.
They will displace dynamic and static organizations in economic competition, so that
within a generation, most people will have learned to expect continual improvement
in their life experience. The fact that their ancestors once worked at the same job in
the same way for an entire lifetime will seem almost as incredible as the fact that
people used to stay at jobs they didn't thoroughly enjoy.
Types of Ownership:
Franchise
Franchise is one of the newest forms of business ownership. It is very much in vogue
nowadays, especially in the United States of America. In case of a franchise, the
owner gets the right to market and sell the products of another business entity that has
already established itself in the market.
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Private Limited Company
Private limited companies are mainly small or medium sized business enterprises.
They are normally owned by a particular family or by a small group of businessmen
and the ownership rights are divided among these owners. All the business decisions
are subjected to the approval of all these owners or at least the majority of these
owners.
Partnership
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In a Partnership, two or more people share ownership of a single business. Like
proprietorships, the law does not distinguish between the business and its owners. The
partners should have a legal agreement that sets forth how decisions will be made,
profits will be shared, disputes will be resolved, how future partners will be admitted
to the partnership, how partners can be bought out, and what steps will be taken to
dissolve the partnership when needed. Yes, it's hard to think about a breakup when the
business is just getting started, but many partnerships split up at crisis times, and
unless there is a defined process, there will be even greater problems. They also must
decide up-front how much time and capital each will contribute etc.
Advantages of a Partnership:
Partnerships are relatively easy to establish; however time should be invested
in developing the partnership agreement.
With more than one owner, the ability to raise funds may be increased.
The profits from the business flow directly through to the partners' personal tax
returns.
Prospective employees may be attracted to the business if given the incentive to
become a partner.
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The business usually will benefit from partners who have complementary skills.
Disadvantages of a Partnership:
Partners are jointly and individually liable for the actions of the other partners.
Profits must be shared with others.
Since decisions are shared, disagreements can occur.
Some employee benefits are not deductible from business income on tax returns
.
Types of partnership that should be considered
1. GeneralPartnership
Partners divide responsibility for management and liability as well as the shares of
profit or loss according to their internal agreement. Equal shares are assumed
unless there is a written agreement that states differently.
2. Limited Partnership and Partnership with limited liability
Limited means that most of the partners have limited liability (to the extent of their
investment) as well as limited input regarding management decisions, which
generally encourages investors for short-term projects or for investing in capital
assets. This form of ownership is not often used for operating retail or service
businesses. Forming a limited partnership is more complex and formal than that of a
general partnership.
3. Joint Venture
Acts like a general partnership, but is clearly for a limited period of time or a single
project. If the partners in a joint venture repeat the activity, they will be recognized
as an ongoing partnership and will have to file as such as well as distribute
accumulated partnership assets upon dissolution of the entity.
Corporations
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A corporation chartered by the state in which it is headquartered is considered by law
to be a unique entity,separate and apart from those who own it. A corporation can be
taxed, it can be sued, and it can enter into contractual agreements. The owners of a
corporation are its shareholders. The shareholders elect a board of directors to oversee
the major policies and decisions. The corporation has a life of its own and does not
dissolve when ownership changes .
Advantages of a Corporation:
Shareholders have limited liability for the corporation's debts or judgments against
the corporations.
Generally, shareholders can only be held accountable for their investment in stock
of the company.
Corporations can raise additional funds through the sale of stock.
A corporation may deduct the cost of benefits it provides to officers and
employees.
Can elect S corporation status if certain requirements are met. This election enables
company to be taxed similar to a partnership.
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Disadvantages of a Corporation:
The process of incorporation requires more time and money than other forms of
organization.
Corporations are monitored by federal, state and some local agencies, and as a
result may have more paperwork to comply with regulations.
Incorporating may result in higher overall taxes. Dividends paid to shareholders are
not deductible from business income; thus it can be taxed twice.
Limited Liability Company (LLC)
The LLC is a relatively new type of hybrid business structure that is now permissible
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in most states. It is designed to provide the limited liability features of a corporation
and the tax efficiencies and operational flexibility of a partnership. Formation is
more complex and formal than that of a general partnership.
The owners are members, and the duration of the LLC is usually determined when
the organization papers are filed. The time limit can be continued, if desired, by a
vote of the members at the time of expiration. LLCs must not have more than two of
the four characteristics that define corporations: Limited liability to the extent of
assets, continuity of life, centralization of management, and free transferability of
ownership interests.
Public Limited Company
The public limited companies are a type of business ownership that has very little
amount of liability. These companies have a lot of shareholders. In the United
Kingdom the term public limited company means any company that has share capital
of more than fifty thousand pounds.
Sole prorietorship
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A sole proprietorship also known as a sole trader, or simply proprietorship is a
type of business entity which is owned and run by one individual and where there
is no legal distinction between the owner and the business. All profits and all losses
accrue to the owner (subject to taxation specific to the business). All assets of the
business are owned by the proprietor and all debts of the business are the
proprietors'. This means that the owner has no lesser liability than if they were acting
as individual instead of a business. It is a "sole" proprietorship in contrast with
partnerships.
A sole proprietor may do business with a trade name other than his or her legal
name. Sometimes a sole proprietor is required to file a doing business as statement
with a local government even if it is the same as his actual name for certain types of
businesses or as a requirement to open a business banking account.
Cooperative Business Ownerships
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The cooperative business ownerships work by following a cooperative business
model. These companies have limited liabilities. The common goal of the members,
as in the case with partnerships, is making profits. All the members have the right to
play a significant role while taking business decisions.
Vision, mission & goals of the company:
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Vision:--
Members of the organization often have some image in their minds about how the
organization should be working, how it should appear when things are going well.
Corporate vision is a short, succinct, and inspiring statement of what the organization
intends to become and to achieve at some point in the future, often stated in
competitive terms. Vision refers to the category of intentions that are broad, all-
inclusive and forward-thinking. It is the image that a business must have of its goals
before it sets out to reach them. It describes aspirations for the future, without
specifying the means that will be used to achieve those desired ends.
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Warren Bennis, a noted (No. 12 spring 1999) writer on leadership, says: "To choose
a direction, an executive must have developed a mental image of the possible and
desirable future state of the organization. This image, which we call a vision, may be
as vague as a dream or as precise as a goal or a mission statement."
Mission:--
An organization operates according to an overall purpose, or mission. A mission
statement is an organization's vision translated into written form. It makes concrete
the leader's view of the direction and purpose of the organization. For many
corporate leaders it is a vital element in any attempt to motivate employees and to
give them a sense of priorities.
A mission statement should be a short and concise statement of goals and priorities.
In turn, goals are specific objectives that relate to specific time periods and are stated
in terms of facts. The primary goal of any business is to increase stakeholder value.
The most important stakeholders are shareholders who own the business, employees
who work for the business, and clients or customers who purchase products and/or
services from the business.
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Goals:---
The major outcome of strategic road-mapping and strategic planning, after gathering
all necessary information, is the setting of goals for the organization based on its
vision and mission statement. A goal is a long-range aim for a specific period. It
must be specific and realistic. Long-range goals set through strategic planning are
translated into activities that will ensure reaching the goal through operational
planning.
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Organizational structure :
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An organizational structure is a mainly hierarchical concept of subordination of
entities that collaborate and contribute to serve one common aim.
Organizational structure depends on the product to be developed. Wheelwright and
Clark define a continuum of organizational structures between two extremes,
functional organizations and project organizations. Functional organizations are
organized according to technological disciplines. Senior functional managers are
responsible for allocating resources. The responsibility for the total product is not
allocated to a single person. Coordination occurs through rules and procedures,
detailed specifications, shared traditions among engineers and meetings (ad hoc and
structured). Products that need a high level of specialized knowledge require a
functionally organized structure.
Organizational structure allows the expressed allocation of responsibilities for
different functions and processes to different entities such as the branch, department,
workgroup and individual. Individuals in an organizational structure are normally
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hired under time-limited work contracts or work orders, or under permanent
employment contracts or program orders.
The set organizational structure may not coincide with facts, evolving in operational
action. Such divergence decreases performance, when growing. E.g. a wrong
organizational structure may hamper cooperation and thus hinder the completion of
orders in due time and within limits of resources and budgets. Organizational
structures shall be adaptive to process requirements, aiming to optimize the ratio of
effort and input to output.
Main types of organizational structures are:-
(1) Formal organisational Structure:---
Formal organisational Structure Organization charts are useful for showing the
formal organizational structure and who is responsible for certain tasks. In reality,
though, the organization chart cannot begin to capture the interpersonal that make up
the informal organizational structure.
(2) Informal organisational Structure:----
Herbert A. Simon has described this as “the in interpersonal relationships in the
organization that affect decisions within it but either are omitted from the formal
scheme or are not consistent with it. For example, during a busy period, one
employee may turn to another for help rather than going through a manager. Or an
employee in sales may establish a working relationship with an employee in
production, who can provide information about product availability faster than the
formal reporting system. And anyone who has worked in an organization knows the
importance of secretaries and executive assistants, which never shows on an
organization chart. One of the first scholars to recognize the importance of informal
structures was Chester Barnard.
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3. Functional structures
Early organizational design divided enterprises into relatively simple parts, splitting
them into defined activities such as production, marketing or personnel. functional
organizations have the advantage of being simple to understand with clear lines of
command, specified tasks and responsibilities. Staff can specialize in a particular
business area such as production or marketing and follow well-defined career paths.
This is equally true of human resource specialists who can develop expertise in
specific areas such as employee relations or reward management.
4.Divisional organizations
Split into self-contained units, able to react to environmental changes as quickly as
small companies, they are also described as multidivisional or 'M-form' organizations.
(...) Divisions encourage team spirit and identification with a product or region.
Managers can develop broad skills as they have control of all basic functions. (...)
Each division is likely to have a devolved human resource function. But there is a risk
of duplicating activities between head office and divisional human resource
departments and of conflict between staff in successful and unsuccessful divisions.
