Monday, March 21, 2011

GM- Good Intentions, Bad Planning

This post is focused on the leadership tactics that should have been implemented to accomplish the intended results that were attempted with the wrong steps. The article I am discussing covers the topic of GM making its big green steps, more specifically in 2010 when the company announced Chevrolet brand planning to invest $40 million towards carbon offsetting projects. They saw this an opportunity to increase their reputation and customer loyalty by jumping onto the recently "fashionable" environmentalism trend. This could be seen as an opportunistic move by investing a large sum of money now with the hopes for it to pay off in the long run. What the CEO, Dan Akerson failed to look into is how this move would directly impact the company. This generosity ends up being marely a charitable donation at the cost of shareholders' money which may or may not significantly improve public's perception of the company due to the demonstrated corporate social responsibility. That is too great of a cost to pay even with the best intentions. While a combination of supportive and directive leadership styles are necessary to lead the company towards change, an internal analysis of the company should have taken place. Deciding to invest in a project based on CSR does not ensure any certain positive results given that some still argue the true effectiveness of CSR. A bigger, more direct connection to the company's production of vehicles, operations or even internal structure is needed to make this investment worthwhile." Looking at successful CSR examples, from GE and Wal-Mart to M&S and Toyota, you find different stories and approaches, but with a common ground. They all chose to focus on initiatives that were tied to, and effectively integrated, their core business operations and strategy, and thus created shared value – making meaningful social impact and strengthening their long-term competitiveness at the same time."  I think that this to some degree applies to Hill's Model of Leadership where GM could have used the path through the internal leadership actions towards task and ending with goal focusing. They did not consider the potential this project could have had within the company and only focused on the big picture. Applying more work force internally on extensive research they could have discovered the goal (of directly affecting their production) and made it their primary focus, which would have been a much more effective way of using $40 million while still emphasizing dedication to the corporate social responsibility.

Do you have any suggestions as far as where the $40 million could have been used more effectively?

What other leadership styles are applicable to this situation?

Mingaile Orakauskaite

1 comment:

  1. CSR can be a hard sell for many, especially if you are a shareholder looking for the company to make a short-term profit. Shareholders should invest in companies they believe are doing the right thing and not expect them to return the biggest return possible.
    Also, CSR needs to be strategically integrated into a business and not just be done for the sake of it. GM needs to be highly supportive and even directive in sharing its CSR vision with its shareholders. Shareholders are obviously committed to the company but GM must make them aware of the long term benefits associated with implementing CSR.

    Kellen Hill