General Motors and the Chevy Cobalt Ignition Switch Crisis

General Motors and the Chevy Cobalt Ignition Switch Crisis Description

It was Saturday, March 29, 2014, and Mary Barra, Chief Executive Officer (CEO) of General Motors (GM), was reading a letter of invitation from the families of Chevy Cobalt crash victims to meet with her the following week. The timing could not have been worse. Barra was scheduled to testify before the U.S. Congress on Tuesday, April 1st regarding the recalls of 2005-2007 model year Chevrolet Cobalts. Just the day before, on Friday, March 28th, GM had announced a third Chevy Cobalt recall. In total, 4.8 million vehicles worldwide had been recalled in connection with an ignition switch defect. There had been fatalities. It was Barra's 10th week on the job as GM's CEO. On February 7, 2014, just days before Barra had become CEO, GM had informed the National Highway Traffic Safety Administration (NHTSA) that a problem existed with the 2005-2007 model year Chevy Cobalt. GM stated in its report to the NHTSA that the problem appeared to be centered on the vehicles' ignition switch. The ignition switch's "torque performance" on these vehicles had not met GM's engineering specifications. The switches were easily jostled, and when jostled, the switches would sometimes move out of the "Run" position, causing the vehicle to stall. GM further explained that, depending on the timing of the switch moving out of the "Run" position, the airbags would not deploy. A vehicle stall, combined with the vehicle's airbags not deploying, had been a lethal combination. Following the first Cobalt recall in January 2014 and the NHTSA report in February, events had escalated rapidly. Lawyers across the U.S. had organized a class action lawsuit against GM. The U.S. Justice Department and the NHTSA had launched investigations. The media response had been hostile. Barra had been summoned to appear before the U.S. Congress. Beyond the public fallout was a large question: How could GM have ignored such a basic safety issue for such a long period of time? Such a situation suggested that there might be fundamental organizational issues within the company that needed repair as well. How was Mary Barra, CEO of GM, going to manage this crisis? The first decision would be whether to meet with the families of Chevy Cobalt crash victims.

Case Description General Motors and the Chevy Cobalt Ignition Switch Crisis

Strategic Managment Tools Used in Case Study Analysis of General Motors and the Chevy Cobalt Ignition Switch Crisis

STEP 1. Problem Identification in General Motors and the Chevy Cobalt Ignition Switch Crisis case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of General Motors and the Chevy Cobalt Ignition Switch Crisis case study

STEP 3. Industry Specific / Porter Five Forces Analysis of General Motors and the Chevy Cobalt Ignition Switch Crisis case study

STEP 4. Evaluating Alternatives / SWOT Analysis of General Motors and the Chevy Cobalt Ignition Switch Crisis case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis General Motors and the Chevy Cobalt Ignition Switch Crisis case study

STEP 6. Recommendations General Motors and the Chevy Cobalt Ignition Switch Crisis case study

STEP 7. Basis of Recommendations for General Motors and the Chevy Cobalt Ignition Switch Crisis case study

Case Analysis of General Motors and the Chevy Cobalt Ignition Switch Crisis

General Motors and the Chevy Cobalt Ignition Switch Crisis is a Harvard Business (HBR) Case Study on Leadership & Managing People , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. General Motors and the Chevy Cobalt Ignition Switch Crisis is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. General Motors and the Chevy Cobalt Ignition Switch Crisis case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. General Motors and the Chevy Cobalt Ignition Switch Crisis will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

General Motors and the Chevy Cobalt Ignition Switch Crisis case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Leadership & Managing People, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of General Motors and the Chevy Cobalt Ignition Switch Crisis, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The General Motors and the Chevy Cobalt Ignition Switch Crisis case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Leadership & Managing People Solutions

In the Texas Business School, General Motors and the Chevy Cobalt Ignition Switch Crisis case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – General Motors and the Chevy Cobalt Ignition Switch Crisis

Step 1 – Problem Identification of General Motors and the Chevy Cobalt Ignition Switch Crisis - Harvard Business School Case Study

The first step to solve HBR General Motors and the Chevy Cobalt Ignition Switch Crisis case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Cobalt Gm is facing right now. Even though the problem statement is essentially – “Leadership & Managing People” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Cobalt Gm, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the General Motors and the Chevy Cobalt Ignition Switch Crisis.

The external environment analysis of General Motors and the Chevy Cobalt Ignition Switch Crisis will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in General Motors and the Chevy Cobalt Ignition Switch Crisis case study. PESTEL analysis of " General Motors and the Chevy Cobalt Ignition Switch Crisis" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with General Motors and the Chevy Cobalt Ignition Switch Crisis macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for General Motors and the Chevy Cobalt Ignition Switch Crisis

To do comprehensive PESTEL analysis of case study – General Motors and the Chevy Cobalt Ignition Switch Crisis , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact General Motors and the Chevy Cobalt Ignition Switch Crisis

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on General Motors and the Chevy Cobalt Ignition Switch Crisis

Government policies have significant impact on the business environment of any country. The firm in “ General Motors and the Chevy Cobalt Ignition Switch Crisis ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Cobalt Gm is operating, firms are required to store customer data within the premises of the country. Cobalt Gm needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. General Motors and the Chevy Cobalt Ignition Switch Crisis has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Cobalt Gm in case study General Motors and the Chevy Cobalt Ignition Switch Crisis" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Cobalt Gm in case study “ General Motors and the Chevy Cobalt Ignition Switch Crisis ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Cobalt Gm in case study “ General Motors and the Chevy Cobalt Ignition Switch Crisis ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on General Motors and the Chevy Cobalt Ignition Switch Crisis

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ General Motors and the Chevy Cobalt Ignition Switch Crisis ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Cobalt Gm can compete against other competitors.

Government Scheme & Subsidies Impact on General Motors and the Chevy Cobalt Ignition Switch Crisis

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at General Motors and the Chevy Cobalt Ignition Switch Crisis case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on General Motors and the Chevy Cobalt Ignition Switch Crisis

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Cobalt Gm needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact General Motors and the Chevy Cobalt Ignition Switch Crisis

Social Factors that Impact General Motors and the Chevy Cobalt Ignition Switch Crisis

Technological Factors that Impact General Motors and the Chevy Cobalt Ignition Switch Crisis

Environmental Factors that Impact General Motors and the Chevy Cobalt Ignition Switch Crisis

Legal Factors that Impact General Motors and the Chevy Cobalt Ignition Switch Crisis

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in General Motors and the Chevy Cobalt Ignition Switch Crisis case study. PESTEL analysis of " General Motors and the Chevy Cobalt Ignition Switch Crisis" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: General Motors and the Chevy Cobalt Ignition Switch Crisis case study solution