5.Federations
One variant of the divisional form which has a particular relevance because of its
human resource implications is the 'federation', a loosely connected arrangement of
businesses with a single holding company or separate firms in alliance. (...) This form
of organization has attracted criticism from stock market analysts who find difficulty
in comprehending its subtle informality
6. Matrix structure
The matrix structure groups employees by both function and product. This structure
can combine the best of both separate structures. A matrix organization frequently
uses teams of employees to accomplish work, in order to take advantage of the
strengths, as well as make up for the weaknesses, of functional and decentralized
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forms. An example would be a company that produces two products, "product a" and
"product b". Using the matrix structure, this company would organize functions
within the company as follows: "product a" sales department, "product a" customer
service department, "product a" accounting, "product b" sales department, "product b"
customer service department, "product b" accounting department. Matrix structure is
amongst the purest of organizational structures, a simple lattice emulating order and
regularity demonstrated in nature.
Weak/Functional Matrix: A project manager with only limited authority is assigned
to oversee the cross- functional aspects of the project. The functional managers
maintain control over their resources and project areas.
Balanced/Functional Matrix: A project manager is assigned to oversee the project.
Power is shared equally between the project manager and the functional managers. It
brings the best aspects of functional and projectized organizations. However, this is
the most difficult system to maintain as the sharing power is delicate proposition.
Strong/Project Matrix: A project manager is primarily responsible for the project.
Functional managers provide technical expertise and assign resources as needed.
7.Pre-bureaucratic structures
Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This
structure is most common in smaller organizations and is best used to solve simple
tasks. The structure is totally centralized. The strategic leader makes all key decisions
and most communication is done by one on one conversations. It is particularly useful
for new (entrepreneurial) business as it enables the founder to control growth and
development.
They are usually based on traditional domination or charismatic domination in the
sense of Max Weber's tripartite classification of authority.
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8.Bureaucratic structures
Bureaucratic structures have a certain degree of standardization. They are better suited
for more complex or larger scale organizations. They usually adopt a tall structure.
Then tension between bureaucratic structures and non-bureaucratic is echoed in Burns
and Stalker[1] distinction between mechanistic and organic structures. It is not the
entire thing about bureaucratic structure. It is very much complex and useful for
hierarchical structures organization, mostly in tall organizations.
9. Post-bureaucratic
The term of post bureaucratic is used in two senses in the organizational literature:
one generic and one much more specific [2]. In the generic sense the term post
bureaucratic is often used to describe a range of ideas developed since the 1980s that
specifically contrast themselves with Weber's ideal type bureaucracy. This may
include total quality management, culture management and matrix management,
amongst others. None of these however has left behind the core tenets of
Bureaucracy. Hierarchies still exist, authority is still Weber's rational, legal type, and
the organization is still rule bound. Heckscher, arguing along these lines, describes
them as cleaned up bureaucracies [3], rather than a fundamental shift away from
bureaucracy. Gideon Kunda, in his classic study of culture management at 'Tech'
argued that 'the essence of bureaucratic control - the formalization, codification and
enforcement of rules and regulations - does not change in principle.....it shifts focus
from organizational structure to the organization's culture'.
Organizational Structure Corporate Theory
The first step is determining what type of organizational structure you would like to
design and implement. Some examples of structures would be, functional and
hierarchical. Next, you should develop a strategy to start organizing your business,
company, or group. How do you want it to run? From the top down, or by a matrix of
different people, such as a management department is a big decision. Once you have a
few options picked out, you can decide which option will be optimal to produce the
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results you desire.
On this site, you can find assistance on the topics above. Available to you are designs,
models, alternative ideas, and strategy examples for setting up the structure of your
business. Also available are different theories and opinions surrounding some
strategies discussed. As for smaller organizations, we can offer some public resources
to help you in your specific area. Additionally, simple versions of structures can be
found.
If you choose the options that best fit your organization then you're more likely to
succeed in your market. By having the right people in the right place, it can lead to
better networking opportunities, higher sales, increased interest in your organization,
and overall success.
Functional Patterns – people, policies, systems and problems if any :
People:- People is the most important asset for any organization . the importance of
people for any organization can be determined by following:--
Specialization - Organizational structure is a network of relationships in which the
work is divided into units and departments. This division of work is helping in
bringing specialization in various activities of concern.
Well defined jobs - Organizational structure helps in putting right men on right job
which can be done by selecting people for various departments according to their
qualifications, skill and experience. This is helping in defining the jobs properly
which clarifies the role of every person.
Clarifies authority - Organizational structure helps in clarifying the role positions to
every manager (status quo). This can be done by clarifying the powers to every
manager and the way he has to exercise those powers should be clarified so that
misuse of powers do not take place. Well defined jobs and responsibilities attached
helps in bringing efficiency into managers working. This helps in increasing
productivity.
Co-ordination - Organization is a means of creating co- ordination among different
departments of the enterprise. It creates clear cut relationships among positions and
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ensure mutual co- operation among individuals. Harmony of work is brought by
higher level managers exercising their authority over interconnected activities of
lower level manager.
Authority responsibility relationships can be fruitful only when there is a formal
relationship between the two. For smooth running of an organization, the co-
ordination between authority- responsibility is very important. There should be co-
ordination between different relationships. Clarity should be made for having an
ultimate responsibility attached to every authority. There is a saying, “Authority
without responsibility leads to ineffective behaviour and responsibility without
authority makes person ineffective.” Therefore, co- ordination of authority-
responsibility is very important.
Effective administration – The organization structure is helpful in defining the jobs
positions. The roles to be performed by different managers are clarified.
Specialization is achieved through division of work. This all leads to efficient and
effective administration.
Growth and diversification - A company’s growth is totally dependent on how
efficiently and smoothly a concern works. Efficiency can be brought about by
clarifying the role positions to the managers, co-ordination between authority and
responsibility and concentrating on specialization. In addition to this, a company can
diversify if its potential grow. This is possible only when the organization structure is
well- defined. This is possible through a set of formal structure.
Sense of security - Organizational structure clarifies the job positions. The roles
assigned to every manager is clear. Co- ordination is possible. Therefore, clarity of
powers helps automatically in increasing mental satisfaction and thereby a sense of
security in a concern. This is very important for job- satisfaction.
Scope for new changes - Where the roles and activities to be performed are clear and
every person gets independence in his working, this provides enough space to a
manager to develop his talents and flourish his knowledge. A manager gets ready for
taking independent decisions which can be a road or path to adoption of new
techniques of production. This scope for bringing new changes into the running of an
enterprise is possible only through a set of organizational structure.
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Policy:---
A policy is typically described as a principle or rule to guide decisions and achieve
rational outcome(s). The term is not normally used to denote what is actually done,
this is normally referred to as either procedure or protocol. Whereas a policy will
contain the 'what' and the 'why', procedures or protocols contain the 'what', the 'how',
the 'where', and the 'when'. Policies are generally adopted by the Board of or senior
governance body within an organization where as procedures or protocols would be
developed and adopted by senior executive officers.
The term may apply to government, private sector organizations and groups, and
individuals. Presidential executive orders, corporate privacy policies, and
parliamentary rules of order are all examples of policy. Policy differs from rules or
law. While law can compel or prohibit behaviors (e.g. a law requiring the payment of
taxes on income), policy merely guides actions toward those that are most likely to
achieve a desired outcome.
Policy or policy study may also refer to the process of making important
organizational decisions, including the identification of different alternatives such as
programs or spending priorities, and choosing among them on the basis of the impact
they will have. Policies can be understood as political, management, financial, and
administrative mechanisms arranged to reach explicit goals.
Policy addresses the intent of the organization, whether government, business,
professional, or voluntary. Policy is intended to affect the 'real' world, by guiding the
decisions that are made. Whether they are formally written or not, most organizations
have identified policies
Policies may be classified in many different ways. The following is a sample of
several different types of policies broken down by their effect on members of the
organization.
1.Distributive policies
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Distributive policies extend goods and services to members of an organization, as
well as distributing the costs of the goods/services amongst the members of the
organization. Examples include government policies that impact spending for welfare,
public education, highways, and public safety, or a professional organization's
benefits plan.
2.Regulatory policies
Regulatory policies, or mandates, limit the discretion of individuals and agencies, or
otherwise compel certain types of behavior. These policies are generally thought to be
best applied when good behavior can be easily defined and bad behavior can be easily
regulated and punished through fines or sanctions. An example of a fairly successful
public regulatory policy is that of a speed limit.
3.Constituent policies
Constituent policies create executive power entities, or deal with laws. Constituent
policies also deal with Fiscal Policy in some circumstances.
4.Miscellaneous policies
Policies are dynamic; they are not just static lists of goals or laws. Policy blueprints
have to be implemented, often with unexpected results. Social policies are what
happens 'on the ground' when they are implemented, as well as what happens at the
decision making or legislative stage.
When the term policy is used, it may also refer to:
Official government policy (legislation or guidelines that govern how laws should be
put into operation)
Broad ideas and goals in political manifestos and pamphlets
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A company or organization's policy on a particular topic. For example, the equal
opportunity policy of a company shows that the company aims to treat all its staff
equally.
The actions the organization actually takes may often vary significantly from stated
policy. This difference is sometimes caused by political compromise over policy,
while in other situations it is caused by lack of policy implementation and
enforcement. Implementing policy may have unexpected results, stemming from a
policy whose reach extends further than the problem it was originally crafted to
address. Additionally, unpredictable results may arise from selective or idiosyncratic
enforcement of policy.
Types of policy analysis include:
Causal (resp. non-causal)
Deterministic (resp. stochastic, randomized and sometimes non-deterministic)
Index
Memory less (e.g. non-stationary)
Opportunistic (resp. non-opportunistic)
Stationary (resp. non-stationary)
System:---
System (from Latin systēma, in turn from Greek σύστημα systēma, "whole
compounded of several parts or members, system", literary "composition"[1]) is a set
of interacting or interdependent entities forming an integrated whole.
Very simply, a system is a collection of parts (or subsystems) integrated to
accomplish an overall goal (a system of people is an organization). Systems have
input, processes, outputs and outcomes, with ongoing feedback among these various
parts. If one part of the system is removed, the nature of the system is changed.
