OBAT WORK26 Part 1 Understanding the Workplace
Questions
1. In dollars-and-cents’ terms, why did Katriona Roeder
want to reduce turnover?- What are the implications from this case for motivat-
ing part-time employees? - What are the implications from this case for manag-
ing in future years when there may be a severe labour
shortage?
4. Is it unethical to teach supervisors “to demonstrate
interest in their employees as individuals”? Explain.
5. What facts in this case support the argument that
OB should be approached from a contingency
perspective?
Source: Based on K. H. Hammonds, “Handle With Care,” Fast
Company,August 2002, pp. 103–107.CBC VIDEO CASEINCIDENT
GM Woes
In 32 countries around the world, General Motors (GM) pro-
duces approximately 20 000 cars and trucks each day. With
over 300 000 employees, it may be the largest employer on
the planet. However, once a highly profitable, successful com-
pany, GM is now struggling. Its inability to adapt to changing
times and changing tastes has led to a steadily shrinking mar-
ket share. Does GM have enough gas for the long haul?
Japanese and Korean automakers have muscled onto
GM’s turf, outspending GM two to one on research & devel-
opment. For example, Toyota rolls out smaller, more fuel-
efficient cars that consumers want and continues to build
new assembly plants in North America. Toyota Canada
enjoyed its biggest-ever Canadian sales month in April 2006,
despite overall industry sales being down by 5 percent from
last year. In contrast, GM took a major hit in April 2006
when it discontinued the deep discounts and incentives it
was using to boost profits—sales for the month were 18.8
percent lower than sales in April 2005.
Joseph D’Cruz, business professor at the University of
Toronto, equates GM’s situation to that of a huge powerful
ship, stuck in a sea full of dangerous icebergs. The treach-
erous thing about an iceberg, D’Cruz notes, is that you can
see only 10 percent of it above the surface. D’Cruz sees five
key problems lurking below the surface at GM, divided into
two categories: people problems and production problems.
People problems include GM’s crushing health care costs,
a pension plan that is seriously underfunded, and a rigid
top-down management structure known more for bureau-
cracy than decisiveness. Health care costs for GM’s American
workers have been in the spotlight, and for good reason.
GM spent $5 billion (US) on health care costs in 2005, with
more than $1 billion spent on drugs alone. Health care adds
$1500 to the costs of every vehicle GM produces in the
United States. It’s a cost that GM’s Japanese and Koreanrivals, who have a younger workforce, don’t face. As a result,
GM is threatening to cut health care for tens of thousands
of its retired employees and is pressuring its unions to re-
open contracts and give back some of the health benefits
they won at the bargaining table.
On the production front, GM produces too many brands
and a vehicle lineup that does not excite customers. Even
GM bosses admit their vehicles don’t have the same piz-
zazz they once did. The pressure to build more stylish vehi-
cles is urgent because the competition is doing so.
The spike in oil prices has also hurt sales of GM’s most
important vehicle, the Sports Utility Vehicle (SUV). With gas
prices heading higher and higher, consumers are now
demanding fuel-efficient vehicles.
The problems are deep and vast at GM, says D’Cruz, and
with all the menacing icebergs he believes it should seek
help from the courts and apply for bankruptcy protection
in the United States while it reorganizes itself. Swamped
with so many problems, GM faces a turbulent future.Questions
1. GM was compared with the Titanic.Do you agree
with this comparison? Why or why not?- What challenges does GM face at the organizational
level? - What challenges does GM face at the individual and
group levels?
Sources: “GM Woes,” CBC—The National,July 6, 2005; “Toyota
Canada Has Huge Month,” Daily Courier (Kelowna), May 3, 2006,
p. B3; and J. Hyde, “Foreign? American? Auto Parts Go Global: U.S.
Cars Add Content from Other Countries,” Knight Ridder Tribune
Business News,May 7, 2006, p. 1.