General Motors organisational structure

Established in 1908, General Motors (General Motors 2010) is now America’s largest automaker, selling and servicing vehicles in some 140 countries around the world (General Motors 2010). With its global headquarters in the United States of America, GM employs approximately 204,000 people in every major region of the world ranks highest in terms of 2009’s global revenues among automakers on the Fortune Global 500 (CNN Money 2010). This paper identifies General Motors’ organisational structure and design as well as explores the impacts of General Motors on the environment and vice-versa.

General Motors’ Organisational Structure and Design Mullins (1993) explains the organisational structure to be the pattern of relationships between roles in an organisation and its different components. Designing the structure of an organisation remains as a core competency required of a manager (Miller 1989) but this vital role has been forgotten too many a time. It is also crucial that managers learn about the importance of organisational design in transforming organisational structures and processes to boost performances (Hatch & Cunliffe 2006). Organisations can be designed to be multinational and/or multidivisional and GM appears to possess the characteristics of both.

Multinational A multinational organisation does business in two or more countries. It locates its headquarters in a particular country and the organisation’s culture and structure take after the headquarters’ practices and corporate beliefs. In addition, throughout the course of everyday operations, factors of technical know-how, labour routine and regulations will be homogenised (Hatch & Cunliffe 2006). GM operating in over 35 different countries around the world is thus regarded as a multinational organisation. It situates its headquarters in Detroit, USA whereby its organisational culture is moulded by its group of dedicated employees committed to pursuing goals GM set out to achieve (General Motors 2010).

Multidivisional Multidivisional organisations generally arrange their employees into sets of functionally structured units that report to a centralised headquarter (Hatch & Cunliffe 2006). GM is multidivisional since it is one of the early adopters of Sloan’s ‘M-structure’ in America. This was due to the fact that GM operates in numerous countries and they then started to use organizational charts to identify divisional structures. The chain of command within organisations can be better comprehended and independent markets can be clearly determined (Daft 2007). However, such a structure would call for a need to erect new appointments of division general manager; look into the evaluation of performances; and explore incentives for managers in boosting efficiency (Clegg, Kornberger ; Pitsis 2005).

How General Motors Has Affected the Environment and Vice-Versa Resource-Dependency Theory

Robbins and Barnwell (2006) feel resource-dependency theory “highlights the interaction of the organisation and its environment” by drawing on the approach of the open system to advocate the means of which the organisation is reliant on the environment for its resources. Being dependent on the setting’s resources gives suppliers the expanse of exercising a large extent of authority on organisations.

The resulting vulnerability of organisations further leads to them being susceptible to the demands of their dealers and firms have found it a resistant challenge to break away from this dependency. It is almost a knee-jerk effect that organisations will attempt to diminish the impact of its resource dependence as much as possible. GM has, over the years, achieved recognizable success in lowering its level of uncertainty over supply issues by ensuring supplier diversity.

It accomplishes this by not relying on a sole supplier nor just a mere few of them, but by establishing steady links with approximately 600 credible dealers. Not only that, GM finds resource security in making certain its supplies are derived from numerous geographical locations as well as from dealers of differing backgrounds. The former greatly lowers the risks of threatened adversities occurring from concerns like union protests, governmental regulations and even climatic catastrophes, all of which are usually localised issues. The latter not only provides opportunities for “minorities, women, and small businesses” (General Motors 2010) but also gives GM an advantage in being less dependent on a single type of supplier. GM today collaborates with more than 200 certified minority and female-governed firms and commits to mentoring their top suppliers to ensure high productivity rates (General Motors 2010).

Stakeholder Theory Stakeholder theory holds that companies operate under socially responsible terms that assure a specific set of rights to stakeholders that are crucial to their progress. Organisations that are cautious to stakeholder requirements will achieve greater successes (Hatch & Cunliffe 2006). GM.COM (2010) identified that society is the basis of stakeholder relationship with General Motors. Society expects organizations to be environmentally and climate friendly in their operations and GM has reciprocated by building greener cars and manufacturing battery operated electric cars. General Motors’ constantly emphasizes on doing what is best for customers in order to serve them better. GM has also indicated that dealership and customers are of their greatest importance.


Globalisation describes an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and trade (Daft 2007). Globalisation has emerged to be an almost conspicuous and often debated aspect of today’s society. GM’s stability in the global economy is indeed a remarkable feat and much of it has to be attributed to its efforts in the intercontinental market.