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Systems range from very simple to very complex. There are numerous types of
systems. For example, there are biological systems (the heart, etc.), mechanical
systems (thermostat, etc.), human/mechanical systems (riding a bicycle, etc.),
ecological systems (predator/prey, etc.), and social systems (groups, supply and
demand, friendship, etc.).
Complex systems, such as social systems, are comprised of numerous subsystems, as
well. These subsystems are arranged in hierarchies, and integrated to accomplish the
overall goal of the overall system. Each subsystem has its own boundaries of sorts,
and includes various inputs, processes, outputs and outcomes geared to accomplish an
overall goal for the subsystem.
Very simply, a system is a collection of parts (or subsystems) integrated to
accomplish an overall goal (a system of people is an organization). Systems have
input, processes, outputs and outcomes, with ongoing feedback among these various
parts. If one part of the system is removed, the nature of the system is changed.
Systems range from very simple to very complex. There are numerous types of
systems. For example, there are biological systems (the heart, etc.), mechanical
systems (thermostat, etc.), human/mechanical systems (riding a bicycle, etc.),
ecological systems (predator/prey, etc.), and social systems (groups, supply and
demand, friendship, etc.).
Complex systems, such as social systems, are comprised of numerous subsystems, as
well. These subsystems are arranged in hierarchies, and integrated to accomplish the
overall goal of the overall system. Each subsystem has its own boundaries of sorts,
and includes various inputs, processes, outputs and outcomes geared to accomplish an
overall goal for the subsystem.
A pile of sand is not a system. If one removes a sand particle, you've still got a pile of
sand. However, a functioning car is a system. Remove the carburetor and you've no
longer got a working car.
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The concept of an 'integrated whole' can also be stated in terms of a system
embodying a set of relationships which are differentiated from relationships of the set
to other elements, and from relationships between an element of the set and elements
not a part of the relational regime.
The scientific research field which is engaged in the study of the general properties of
systems include systems theory, cybernetics, dynamical systems, thermodynamics and
complex systems. They investigate the abstract properties of the matter and
organization, searching concepts and principles which are independent of the specific
domain, substance, type, or temporal scales of existence.
Most systems share common characteristics, including:
Systems have structure, defined by parts and their composition;
Systems have behavior, which involves inputs, processing and outputs of material,
energy, information, or data;
Systems have interconnectivity: the various parts of a system have functional as well
as structural relationships between each other.
Systems have by themselves functions or groups of functions
1.An open system:-- It is any distinct entity -- a cell, a person, a forest, or an orchestra
organization -- that takes in resources from its environment, processes them in some
way, and produces output. To survive, such a system depends on its environment, and
on interactions between its component parts or subsystems. When taking an open-
systems approach, we look both inward and outward. We are interested in
relationships and patterns of interaction between subsystems and their environments
within the organization. We also look for relationships and reciprocal influences
between the organization and the environment outside its formal "boundary."
2.Closed system:--
A closed system operates out of inflexible, stuck, negative rules designed to maintain
an unchanging status quo. It is dictatorial, controlling, perfectionistic.
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In a closed system people don't talk to each other. They second-guess each other and
make assumptions. They gossip, take sides and keep secrets. They are quick to blame
other people and slow to take responsibility for mistakes, so there is minimal
accountability. People argue without getting anywhere. Conflict of any kind is usually
avoided and people will not confront a problem even when it is glaringly obvious. On
those rare occasions when there is open conflict it usually doesn't get resolved to
everyone's satisfaction because people get stuck in having to win while making the
other person wrong and needing them to lose.
As in a family, people get stuck in having the same arguments over and over and
never getting anywhere. Individuals stay entrenched in their intractable positions and
the most people are willing to budge, if at all, is by agreeing to disagree. While that
may look reasonable on the outside it doesn't actually move things forward and it
keeps problems at arms length.
That's why problems can fester away for years beneath the surface, with suppressed
angers and resentments never being voiced or addressed. But because a system must
always be in balance, whether its functional or dysfunctional, those angers and
resentments will be expressed covertly. This might take the form of undermining
other people's positions, backstabbing, spreading gossip, not passing on information,
being obstructive.
Senior management are inaccessible: phone calls aren't returned, e-mails aren't
answered; people are in meetings all the time. Personal needs are, for the most part,
sacrificed to the needs of the system, which usually means that everyone operates
with a degree of low-grade anger and frustration. Stress levels increase enormously.
SWOT analysis:-
SWOT analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or in a business
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venture. It involves specifying the objective of the business venture or project and
identifying the internal and external factors that are favorable and unfavorable to
achieve that objective.
A SWOT analysis must first start with defining a desired end state or objective. A
SWOT analysis may be incorporated into the strategic planning model. Strategic
Planning, has been the subject of much research.
Strengths: attributes of the person or company that are helpful to achieving the
objective(s).
Weaknesses: attributes of the person or company that are harmful to achieving
the objective(s).
Opportunities: external conditions that are helpful to achieving the objective(s)
Threats: external conditions which could do damage to the objective(s).
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Identification of SWOTs are essential because subsequent steps in the process of
planning for achievement of the selected objective may be derived from the
SWOTs.
First, the decision makers have to determine whether the objective is attainable,
given the SWOTs. If the objective is NOT attainable a different objective must be
selected and the process repeated.
The SWOT analysis is often used in academia to highlight and identify strengths,
weaknesses, opportunities and threats. It is particularly helpful in identifying areas
for development
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SWOT analysis template
Subject of SWOT analysis: (define the subject of the analysis here)
strengths
Advantages of proposition?
Capabilities?
Competitive advantages?
USP's (unique selling points)?
Resources, Assets, People?
Experience, knowledge, data?
Financial reserves, likely returns?
Marketing - reach, distribution,
awareness?
Innovative aspects?
Location and geographical?
Price, value, quality?
Accreditations, qualifications,
certifications?
Processes, systems, IT,
communications?
Cultural, attitudinal, behavioural?
Management cover, succession?
weaknesses
Disadvantages of proposition?
Gaps in capabilities?
Lack of competitive strength?
Reputation, presence and reach?
Financials?
Own known vulnerabilities?
Timescales, deadlines and
pressures?
Cashflow, start-up cash-drain?
Continuity, supply chain
robustness?
Effects on core activities,
distraction?
Reliability of data, plan
predictability?
Morale, commitment, leadership?
Accreditations, etc?
Processes and systems, etc?
Management cover, succession?
opportunities
Market developments?
threats
Political effects?
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Competitors' vulnerabilities?
Industry or lifestyle trends?
Technology development and
innovation?
Global influences?
New markets, vertical, horizontal?
Niche target markets?
Geographical, export, import?
New USP's?
Tactics - surprise, major contracts,
etc?
Business and product development?
Information and research?
Partnerships, agencies, distribution?
Volumes, production, economies?
Seasonal, weather, fashion
influences?
Legislative effects?
Environmental effects?
IT developments?
Competitor intentions - various?
Market demand?
New technologies, services, ideas?
Vital contracts and partners?
Sustaining internal capabilities?
Obstacles faced?
Insurmountable weaknesses?
Loss of key staff?
Sustainable financial backing?
Economy - home, abroad?
Seasonality, weather effects?
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GENERAL MOTORS
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INTRODUCTION :---
General Motors Corporation, a U.S.-based company, has been in business for 100
years, has produced nearly 450 million vehicles globally, and operates in virtually
every country in the world. While GM has recently enjoyed rapidly growing sales
and revenues outside the United States, the U.S. remains the company‘s largest
single market
country. GM is woven into the very fabric of America. It has been the backbone of
U.S. manufacturing, is a significant investor in research and development, and has a
long history of philanthropic support of communities across the country. The auto
industry today remains a driving engine of the U.S. economy, employing 1 in 10
American workers, and is one of the largest purchasers of U.S. steel, aluminum, iron,
copper, plastics, rubber, and electronic and computer chips. Indeed, GM‘s ―Keep
America Rolling‖ sales campaign, following the September 11 attacks, is credited by
many as having prevented an extended recession in 2001. It is no secret that GM, like
all domestic automobile manufacturers, has increasingly struggled over the last
several years due to increased competition from foreign manufacturers with lower
wage, healthcare and benefit costs (in part, due to having far fewer retirees to support
in the U.S., and national healthcare structures in their home countries). GM has spent
$103 billion over the last 15 years alone on these legacy costs, constraining
investment in more advanced manufacturing and product technologies and
significantly weakening the company‘s balance sheet. GM has made mistakes in the
past — in now-untenable provisions from prior collective bargaining agreements, and
insufficient investment in smaller, more fuel-efficient vehicles for the U.S. Even so,
GM still supplies one in five vehicles sold in the U.S. today. In fact, 66 million GM
cars and trucks are on this country‘s roads today, 44 million more than Toyota. As
described in Appendix A, GM has made substantial progress in narrowing the gap
with foreign competition in quality, productivity and fuel efficiency. The Plan
commits to further improvements in these and other areas critical to our long-term
success. It is also noteworthy that in other markets, such as China, Latin America and
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Russia, and where GM does not have the burden of legacy costs, the company has
recently grown rapidly and outperformed the competition. Finally, GM has never
failed to meet a Congressional mandate in the important areas of fuel efficiency and
vehicle emissions, and sets the industry standard for ―green‖ manufacturing
methods. Furthermore, the company‘s role in creating ―green‖ technology and high-
paying jobs of the future will increase substantially as a result of implementing the
Plan.
