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Analysis of Management of General Motors Co.

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Analyzing the Impacts of GM Management Decisions

Decisions always have direct impacts on various departments in the practice of management. Managers always affect the productivity and input that various departments bring into a firm with the management decisions that they pick to incorporate into their management strategies. Of note are the effects that management decisions have on the human resource department. The human resource department includes all the employees of a firm thereby the conclusion that it is the most important department of all that a firm has. The current paper summarizes an article regarding General Motors Co. (GM), America’s largest motor maker, and how some of its management decisions affected the human resource department. The summary is followed by an analysis of how the identified decision affected the operations and productivity of the human resource department.

The article analyzed herein is published on the Bloomberg website and it reports on some of the undertakings of GM’s Chief Executive Officer as regards to managing its huge financial resources (Welch & Green, 2015). The General Motors CEO Mary Barra is said to be in her second year into the management of the largest motor maker in the US. It is reported that in her first years into her job, she had to deal with controversies surrounding fatally defective ignition switches of the engines that GM manufactured. However, in her second year, she will need to deal with the United Auto Workers (UAW) Union which is pushing for an improvement of the terms of work of all its members. The UAW is made up of all workers working with motor manufacturing companies and from the reports in the article; its veteran members have not had a pay rise since 2007.

As can be deduced from the article, the UAW and GM are headed to contract talks. The talks will mostly be intended to revolve around the payments of the union of workers. The UAW president Dennis Williams intends to push for increased pay for entry level auto workers who currently are reportedly paid a maximum of $19 an hour. The veteran members of the union have also been promised a pay hike with president Williams promising to fight for the hike of their pay which currently stands at $28 an hour, a figure that has not changed for close to nine years now. President Williams is understood to be keen on pushing for a workers strike if GM do not commit to giving in to the demands of the UAW. This leaves the Mary Barra, GM CEO in a precarious situation given the nature of the conditions the UAW demands have on the productivity of GM.

GM is understood to be committed with other spending issues. For instance, as illustrated in the article, GM has promised up to $5 billion to shareholders in dividends and $5 billion as buyback. Maryann Keller, an independent auto consultant, summarizes that as a result of these promises, GM have no option but to give in to the demands of UAW. The members of the UAW are aiming to prosper if their demands are accepted by the management of GM and as Cindy Estrada, the UAW vice president who is in charge with GM relations says, there will be strong product investment and a healthy well positioned company. While the UAW is pushing on with its demands, it is not clear what the position of GM is on the matter regarding its workers who are members of the UAW. However, the GM chief executive officer must clear the air in good time in order to be sure that employee productivity will not be hampered.

As it is clear from the article, the push for a review in the payment terms of the UAW members is not blind to the arising issues regarding to the job security of the involved members. GM is said to have opened a branch in Mexico and the UAW is concerned that GM may move most its operations out of the US in a bid to avoid the increased expenses involving the US workforce. This prompts the UAW team to push for an assurance that nobody will lose their jobs and that GM will build new products in the US plants. As it is clear from the article, Mary Barra is in a very complicated situation in which her decisions will directly affect the way GM manages its finances while maintaining productivity of its HR department.

From the article, it is clear that Mary Barra has two options to choose from as regards to the decision she can make in the current situation at GM. The first option is to accept and give in to the demands that the UAW are pushing for. Such an undertaking will of course have a huge financial impact on GM which according to the article must maintain a $20 billion as a minimum operating balance in its adopted strategy aiming to allow a free flow of cash to shareholders. Allowing to hike the pay of both entry level and established employees as per to the demands of the UAW will see GM incur costs that may hinder its projected levels of profitability but at the same time will see a morale boost to employees. So, if the GM CEO chooses this option, she can also devise ways on how to manage the costs of production that will be consequent to raising the workers payment. Although not easy to implement, she can choose to raise the market prices of GM products so as to cater for the rising cost of production.

The second option that the CEO and GM board of managers may contemplate is to reject the push for increased pay until after a specified duration of time. It is clear that at the moment GM is quite busy with some important activities involving spending of so much money. This spending is being undertaken with an aim of streamlining the GM ventures in the market which will in turn positively reflect on the profitability of the firm with a specific range of time. Therefore, if GM is to manage its current costs, it can decide to accept the push for increased payments from the UAW but specify that it will effect the reviewed terms of payment within a time they specify. If GM manages to push for this resolution, it will avoid a crisis at the HR department which will in turn positively influence employee productivity and loyalty.

From the case of the article discussed, it is clear that it calls for experience to manage all aspects of financial spending of a firm. It is important when making decisions regarding to financial spending for a firm, those in charge ensure that the HR department is at the centre of such decisions. It is then that real success in firm management can be attained.

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