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GENERAL MOTORS 9
General Motors
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STUDY GUIDE FOR DECISION SCENARIO CASES
1
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Analyzing a Decision Scenario Case
This study aid is divided into two parts. The first part organizes your notes and thinking about the case. The second organizes the points you want to make for an essay on the case. (For a detailed explanation of how to analyze a decision scenario, see chapter 4.)
To begin your work, think about the following questions:
What is the decision that needs to be made in the case? Example: Should Trendway make changes to its production line?
David Schramm, the chief engineer for Cable and Component Design (CCD), has to decide whether General Motors needs to commit to the RIM grommet for a 1992 model year car. The Product, Process, and Reliability (PPR) committee has the final responsibility to commence the new product development. Still, they have given Schramm the responsibility to analyze and recommend their decision (Mann, 1987).
What are the major decision options? Example: The Company can expand its current production line, improve its yield, or build a new line with advanced technology.
The company’s major decision is whether they can commit to this 1992 model year car production. This decision might positively impact the company in terms of yields and their automobile industry if they buy into the decision to make the model. Schramm needs to analyze that decision before recommending it (General Motors Corporation, 1968).
Exploring the Decision Options
What questions will help you decide which decision option is best? Example: Which option yields the best financial results for Trendway?
What is best for the General Motors brand? Will the decision to commit to the 1992 model year car yield the company financial results? Will this decision put the company at the top of the automobile industry charts?
What concepts and frameworks might help answer your questions? Example: The concepts of unit cost and breakeven help compare the three decision options’ financial impact.
Committing to the 1992 model year car might be the best option for General Motors since it might be a success, causing a sales turnover rate. This new production could put the company in the charts, thus improving their people’s perception and their brand name (Patrick J. O’shaugnness Kathryn E. stock, 1996).
Use the following grid to organize your thinking about the decision. Use your questions to study the evidence and identify the decision criteria. Please write down the criteria, the case evidence relevant to them, and which decision option the evidence supports. Your goal is to determine the most strongly supported option by the evidence. You can defer thinking about action steps if you’d rather focus on the decision first.
Example: Should Trendway expand its current production line, improve its yield, or build a new line capable of producing future products?
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Possible Criterion: Financial impact of the decision
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Facts/Evidence
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What the evidence indicates about the decision options
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Short-term steps
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Long-term steps
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To achieve a low unit cost, General Motors have first established and grew its production of new automobiles.
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The evidence favors the short-term steps since, at the moment, they are not doing so well in the market, but if they commit to the new production, then the case may change, especially in the market line.
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Preparation for a new production line to make room for the 1992 model year car’s new advancement.
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Possible Criterion: Brand reputation
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For General Motors to improve their brand reputation, they need to develop new and improved merchandise.
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The evidence favors the long term steps since if the company happens to produce new and improved merchandise, it will boost its image and name.
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Committing to the new 1992 model year car to improve the company reputation and brand name
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Possible Criterion: People perception
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Most people have a foul taste of the brand General motors since they got called out for producing merchandise with fuel inefficiency. Committing to this new brand might change that.
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The evidence favors the long term since they now have to improve the quality of their new products to change people’s perception of their brand.
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Creating the 1992 model year car with new and improved standards ensures they have put the fuel efficiently.
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232 STUDY GUIDES FOR CASE ANALYSIS AND WRITING
Ready to Recommend a Decision? Based on your analysis, recommend a decision option and then state the major reasons that support your recommendation.
The evidence you compiled above is critical to proving the decision you recommend.
What decision do you recommend? Example: Trendway should invest in a new production line.
General Motors should commit to the production of the that1992 model year car.
What are the major reasons that support your recommendation? Example: The new line will make Trendway more competitive in the medium-to-long term.
This commitment will put General Motors in the high charts again with their competitors in the market. It will help build its brand reputation since it will have implemented a new model with new and improved standards.
What are the major risks of your recommended decision? Example: A major downturn in the market could greatly reduce or eliminate the new line’s financial benefit.
If General Motors commits to the decision and then the market anticipation is low, the company could experience huge financial losses. This could reduce the benefit of the new yields and cause them to suffer huge losses (the United States. Congress. Senate. Committee on the Judiciary, 1956).
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II. Writing about a Decision Scenario Case
This section helps you organize the content of an essay about the case you’ve analyzed. Arrange the criteria in order of importance, from most important to least. The evidence should show how each criterion supports your recommended decision. (For a detailed explanation of how to write a decision scenario essay, see chapter 9.)
Recommended decision
Summary of major reasons for a recommended decision
EVIDENCE PROVING RECOMMENDED DECISION
Criterion 1
Financial impact
By producing this new automobile, the company will experience huge financial returns.
Brand reputation
Committing to a new make with the correct specifications may help them build up their brand name to the big leagues.
Competitive ability
If General Motors produces a new automobile, it will be back in the market to go against its competitors.
People perception
If they commit to this new model and build it according to its specifications, this might help the people change their view on how they view the company.
Action Plan
Identify the high-level goals for your action plan. In other words, how do you want the action plan to change the situation in the case? (For a detailed explanation of how to write an action plan, see chapter 8.)
234 STUDY GUIDES FOR CASE ANALYSIS AND WRITING
Short term Steps
Involve all the employees to ensure that we are all working towards building the new 1992 model year car.
Find out what other people think about this decision to determine whether it is the company’s best idea (Mann, 1987).
Long term Steps
Ensure that this new model is in line with all the product specifications and requirements.
Set aside the budget for this new commitment.
Major risks: Identify the most important one or two risks associated with your action plan.
Some employees may not be open to committing to working long hours or go the extra mile.
Finances may not be enough to the commitment, which might impact the production (General Motors Corporation, 1968).
Mitigation of risks: How would you eliminate or reduce the risks?
Allocate enough finances for the commitment to avoid delays.
Retain only the committed and productive employees for the project(Mann, 1987).
References
General Motors Corporation. (1968). The automobile industry: A case study of competition.
Mann, E. (1987). Taking on General Motors: A case study of the campaign to keep GM van Nuys open. The University of California Inst.
Patrick J. O’shaugnness Kathryn E. stock. (1996). Case study: Tool management at General Motors powertrain willow run plant.
The United States. Congress. Senate. Committee on the Judiciary. (1956). A study of the antitrust laws: General Motors [Corporation.