BRIEF INTRODUCTION OF GENERAL MOTORS:-
Type Limited liability company
Industry Automotive
Founded 1908
Founder(s) William C. Durant
Headquarters Renaissance Center
Downtown Detroit, Michigan, USA
Area reserved Worldwide Key people
Edward Whitacre ( Chairman)
Daniel Akerson (CEO)
Products Automobiles
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Owner(s) - United States Department of the Treasury
(61%)
-United Auto Workers Union
Voluntary Employee Beneficiary Association
(17.5%)
Canada Development Investment
Corporation -
-Bond holders of Motors Liquidation Company
(9.8%) Employees 204,000 (2009)[1]
Divisions Chevrolet
Buick
Cadillac GMC
Subsidiaries Vauxhall
AC Delco
General Motors Canada
General Motors do Brasil
General Motors India
General Motors Ventures
Global Hybrid Cooperation
General Motors South Africa
GM-AvtoVAZ
GM Daewoo (70.1%)
GM Holden Ltd
GM Performance Division
OnStar
Opel
Website GM.com
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Management:--
The Renaissance Center in Detroit, GM's world headquarters.
On July 23, 2009, GM announced its new Board of Directors: Dan Akerson, David
Bonderman, Robert D. Krebs, Patricia F. Russo and Ed Whitacre (GM Chairman and
Interim Chief Executive Officer). Board members who are not GM employees will be
paid US$200,000 annually.[17]
As of December 1, 2009, The General Motors Board of Directors accepted Frederick
Henderson's resignation. In January 2010, chairman Whitacre was appointed
permanent chief executive officer after previously serving in an interim capacity.[18]
On December 4, 2009, GM announced leadership changes in a press release.
Edward Whitacre, Jr. - Chairman of the Board of the Directors and Chief
Executive Officer
Robert A. Lutz - Vice Chairman, advisor on design and global product
development [19]
Chris Liddell - Vice Chairman and Chief Financial Officer [20]
Thomas G. Stephens - Vice Chairman, Global Product Operations [21]
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Mark Reuss - President, GM North America [22]
David N. Reilly - President, GM Europe/Adam Opel GmbH [23]
Timothy E. Lee - President, GM International Operations (Asia-Pacific, Latin
America, Africa, and Middle East) [24]
Ray Young - vice president, International Operations [25][26]
Edward T. Welburn - Global Vice President of General Motors Design,
current and only the sixth head designer.[27]
For additional senior management see GM Senior Leadership Group
Whitacre was very active in GM's advertising. He appeared in an advertisement
touting the company's 60-day, money-back guarantee soon after the company exited
bankruptcy and a television advertisement that boasted the repayment of $6.7 billion
loan from government ahead of schedule, which caused a controversy.[28] On August
12, 2010 GM announced that Whitacre would relinquish the CEO position effective
September 1, 2010 and that of Chairman of the Board at the end of the year, to be
replaced in those functions by current board member Dan Akerson.[29]GM is a
conglomerate.
Global ranking:--GM officially ranks as the world’s second largest manufacturer as
measured by OICA in 2009
Type of Organization:---
On October 19, 2009, General Motors Company completed its holding company
reorganization (the “Reorganization”). The Reorganization was conducted to
implement a new holding company structure that is intended to provide greater
financial and organizational flexibility. In connection with the Reorganization, all of
the outstanding shares of common stock and Series A Fixed Rate Cumulative
Perpetual Preferred Stock of the prior General Motors Company (“Prior GM”) were
exchanged on a one-for-one basis for shares of common stock and Series A Fixed
Rate Cumulative Perpetual Preferred Stock (“Series A Preferred Stock”) of a newly
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organized Delaware corporation (“HoldCo”) that now bears the name General Motors
Company. These new Hold Co securities were issued solely in exchange for the
securities of Prior GM in connection with a merger (the “Merger”) effected pursuant
to an Agreement and Plan of Merger, dated as of October 15, 2009, by and among
Prior GM, HoldCo and GM Merger Subsidiary Inc., a Delaware corporation and
indirect wholly-owned subsidiary of Prior GM. These new HoldCo securities have the
same economic terms and provisions as the corresponding Prior GM securities and are
held by HoldCo securityholders in the same class evidencing the same proportional
interest in HoldCo as the securityholders held in Prior GM.
The only asset currently owned by HoldCo is a 100% ownership interest in General
Motors Holdings LLC, a newly organized Delaware limited liability company
(“Intermediate HoldCo”). As a result of the Merger, Prior GM became a direct
wholly-owned subsidiary of Intermediate HoldCo.
In addition, in connection with the Reorganization:
• Prior GM was converted into a limited liability company and renamed General
Motors LLC;
• HoldCo and Prior GM entered into amended and restated warrant agreements
assigning to HoldCo all of Prior GM’s rights, duties and obligations under the
three separate warrant agreements originally executed by Prior GM in July 2009 in
connection with its acquisition of substantially all of the assets of Motors
Liquidation Company (“Motors Liquidation”). The operative provisions of the
amended and restated warrant agreements are substantially identical to the original
warrant agreements, except that the amended and restated warrant agreements
provide that the warrants issued thereunder to Motors Liquidation and the UAW
Retiree Medical Benefits Trust (the “New VEBA”) are now exercisable for
HoldCo common stock rather than Prior GM common stock;
• HoldCo entered into an agreement with Motors Liquidation and Prior GM relating
to that certain Amended and Restated Master Sale and Purchase Agreement, dated
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as of June 26, 2009, as amended (the “Purchase Agreement”), among Motors
Liquidation, MLCS, LLC (formerly known as Saturn LLC), MLCS Distribution
Corporation (formerly known as Saturn Distribution Corporation), MLC of
Harlem, Inc. (formerly known as Chevrolet-Saturn of Harlem, Inc.) and Prior GM,
which provides that in the event that Prior GM becomes obligated under the
Purchase Agreement to issue any adjustment shares to Motors Liquidation in the
form of Prior GM common stock, HoldCo would instead issue any such
adjustment shares to Motors Liquidation in the
form of an equivalent number of shares of HoldCo common stock;
• HoldCo, the United States Department of the Treasury (the “U.S. Treasury”), the
New VEBA, 7176384 Canada Inc. (“Canada Holdings”) and Prior GM entered
into a Stockholders Agreement, dated as of October 15, 2009 (the “New
Stockholders Agreement”). The New Stockholders Agreement is substantially
identical to the original stockholders agreement entered into by Prior GM, the U.S.
Treasury, the New VEBA and Canada Holdings on July 10, 2009, except that the
New Stockholders Agreement contains a provision terminating the original
stockholders agreement;
• HoldCo, Prior GM and Intermediate HoldCo entered into assignment and
amendment agreements with each of the U.S. Treasury and the New VEBA
whereby Prior GM assigned its obligations (i) as borrower under the Second
Amended and Restated Secured Credit Agreement dated as of August 12, 2009
with the U.S. Treasury (the “UST Credit Agreement”), and (ii) as issuer under the
Amended and Restated Secured Note Agreement dated as of August 14, 2009 with
the New VEBA (the “VEBA Note Agreement”) to Intermediate HoldCo. Pursuant
to the respective assignment and amendment agreements, the UST Credit
Agreement and the VEBA Note Agreement were amended to reflect the post-
Reorganization corporate structure of HoldCo and its subsidiaries. In addition,
pursuant to the respective assignment and amendment agreements, certain of the
representations and warranties, affirmative and negative covenants and events of
default will also apply to HoldCo under each of the UST Credit Agreement and
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the VEBA Note Agreement and HoldCo’s activities will be limited to those
incidental to the ownership of its subsidiaries, subject to certain exceptions,
including the incurrence of certain indebtedness permitted by the UST Credit
Agreement and the VEBA Note Agreement; and
• General Motors of Canada Limited (“GMCL”), a subsidiary of Prior GM, entered
into an amendment (the “EDC Amendment”) to its Second Amended and Restated
Loan Agreement dated as of July 10, 2009 (the “EDC Loan Agreement”) with
Export Development Canada (“EDC”). The EDC Amendment approved the
Reorganization and made certain other modifications to reflect the post-
Reorganization corporate structure of HoldCo and its subsidiaries. The EDC
Amendment also incorporated certain amendments made to the UST Credit
Agreement and VEBA Note Agreement in August 2009 so that certain
representations concerning the collateral and disclosure of information, affirmative
covenants with respect to financial reporting and notice of investments, negative
covenants with respect to incurrence of indebtedness, fundamental changes and
agreements restricting liens on assets and certain events of default, so that such
provisions would be consistent with the corresponding provisions in the UST
Credit Agreement and the VEBA Note Agreement. An Event of Default under the
UST Credit Agreement by Holdco of certain of its representations, warranties and
covenants under the UST Credit Agreement and the VEBA Note Agreement,
respectively, are an Event of Default under the EDC Loan Agreement.
Additionally, Prior GM ratified its obligations as a guarantor of GMCL’s
obligations under the EDC Loan Agreement and Intermediate Holdco entered into
a guarantee of GMCL’s obligations under the EDC Loan Agreement. Prior GM’s
guarantee of GMCL’s obligations is secured by a first priority lien on 35% of its
ownership interest in GMCL and a second priority lien on 65% of its ownership
interests in GMCL. Intermediate Holdco’s guarantee of GMCL’s obligations will
be secured by a first priority lien on 35% of Intermediate Holdco’s ownership
interest in GMCL and a second priority lien on 65% of Intermediate Holdco’s
ownership interest in GMCL when the ownership interests in GMCL are
transferred by Prior GM to Intermediate Holdco, which is expected to occur on or
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about November 2, 2009.
Prior GM continues to employ all U.S.-based personnel and operate the U.S.
automotive business.
The provisions of HoldCo’s certificate of incorporation (including the certificate of
designations for the Series A Preferred Stock) and bylaws are substantially identical
to those of Prior GM as in effect immediately prior to the Merger. The board of
directors and officers of HoldCo are the same individuals who were members of the
board of directors and officers of Prior GM immediately prior to the Merger.
Vision, mission & goals of the company:---
Vision:---
Vision Statement
The GM vision is as follows: GM’s vision is to be the world leader in transportation
products and related services. GM will earn our customers’ enthusiasm through
continuous improvement driven by the integrity, teamwork, and innovation of GM
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people.
The proposed new vision for GM is as follows: For GM to become the automotive
industry leader in alternative fueled vehicles and providing superior quality products
that global consumers call to mind when they think of quality and innovation. My
vision for GM is to be the industry leader in innovation, and where all other industry
competition strives to imitate.
Mission Statement
The current GM mission statements are as follows: Drive improvements in market
share, revenue, brands, people, responsiveness, and cost effectiveness through the
implementation of global common metrics and best practice sharing.
The new proposed mission statement will be as follows: GM will become an industry
leader, not a follower. To regain lost market share that was lost to foreign
competition, and once again be the auto industry leader in sales and market share in
today’s global market.
Values Statement
The auto industry just like the global economy is going through tremendous change,
due to rising fuel prices, and environmental worries, such as global warming. GM
must use these threats as opportunities, and take advantage of changing consumer
buying habits. GM needs to change consumer perception of the company, from a dull,
poor quality, vehicles to innovative, quality, and environmentally friendly company.
To do this GM must portray an image that states that GM values what the consumer
wants and what the environment needs. Listen to what consumers are saying directly
and indirectly about GM’s current products, and create innovative, green, vehicles
that turn consumers into customers. At the same time provide GM stakeholders pride
and financial incentives to remain with GM.
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Goals:---
General Motors Corp. is poised to take the lead in development and production of
more fuel-efficient vehicles and the conversion to alternative power, such as
electricity and hydrogen fuel cells, to power vehicles, Larry Burns, vice president of
research and development and strategic planning, said at UD on April 13.
Speaking to about 100 students and faculty, Burns said the growing demand for oil
and fluctuating prices have created serious concerns for the automobile industry,
which is almost totally dependent on gasoline.
“We are in a situation where energy is at the heart of the future of the world,” Burns
said, adding that demand for petroleum is expected to grow by 70 percent in the next
23 years. “If we have energy security concerns today, imagine what those concerns
are going to be in the year 2030. If you are in the auto business where we are 98
percent dependent on petroleum for our energy sources, imagine the business risk in
not having solutions to these issues.”
Burns said General Motors has embarked on a major research and design strategy
aimed at playing a leading role in the automobile industry while maintaining business
sustainability.
“It's really time to seize this opportunity and the opportunity that technology brings,”
Burns said. “We are seeking to improve the fuel efficiency and emissions of our
vehicles. Essentially, we want to have zero-emission vehicles, and we want to get the
car out of the energy/environmental debate. We believe the way to do that is to
displace petroleum. The key to displacing petroleum is energy diversity, using
petroleum and alternative sources of petroleum, biological and synthetic fuels and
hydrogen and electricity.”
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Burns said GM already has about two dozen vehicles in the market whose fuel
consumption averages more than 30 miles per gallon on the highway. The higher
efficiency, he said, has been made possible by innovations like active fuel
management, in which some engine cylinders shut off when a vehicle is cruising at
highway speeds, as well as energy-efficient six-speed transmissions.
Some 2 million GM cars and trucks on the road can use flex-fuel--a combination of
81 percent ethanol and 19 percent gasoline--and 400,000 more are being sold every
year, Burns said. The growing use of ethanol, he said, will not only ease dependence
on petroleum, but it will create many opportunities to make ethanol from cellulose,
which occurs naturally in plant cell walls.
In contrast, Burns said, Toyota will not produce a vehicle that can run on 85 percent
ethanol until the year 2010. “That's how much of a lead we have,” he said.
“The whole principle here is to create jobs in the United States by creating alcohol
from cellulose, keep the dollars going outside the United States to buy petroleum here
to drive our economy, and use a renewable source of energy that requires carbon
dioxide [to be] removed from the atmosphere to grow those plants,” Burns said.
In addition to flex-fuel, GM is developing more electric hybrid vehicles, beginning
with the introduction of 550 of the company's Allison hybrid buses since 2003. The
buses use energy created from braking to charge a power source for the motor, Burns
said. Electric hybrid technology has been built into the Saturn Vue and the same
system will be put in the Saturn Aura and the Chevrolet Malibu.
Burns: “We are seeking to improve the fuel efficiency and emissions of our vehicles.
Essentially, we want to have zero-emission vehicles, and we want to get the car out of
the energy/environmental debate.”
Also in development is a two-mode engine, in which a six-speed transmission is fitted
with four gears instead of six and two electric motors. The mechanical power path is
then blended with the electric power path to help capture regenerative braking power
and shut down some cylinders at cruising speeds, resulting in a 25-35 percent fuel
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efficiency. The technology will be available in the Suburban, Yukon and Escalade
sport utility vehicles later this year.
GM also is focusing on the development of variations of the electric hybrid engines to
include electric power sources that can be charged from electricity mains. Such
technology has been used in the Sequel, “the world's most advanced” hybrid vehicle,
which travels up to 300 miles on its hydrogen supply, and accelerates to 60 miles per
hour in less than 10 seconds.
Burns praised UD for its role in the development of a hydrogen fuel cell bus that was
recently unveiled on the Newark campus and said that such technology is a major part
of GM's strategy.
“It is very, very nice to see that you have a hydrogen fuel cell bus running here on
your campus,” Burns said. “You need to be enormously proud of that fact. There are
not many of those buses that exist in the world and to be able to experience this
cutting-edge technology firsthand and, importantly, to have created the relationships
that allows you to get this bus built and on your campus is something that you should
be very proud of.”
In addition to fuel sources, GM is also developing smart car systems, such as
enhancing the use of the OnStar navigation and emergency assistance systems
available on most GM vehicles by linking it to stability control systems.
“Stability control is based on steering movement, speed and chassis movement,”
Burns said. “We can share that data between cars and predict where the car will be in
the next 20 milliseconds. When we know where the cars are now, we know where
they will be, and we can avoid crashes. We can also keep the space between cars
uniform and improve traffic. Vehicle-to-vehicle communication is very exciting
technology that General Motors is pioneering.”
Burns, who oversees GM's advanced technology, innovation programs and corporate
strategy, began his career in 1969 as a member of the company's research and
development staff, where his research focused on transportation, logistics and
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production systems. He has held executive positions in several GM divisions in the
areas of product program management, quality, production control, industrial
engineering and product and business planning. In May 1998, he was named a vice
president of General Motors, with responsibility for research and development and
planning.
Burns holds a doctorate in civil engineering from the University of California at
Berkeley. He also has a master's degree in engineering/public policy from the
University of Michigan and a bachelor's degree in mechanical engineering from
General Motors Institute (now Kettering University).
DETROIT — Admitting that there has been a lot of "damage" to General Motors in
the aftermath of the federal bailout and bankruptcy, the automaker's new management
team on Tuesday pledged that there will be no more "bad behavior" or "parlor tricks"
as it makes the transition to newer products like the 2011 Chevrolet Cruze.
Mark Reuss, the new president of GM North America, and Susan Docherty, the new
GM vice president of sales, service and marketing, spent nearly an hour on a
conference call fielding questions from a sometimes hostile media. At one point, Wall
Street Journal reporter John Stoll described last Friday's management reorganization
in negative terms, saying "it feels a lot like the old GM."
Reuss fired back: "I guess that's what you feel. We're going to do different."
Both Reuss and Docherty are longtime GM executives.
Reuss told reporters that the new management team had its first meeting on Monday
and laid out its goals for the automaker for 2010.
"I'm not getting into a metric session," Reuss said, while refusing to put a number on
GM's goal for future market share and other key measurements of success. "What we
think success looks like for General Motors in 2010 [is this]. We need to repay the
money that we've borrowed [from the federal government]. Everybody in this
company wants that desperately. We want to make this country proud of General
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Motors, and we want to do that fast. The only way is with our products and how we
sell those products and how we build those products. If we can get that done, and we
can go public, and we can get the relationships of the American people back, man,
look out. And that's what we talked about yesterday."
In a rather stunning confessional, Docherty said: "What's different here is that in the
old GM, we had a tendency to buy our market share. With our focus from going from
eight brands to four brands, we're going to earn our market share. That's where the big
difference is."
Reuss added: "This is going to be a fundamental approach to being a great company.
The initiatives, the parlor tricks, that's not what's going to be going on here."
When Docherty was asked to explain her remark about market share, she added: "I'm
not proud of the fact that we've been the incentive leader. We are going to pull back
on incentives or be more strategic on incentives. As we transition from [Chevrolet]
Cobalt to [Chevrolet] Cruze, I don't want to flood the market with Cobalts while we
wait for Cruze. We don't want to jam cars on the marketplace to buy share. That's a
bad behavior. [We have to] manage the transition between old products and new
products."
The new management team clearly is grappling with a GM image problem in the
aftermath of its bankruptcy filing earlier this year. Reuss said, "There is a lot of
damage with what people see in the media and a bankruptcy on one of the biggest,
most respected companies in America."
While unable or unwilling to quantify things like future market share, GM did reveal
some key numbers in Tuesday's session. Docherty said the automaker's 60-day
money-back guarantee has resulted in 163 returned vehicles out of 300,000 vehicles
sold, as of December 6. "We're learning lots from everybody that does return," she
said.
Reuss said the automaker has taken information from one woman in Kentucky who
returned a Chevrolet Silverado and are using her complaints to improve the truck "for
Page86
the next program." Her issues included a too-small backseat, disappointing fuel
economy and paint problems.
Reuss said he is not seeking the job of GM CEO, which is up for grabs in the
aftermath of Fritz Henderson's resignation last week.
ORGANIZATION STRUCTURE OF GENERAL MOTOR:--
Board of Trustees
The responsibilities of the Board of Trustees are as follows:
To strive to continue the Foundation until the etiology, prevention, and successful
treatment of cancer have been found; to be responsible for exercising direction and
control over the property and affairs of the Foundation; to be responsible for adopting
by-laws and ensuring that their requirements are met by the various committees and
personnel; final responsibility for amendments resides with the Board of Trustees; to
indemnify members of the Foundation, Awards Assembly, Selection Committees, and
others for any liability arising from their work on behalf of the Foundation; and to
appoint members of the Awards Assembly on recommendation of the President of the
Foundation.
The Board is composed of the following individuals:
John F. Smith, Jr.
Chairman, Chief Executive Officer and President
General Motors Corporation
Detroit, Michigan
Samuel A. Wells, Jr., M.D.
President
General Motors Cancer Research Foundation
Chicago, Illinois
Joseph G. Fortner, M.D.
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President Emeritus
General Motors Cancer Research Foundation
New York, New York
Karen L. Katen
President
Pfizer U.S. Pharmaceuticals Group
Executive Vice President
Pfizer Pharmaceuticals Group
Vice President, Pfizer Inc.
New York, New York
LaSalle D. Leffall, Jr., M.D.
Professor and Chairman
Department of Surgery
Howard University School of Medicine
Washington, D.C.
Phillip A. Sharp, Ph.D.
Professor and Head
Depamnent of Biology
Center for Cancer Research
Massachusetts Institute of Technology
Cambridge, Massachusetts
Louis W. Sullivan, M.D.
President
Morehouse School of Medicine
Atlanta, Georgia
Officers of the Foundation
Page88
Chairman
John F. Smith, Jr.
President
Samuel A. Wells, Jr., M.D.
Vice Presidents
James C. Cubbin
Executive Director, Health Care Initiatives
General Motors Corporation
Christopher C. Green, M.D., Ph.D.
Director, Technology/Research Partnerships
General Motors Corporation
Secretary
Deborah I. Dingell
President, General Motors Foundation
Treasurer
Ruth Boam
Tax Officer
Kevin W. Cobb
Awards Assembly
The Awards Assembly is composed of 38 members. Each is a distinguished scientist
or physician especially knowledgeable in areas of relevance to cancer. Assembly
meetings are held two times per year or as determined by need. Members select prize
winners from the three nominations of each Selection Committee. They also elect
Selection Committee members. Awards Assembly membership is through
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appointment by the Board of Trustees on recommendation by the President of the
Foundation. Assembly membership is for four years.
Advisory Council
Membership is composed of Assembly members whose active tenure has expired.
Advisory members will be kept abreast of Assembly activities by viewing a copy of
the minutes of each meeting. Their advice may be sought on various matters which
concern the Assembly.
Selection Committees
There is a Selection Committee for each of the prizes. Each of the three committees is
composed of seven members and two alternates elected by the Awards Assembly.
Each Committee's Chairperson may add associate members and consultants, after
approval by the Foundation's President, in order to ensure adequate coverage of a
specialty of particular importance in a given year. Associate members and consultants
are nonvoting. Each Committee has a Chairperson and Vice Chairperson. Each
Selection Committee is multinational. The President of the Foundation and the
Awards Assembly Chairperson serve ex officio on each committee. Committee
membership is for two years.
Product hierarchy
In a product hierarchy, there is a separate division for each product.or major product
line. We use the term "product hierarchy" here, even though the groupings are
sometimes made along other "missionoriented" lines such as geographical regions or
market segments. Each division has a "product manager" and its own separate
departments for different functions such as marketing, manufacturing, and
engineering. General Motors was one of the earliest and best known examples of this
form with its separate divisions for Chevrolet, Pontiac, Cadillac, and other product
lines (seeChandler, 1962). In this form, the "executive office" may set long-range
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strategic directions, but it is not ordinarily involved in the operational coordination of
tasks and processors. The lack of connection with the executive office for operational
purposes is indicated by dotted lines in Figure 1. (This form is sometimes called the
"multi-divisional" form [Chandler, 1962] or the "M-form" [Williamson, 19751.) The
solution to the task assignment problem that is implied by this "pure" form is simple:
Whenever a task of a certain type needs to be done, the product manager assigns the
task to the department that specializes in that type of task. For example, in the "pure"
form of this structure, the general manager of the Chevrolet division would ordinarily
expect all new Chevrolet models to be designed by the engineering department in the
Chevrolet division. In this "pure" form, there is only one department (or one
processor) for each type of task, so the assignment decision is trivial. When a
processor fails in a product hierarchy, the product division in which the failure occurs
is disrupted, but the other divisions are not necessarily affected. For example, a major
mechanical failure at a factory that produced only Chevrolets would not have any
direct effect on the other divisions. A failure by the Cadillac marketing department to
correctly predict what their customers would want in next year's models, would not
necessarily affect the other divisions, either. Our formal model involves only the
operational coordination involved in task assignment and processing so it does not
include any interactions between the divisions of a product hierarchy. From the point
of view of this model, therefore, a product hierarchy is equivalent to a holding
company or, indeed, to a set of separate companies that do not share any resources.
Functional hierarchy
In a functional hierarchy, as shown at the bottom of Figure 1, processors of a similar
type are pooled in functional departments and shared among products. This sharing
reduces duplication of effort and allows processing loads to be balanced over all
products. For example, General Motors might need less manufacturing capacity if
instead of having to provide enough capacity in each division to meet peak demands it
could balance heavy demands for one product against ordinary demands for other
products that share the same manufacturing facility. As another example, having a
single research department in a company instead of separate research departments in
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each division might reduce the need to duplicate expensive facilities and may allow a
few people with specialized expertise to be shared among all products instead of
having to hire separate specialists for each division. (The functional hierarchy is also
sometimes called the "unitary" form or "U-form" (Williamson, 1975).) In a pure
functional hierarchy, as we have defined it, the "executive office" must coordinate the
operational processing for all products. The task assignment method implied by the
"pure" form of this organizational structure is somewhat more complicated than for
the product hierarchy, because an extra layer of management is involved: Whenever a
task of a certain type needs to be done, the executive office delegates it to the
functional manager of the appropriate type who, in turn, assigns it to one of the
processors in that department. In order to make this assignment intelligently, the
functional manager needs to keep track of the loads and capabilities of the processors
in the department. For example, if General Motors were a "pure" functional hierarchy
a central manufacturing department would contain all the manufacturing plants. The
vice-president of manufacturing and his or her staff would be responsible for
coordinating the sharing of these facilities to produce all the different kinds of cars for
all the different product lines. This overall coordination requires significantly more
information and interactions than does the simple product hierarchy. When an
individual processor fails in a functional hierarchy, the tasks it would have performed
are delayed until they can be reassigned to another processor. For example, if
General Motors had a single centralized sales and distribution department for all its
products, it would be relatively easy to shift car allocations from poorly performing
dealerships to more successful ones. If GM had a pure
product hierarchy, on the other hand, it would be very difficult to shift sales volume
of Cadillacs into dealerships that handled only Chevrolets. There is another kind of
failure however, in which the functional hierarchy is much more vulnerable. When a
functional manager fails instead of just an individual task processor, the processing of
the entire organization may be disrupted. For instance if the vice-president in charge
of all manufacturing performed very poorly, the manufacturing of all
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SWOT ANALYSIS OF GENERAL MOTOR:--
Strengths Weaknesses
1. Large Market Share :-Although GM's
market share in the US has dropped it is
still very much competitive at 26 percent.
They also have an increasing share in the
Chinese market. With the right decisions
there is no reason for GM to not become
the automotive leader it once was.
1. Behind on Alternative Energy
Movement :-This is GM's biggest
weakness. The alternative energy/hybrid
trend has begun to take place in the
automotive industry and GM has been
one step behind the competition in terms
of alternative energy vehicles. This has
led to many problems including loss of
market share and a decrease in company
profit. In order for any automotive
company to be successful from this point
forward they must be Hybrid friendly and
fuel efficient.
2. Global Experience :--As explained
above even with GM's recent decline they
still have the market share and the
experience to bounce back. They have
been a worldwide company for nearly a
century now and have established
themselves as the global leader for most
of them. If you recall I mentioned above
that a current opportunity for GM is to
expand globally and as we can see they
2. Poor Organizational Structure
As we can see in exhibit 1 of the case
GM's organizational structure seems to be
too vertically integrated. This causes a
lack of communication between
employees from top to bottom and may
have played a part in GM falling behind
on the alternative energy movement
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already have the experience to do so. It is
just a matter of the correct planning and
proper implementation of those plans that
will decided whether or not GM's goals
are achieved
3. Variety of Brand Names
GM as I mentioned has been the
automotive leader for the majority of the
last century. A large reason for that is the
wide variety of quality brand names that
appeal to all target markets. The current
GM brands include: Chevrolet, GMC,
Cadillac, Buick, Pontiac, Saturn,
Hummer, Saab, Daewoo, Opel, and
Holden.
3. Stagnant Profitability :---Looking at
GM's profit we see that they are certainly
struggling with respect to the size of their
company. Their profit margin was about
1.5% and the ROE has dramatically
decreased over the recent years dropping
to 10% in 2004. This is a situation that
shareholders will not be pleased with.
4. GMAC Customer Financing Program
Since its establishment in 1919 it has
proven to be GM's most reliable source of
revenue
4. Overly Dependent on US market
GM has become too dependent on the US
market and must take advantage of the
opportunity to
expand globally. The competition is
becoming too strong to focus on just one
country
5. OnStar Satellite Technology
Developed in 1996 OnStar currently has
over 3 million subscribers and is standard
on all GM vehicles. This technology
allows the vehicles to be tracked in the
event of an emergency or theft. It also
allows the driver and or passengers the
ability to communicate with OnStar
personnel at the click of a button.
5. Overly Dependent on General Motors
Acceptance Corporation(GMAC)
Financing
GM has become too dependent on its
financing program. Granted it is a great
strength for GM, however they once
again cannot rely solely on financing in
order to turn profit, especially if they
want to compete with Honda and Toyota
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who are rapidly growing
6. Poor Credit Status :--GM's credit status
has like everything else has been steadily
declining. Their current ratio is just
barely above 1 and their acid test is even
lower. Although, I don't see them getting
denied based on their credit at this point,
the seriousness of the matter is certainly
apparent.
Opportunities Threats
1. Alternative Energy Movement
It is obvious that GM was behind its
competition with regards to the research
and development of hybrid vehicles.
However hybrid technology is still very
much new giving GM the opportunity to
once again become the automotive
industry's leader in innovation and
technology.
1. Rising Fuel Prices
With GM being a large producer in both
trucks and SUV's, sales have drastically
decreased due to the lack of fuel
efficiency. The rise in fuel prices has
played a significant role in creating the
opportunity for development of both
hybrid and more fuel efficient vehicles.
As you will find with most threats, an
equal opportunity will usually emerge as
is the case here with GM's opportunity
mentioned above.
2. Continuing to Expand Globally.
Recently GM saw an increase in the
Chinese automotive market, which
proves their needs to be more emphasis
put on foreign markets. If GM can
2. Growth of Competitors
GM no longer has the luxury of being the
known leader in the automotive industry
and faces the reality that they are in
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infiltrate these markets and successfully
grow along with their continuing focus on
the US market they will be headed in a
positive direction.
.
serious trouble. As I mentioned earlier
Toyota took the first step in the direction
of hybrid technology and has since
drastically grown and become the
questionable automotive frontrunner to
start the 21st century.
3. Low Interest Rates
With the right marketing strategy the low
interest rates have the potential to
generate an immediate increase in sales
3. Pension Payouts.
Part of this threat is their own doing and
the other is simply unavoidable. GM is
responsible for providing generous
pension benefits to its employees, which
at the time seemed like a great idea,
however they are now experiencing
problems as more and more people begin
to collect.
4. Develop New Vehicle Styles and
Models
This is an opportunity that will never be
satisfied, meaning that GM should always
be attempting to develop the automotive
world's most popular vehicles, and as we
know, what is in today will be out
tomorrow.
4. Increased Health Care Costs
GM, like many large companies with
quality employee health care benefits, is
experiencing a large
financial hit that only gets worse as time
continues.
5. Rising Supply Costs, i.e. Steel
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Once again this threat affects the entire
automotive industry and forces each
company to cut manufacturing and
production costs as much as possible,
without taking away from the quality of
the product.
Functional pattern:-
People:---
In order for GM to remain one of the top competitors in China, it needs to invest in
human resources. In China, many people go to vocational or trade schools instead of
attending high school It would be advantageous for GM to give away scholarships and
internships for people interested in becoming mechanics. GM would offer greater
financial support for mechanics who agree to work for GM after finishing with their
training school. As part of the lock-in strategy of the plan, GM could organize meeting
and training sessions for mechanics and engineers aimed at familiarizing them with GM
models. In addition, GM should donate trucks and cars, to vocational schools for
mechanics. This will improve the company image of GM, and familiarize the people
studying at these schools with GM automobiles. This also gives GM an advantage for the
auto purchasing choices these people make in the future, since they will be
more comfortable with GM models. Finally, GM should invest in providing better
training for car dealers in GM dealerships. Currently, car dealerships in China suffer from
having inexperienced car dealers Many car dealers “know nothing about cars” and the
only training they receive comes in the form of an information pamphlet they are
instructed to read GM would greatly benefit from providing effective training to dealers
selling GM automobiles. By providing buyers with professional and knowledgeable
sellers, GM can improve the overall experience of its customers, hence build up on its
reputation, and perhaps help it to establish brand loyalty from its buyers.
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Chinese Consumers
The culture of Chinese consumers offers the opportunity for GM to gain a strong edge
over its Asian and European competitors. One of the major points is their mild dislike of
the Japanese and their strong trust of American products [5]. Due to this, GM has an
advantage in that their products will be inherently preferred over Japanese products by
some Chinese consumers. In addition, Chinese people have historically saved a higher
portion of their income. However, they are also more willing to dish out more money
when it comes to quality because of their high emphasis of self-image [5]. This creates a
dynamic where brand image and reputation play major roles in purchasing decisions,
especially for more expensive goods. Furthermore, the stimulus package recently passed
by the Chinese government promises to provide further incentives for large consumer
purchases, such as buying a car In 2009, GM employed approximately 244,500 people
around the world. The Renaissance Center, located in Detroit, Michigan, United
States, is GM's global headquarters. In 2008, GM sold 8.35 million cars and trucks
globally.[11] GM is the majority shareholder in GM Daewoo Auto & Technology Co.
of South Korea and has collaborations with Shanghai Automotive Industry
Corporation of China, AvtoVAZ of Russia, and most recently, UzAvtoSanoat of
Uzbekistan. GM has had collaborations with various automakers including Fiat and
the Ford Motor Company. GM retains various stakes in different automakers. GM's
best success internationally has been its performance in China, where GM's sales rose
66.9 percent in 2009, selling 1,830,000 vehicles and accounting for 13.4 percent of
the market
POLICIES OF GENERAL MOTOR:--
1. General Motors Company (GM) is committed to being a responsible corporate citizen,
to ensuring compliance with the letter and spirit of the law, and to promoting disclosure
and accountability regarding political contributions and expenditures.
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2. This policy supports GM’s interest in promoting public policies of concern to GM,
educating public officials about our business, and facilitating employee contributions to
political candidates through the General Motors Company Political Action Committee
(GM PAC) and various GM state political action committees, while complying with all
relevant laws and regulations governing political contributions or expenditures for
federal, state, or local elections, including the reporting and disclosure of such amounts.
3. Federal law generally does not permit contributions, including in kind contributions, by
corporations to candidates for federal office or national party committees, but
corporations may make contributions to candidates running for state or local office in
some states and may contribute to various organizations that engage in political activities.
4. GM and its employees participate in the political process as individuals and through the
GM PAC and various GM state political action committees, the purpose of which is to
contribute funds of eligible employees to political committees or candidates. These
political action committees are funded by voluntary contributions from eligible
employees. As permitted by law and authorized by the Vice President Government
Relations, corporate funds and facilities may be used to provide the administrative
support for the operation of GM political action committees.
5. Using the following criteria, GM PAC and GM state and local contributions will be
guided (pursuant to governing law) by a Steering Committee and a separate Campaign
Selection Committee appointed by the Chief Executive Officer of GM:
a. Public integrity of the candidate
b. Representation of a jurisdiction of importance to GM
c. General support for issues of importance to GM
d. Service in a leadership role
e. Nature of the opposition
f. Financial need
6. The Vice President Government Relations will review, at least annually, with the
Public Policy Committee of the GM Board of Directors all corporate political
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contributions as well as GM PAC and various GM state political action committee
contributions and expenditures and the process by which those are made.
7. To promote transparency, GM’s annual voluntary disclosure will include the following
information on GM’s publicly available website:
a. A copy of the General Motors Policy on Corporate Political Contributions and
Expenditures,
b. A list of the amount and recipient of corporate contributions to section 527
organizations,
c. A list of the names and amounts of corporate contributions made to individual
candidates for state or local office,
d. For each U.S. organization identified as tax-exempt by the Internal Revenue Service as
either a section 501(c)(6) trade association or a section 501(c)(4) social welfare
organization that receives at least $50,000 in dues or similar payments during a given
year, the portion of the payments that is identified by the organization as being used for
non-deductible political expenditures, and
e. A link to the FEC website which details employee contributions to the federal GM
PAC as well as GM PAC contributions.
8. GM will disclose the above information by March 1 of the year following the year in
which the payments were made.
9. GM will not reimburse anyone for a political contribution or expenditure.
10. GM encourages elected officials to tour GM facilities consistent with applicable laws
and policy. Candidates for public office are not permitted to use GM facilities for
campaign purposes, such as the distribution of campaign literature and making of
campaign speeches, unless authorized in advance by the Vice President Government
Relations and permitted under governing law and policy.
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11. GM has supported national party conventions and selected meetings of public
officials as an opportunity to promote our products and public policy positions. At the
time of the national political party conventions, GM will carefully consider its convention
participation and attendant opportunities to showcase its products and to support national
party committees, host city committees, or other organizations involved with the
convention.
12. Republican and Democratic Presidential candidates may visit no more than three GM
plants at the mutual agreement of GM and the National campaign headquarters of the
nominees during the election cycle. These restrictions apply not only to visits by the
candidate but also to visits by the candidate’s immediate family.
13. GM encourages personal participation by employees in the political process,
consistent with good citizenship, including exercising their right to vote. However,
employees’ political efforts, such as helping to elect a federal, state or local official, must
be on a purely personal basis, and may not in any way imply that such activities have the
concurrence or endorsement of GM. Except for participation in GM PAC and various
state political action committees or other political activity directly authorized in advance
by the Vice President Government Relations (subject to applicable laws), GM employees
may not make or offer contributions, expenditures, or assistance, on behalf of GM, in
connection with elections to public office. GM employees may not furnish services to any
candidate or his or her staff during the employee’s normal working hours or use corporate
stationery, facilities or other property to support a candidate. In addition, employees
should not use their positions or titles with GM in their personal efforts to elicit support
on behalf of a candidate or political party. All GM employees should be alert to the
possibility of actions that might be considered contrary to this policy and notify their
management if they become aware of such actions.
14. GM needs to maintain its ability to interact with a comprehensive network of thought
leaders who help shape public opinion and policy about the auto industry and at the same
time maintain the highest standards of integrity and the ethical conduct of business. To
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that end, GM may provide information to legislators, regulators and the public, in the
form of testimony, advertising, communications or information releases.
Findings:-
76 percent of U.S. consumers would switch brands based on a company’s
image and 55 percent said they always take into account a company’s ethics
and values when buying products or services.
A Wall Street Journal survey found that ethics and values were the most
important corporate attributes in assessing the value of a company.
Among large corporate Web sites, no Fortune 20 company site emphasizes its
community partnerships and community impact across the globe.
MS&L has conceived and developed a range of strong, interactive content on the site,
with input from GM stakeholders. One of the site’s key tools allows a consumer to
compare the fuel economy of any GM vehicle to any of its competitors, and to
calculate your annual fuel costs based on driving habits and local prices. An
interactive graphic showing how fuel cell vehicles work has been used in
presentations to GM directors, has been translated into four European languages and
is currently being translated into Mandarin. A Google map shows GM’s presence in
the U.S., including its hybrid buses in city transportation fleets, in-kind donations to
schools, truck donations to The Nature Conservancy, and GM facilities. A database
of profiles of GM manufacturing facilities in the U.S. gives key information about
each plant, including its community activities and the amount of waste and emissions
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it reports each year to the EPA. The database is also used on GM’s media site, and a
microsite built for journalists covering labor negotiations with the UAW.
The site has enjoyed amazing success. In 2006, more than 1.2 million unique visitors
came to the site and viewed more than 3.9 million pages. In a major independent
review of automotive web sites in 2002, GM-ability was named as an industry model
for its enhancement of GM’s corporate image.
Chevrolet cars are seen at a GM dealership in Miami, Florida August 12, 2010.
Credit: Reuters/Carlos Barria
By Clare Baldwin and Kevin Krolicki
NEW YORK/DETROIT | Tue Aug 17, 2010 7:40pm EDT
NEW YORK/DETROIT (Reuters) - General Motors Co is unlikely to file for its
initial public offering on Tuesday, three people familiar with the situation said.
Even as recently as Tuesday morning the filing had been expected on Tuesday, a
fourth person with knowledge of the preparations said.
Page104
It is unclear why the delay in the much-anticipated filing emerged but the decision on
when the paperwork for an IPO is filed with U.S. securities regulators now depends
entirely on GM and not the underwriting banks, the three sources said.
The initial S-1 filing that GM plans to make with the U.S. Securities and Exchange
Commission has been completed, they said.
Ron Bloom, the Obama appointee overseeing the government's investment in GM and
Chrysler Group LLC, declined to comment on the GM IPO on Tuesday.
Bloom, who was attending an event in Cleveland, said U.S. Securities and Exchange
Commission regulations barred him from discussing anything related to the expected
filing.
In just over a year, the No. 1 U.S. automaker has gone from bankruptcy to the brink of
a stock offering expected to be one of the largest ever.
A successful GM IPO could bolster the Obama administration's case that the bailout
of GM was a justified use of taxpayer funding.
The U.S. government stepped in with a $50 billion bailout of GM and currently holds
a 61 percent stake in the company.
GM's IPO is expected to be between $15 billion and $20 billion, which would make it
one of the largest IPOs, globally, of all time.
Its expected debut, sometime between late October and the U.S. Thanksgiving holiday
at the end of November, means that the automaker's first trades will come right
around the time of U.S. midterm Congressional elections.
Government officials and GM executives have repeatedly denied any link with the
elections.
GM earlier on Tuesday recalled more than 243,000 crossover utility vehicles, mainly
in the United States, to inspect safety belts for possible damage.
Page105
Conclusion:--
Porter’s Five-Forces Analysis
The competitive structure of an industry is another important component of
identifying factors that are a threat to diminish profitability. One of the most efficient
ways to assess competitive issues is to consider Michael Porter's five-force analysis.
Porter (1980, 1985) has highlighted five such factors: (1) rivalry between existing
competitors, (2) threat of entry by new competitors, (3) price
pressure from substitute or complementary products, (4) bargaining power of buyers,
and (5)
bargaining power of suppliers.
1. Rivalry between existing competitors
With the rise of foreign competitors like Toyota, Honda and Nissan in the 1970's and
80's, rivalry in the American auto industry has become much more intense. Firms
compete on both price and non-price dimensions. The price competition erodes profits
by drawing down price-cost margins while non-price competition (e.g., new car
rebates and interest free loans) drives up fixed cost (new product development) and
marginal cost (adding product features). One of the other reasons there is such high
rivalry is that there is a lack of differentiation opportunities. All the companies make
cars, trucks or SUVs. The competitors are compared to one another constantly. In
recent years there has been significant market share variation, another indication of
rivalry and its very strong threat to profits.
2. Threat of entry by new competitors
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The presence of new firms in an industry may force prices down and put pressure on
profits. There are, however, barriers to entry that tend to protect established firms. One
would expect the production of automobiles to require significant economies of scale,
an important barrier to entry. The new entrant would have to achieve substantial market
share to reach minimum efficient scale, and if it does not, it may be at a significant cost
disadvantage. While the evidence suggests that economies of scale in the auto industry
are substantial, there are also indications that large size may not be as important as
commonly assumed. Nevertheless, entry would represent a large capital investment to
any new firm and the body of research still indicates that economies of scale represent a
substantial barrier to entry. Consequently, entry is currently a weak threat to
profitability.
3. Price pressure from substitute or complementary products
While five-forces do not directly consider demand, it does consider two factors that
influences demand ― substitutes and complements. Although new cars generally are
slightly price elastic, suggesting few real substitutes (e.g., bus and rapid transit), the
demand for a particular model is highly sensitive to price because of the availability
of close substitutes for a given model. A change in the price of a complementary
product (e.g., gasoline, batteries, and tires) could have a significant impact on the
demand for automobiles. The rising price of gas, an important complementary
product, is likely to affect some firms more than others depending upon the vehicle
composition. Recent rising fuel prices are likely to have a greater impact on the big
three (GM, Ford Motor and Daimler-Chrysler) whose most profitable models are
energy inefficient pick-up trucks and sports utility vehicles. On balance, the overall
impact on "industry" profitability from substitutes and complements is weak to
moderate.
4. Bargaining Power of Buyers
Buyer power refers to the ability of individual customers to negotiate prices that
extract profit from the seller. Individual consumers have some influence over price
within a given dealership, but little power over manufacturers. Customers can easily,
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and with little cost, switch to other auto dealers. Furthermore, customers now have
access to market information (prices and costs) from the Internet that enhances their
negotiating power. But when you have many individual customers, each representing
a small proportion of total sales, they will have little bargaining power with
manufacturers and therefore pose a weak threat to industry profit.
5. Bargaining Power of Suppliers
Auto manufacturers require inputs-labor, parts, raw materials and services. The cost
of these inputs can have a significant effect on profitability. Whether the strength of
suppliers is weak, moderate or strong depends on how much bargaining power they
can exert. The auto manufacturers have large supplier networks that appear to exert
little bargaining power. Nevertheless, the United Auto Workers (UAW), the only
supplier of labor, has historically exerted a great deal of leverage over the benefits and
wages provided by the big three. Because of this historical dominance by the UAW
and the uncertain results of their current negotiations with the big three, one has to
characterize supplier power, at least in this segment of the American market, as a
strong threat to profits.
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BIBLIOGRAPHY
1. Robbins, Judge & Sanghi : “Organizational Behavior”, 2007, Dorling
Kindersley (India) Pvt. Ltd.
2. Greenberg & Baron: “ Behavior In Organization”,2003, Prentice – Hall of India
Pvt. Ltd.
3.L.M. Prasad: “Organisational Behavior”, 2004, S. Chand & Sons.
4.IFFCO AT A GLANCE 2006-07.
5.Dr. U. S. Awasthi, “Indian Farmers Fertilizer Cooperative Limited-
Experiences”.
6. www.iffco.nic.in
Page109
References:-
[1] http://news.bbc.co.uk/1/hi/business/7880806.stm
[2] http://www.altassets.com/casefor/sectors/2005/nz6592.php
[3] http://burnickblog.sovereignsociety.com/2008/01/chinas-car-buye.html
[4] http://news.bbc.co.uk/2/hi/business/6658583.stm
[5] http://money.cnn.com/2005/08/09/news/international/china_poll/index.htm
[6] http://www.shanghaidaily.com/sp/article/2009/200903/20090306/article_393318.htm
[7] http://fastlane.gmblogs.com/archives/2006/12/buick_is_popula_1.html
[8] http://www.nytimes.com/2009/03/05/world/asia/05china.html?_r=2&ref=asia
[9] http://www.buyusa.gov/mexico/en/automotive_manufacturing.html
[10] http://www.chinadaily.com.cn/bizchina/2008-04/22/content_6635789.htm
[11] http://www.insideselfstorage.com/articles/4a1FEAT6.html
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[12] http://www.chinacartimes.com/wp-content/china-car-sales-2008.pdf
[13] http://www.ilo.org/public/english/employment/skills/hrdr/publ/010.htm
[14]http://media.gm.com/division/2003_prodinfo/03_corporate/
03_Corporate_Manufacturing.pdf
[15]http://www.shanghaidaily.com/sp/article/2008/200812/20081218/article_384907.htm
ANNEXURE
General Motors Company today announced its first quarter 2010 results, marked by revenue of $31.5 billion and operating income of $1.2 billion. Net income attributable to common stockholders was $0.9 billion, resulting in earnings per share on a diluted basis of $1.66.
GM’s first quarter adjusted earnings before interest and tax (EBIT) was $1.7 billion, after adjusting for the favorable impact of the sale of the Saab brand.GM North America had EBIT in the first quarter 2010 of $1.2 billion, up from a loss of $3.4 billion in the fourth quarter 2009. GM Europe had a loss before interest and taxes of $0.5 billion; an improvement of $0.3 billion from the fourth quarter. GM International Operations posted EBIT of $1.2 billion, up $0.5 billion from the fourth quarter.
Cash flow from operating activities was $1.7 billion and after adjusting for capital expenditures of $0.7 billion, free cash flow was $1.0 billion. GM ended the first quarter with $35.7 billion in cash and marketable securities, including funds in escrow.“We’re pleased with our first quarter performance, in particular achieving profitability,” said Chris Liddell, vice chairman and chief financial officer. “In North America we are adding production to keep up with strong demand for new products in our four brands. We’re also steadily growing in emerging markets, keeping our costs under control, generating positive cash flow and maintaining a strong balance sheet. These are all important steps as we lay the foundation for a successful GM.”
Forward-Looking Statements: In this press release and in related comments by our management, our use of the words “expect,” “anticipate,” “possible,” “potential,” “target,” “believe,” “commit,” “intend,” “continue,” “may,” “would,” “could,” “should,” “project,” “projected,” “positioned” or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to realize production efficiencies and to achieve reductions in costs as a result of our restructuring initiatives and labor modifications; our ability to maintain quality control over our vehicles and avoid material vehicle recalls; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt, including as required to fund our planning significant investment in new technology; our ability to realize
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successful vehicle applications of new technology; and our ability to comply with the continuing requirements related to
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