...General Motors Case Study #3 Problem Summary: One of the most serious problems that GM faces is when the firm announced a $10.6 billion loss, which was their first in 12 years. The auditors for General Motors even thought that the firm’s survival was in substantial doubt even if they received the additional $30 billion they were going to borrow from the federal government. The problems have grown as a result of mistakes by GM’s management over the last 30 years. They built up a bloated bureaucracy that supplied boring, low-quality cars for many years. GM will also lose leadership of the United States market, having already been replaced by Toyota as the world’s largest automaker. GM has been burdened with a high cost structure result of contracts that they signed in order to end a prolonged strike by the United Automobile Workers. They faced the biggest challenge in dealing with health and retirement benefits that GM had. The huge costs made it difficult to cut back on the productions of GM, even if that meant they had to rely on incentives to get the cars of the lots. They were also struggling with the sales of their lineups of passenger cars. Some people think that GM will not be able to move fast enough on their reorganization in order to become competitive again, and that they will fail in the meantime. Analysis: GM faces millions of dollars in losses; due to the government loans they were receiving in order to hopefully accomplish some restructuring play. ...
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...Case 34 General Motors What are key forces in the general and industry environments that affect the U.S. auto industry, and General Motors? General Motors (GM) has suffered different threats and difficulties that have put in risk the continuity of its production. Before the year 2000, GM has been going through different production, financial, and development problems. Wagoner has tried in different ways to address each problem in order to make GM more successful. Unfortunately GM had high losses that have made it very difficult to solve those problems. All this is due to a very competitive environment in each there were different forces that affect the development of the firm. According to Porter’s Five-Forces Model of the Industry, there are five aspects to analyze, the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and services, and the intensity of rivalry among competitors in an industry. First, the threat of new entrants highly affected the firm. GM has so many divisions and units which made the firm weak in its integration. GM had 27 different units within the firm that purchase parts that made it difficult to achieve economies of scale. All those units worked independently and do not contribute each other. In other to solve that, Wagoner started working to integrate each unit, especially overseas. Also, he took the decision to reduce the number of units and divisions which...
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...Organization and Management – Assignment 1 I. Information General Motors (GM) was one of the market leaders in automobile production prior to the 1980s and 1990s. Under the supervision of Alfred P. Sloan Jr., GM developed 5 independent divisions that marketed their own line of cars. These divisions – Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac – catered to different economic price ranges. This organizational design led to GM being the world’s largest manufacturing organization during the post-World War II era. However, during the 1980s, GM experienced its first loss since 1921. The newly appointed CEO Roger Smith began redesigning GM’s organizational structure to push decision making down to the operational level instead of the management level. He created two different groups, the BOC – composed of the Buick, Oldsmobile and Cadillac divisions, and the CPC – from the Chevrolet, Pontiac and GM of Canada. Each group had complete authority to organize whichever way they wanted and to do what was necessary to bring GM back into a good economic status. The BOC group organized four independent strategic business units, which was reminiscent of the previous organizational structure of GM. The CPC group on the other hand, moved towards the traditional centralized organizational structure. Upon the appointment of Jack Smith as CEO of GM in 1993, he carried out what would seem as harsh measures for GM. He eliminated a lot of staff by combining different...
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...Case – 1 ALEXANDER GAVIN’S DILEMMA: CULTURAL RELATIVISM AND BUSINESS AS USUAL April 10, 1983 Dear Professor Hennessey: I have not talked with you since my participation in The Executive Program at Tuck School in the summer of 1978. Many times I’ve hoped I might come back to visit but my life has been one surprise after the other, and I have been too busy to take any vacations in recent years. I want to tell you about a situation that happened to me recently. I know you will be interested in it, and if you have time I’d like you to tell me what you would have done had you been in my position. As I think you know, I am Senior Project Manager for the El Sahd Construction Company in Kuwait. The company is a prosperous one, with an excellent reputation for producing in a timely and cost-effective way on major construction projects in the Middle East. The Chairman and Chief Executive Officer is a wellknown Kuwaiti and my direct boss is another American expatriate who is Senior Vice President for urban construction projects. Two months ago, we put in a bid to be the principal subcontractor on a project in Iran. Our bid was $30 million, and we expected to bargain with Ajax, Ltd., the British-based company asking for the bids. We had built a heavy profit into the $30 million. I was asked to go to Tehran on March 3rd to talk with the Ajax manager of the major project. That manager told me that we were going to get the job. I was delighted. The job meant a lot to us. We had...
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...Established in 1908, General Motors (GM), with its headquarters based in Detroit, Michigan was one of the world's largest automakers in the world. Their business operate in 140 countries with an employment of 204000 people, and together with their strategic allies, they produce cars and trucks in 34 countries (General Motors, 2010). However, in June 2009, GM filed for bankruptcy protection and reach out to U.S government for financial assistance (Taylor III, 2009). In this essay, a look will be taken at the nature of GM’s organizational structure such as its organizational design and how GM’s operation is conceptualized, as well as its existence as an organization. How GM and the environment affect each other will be discussed too. GM was born out as a conglomerate of firms (Bordenave & Lung 2003). From a multinational organization with a headquarter set in Detroit and unified products, design and manufacturing resources throughout its field of business, GM was quick in moving itself out to become a global organization whereby they valued diversity and flexibility to match with the changing pattern of opportunities and threats posed in the industry sector. They actually diverged from Ford’s monolithic structure, gained own corporate stability and shortly after, challenge Ford’s hegemony internally and globally (Bordenave & Lung 2003). A division of labour is set up, whereby production has been divided into different skills and tasks spread across countries (Hatch & Cunliffe...
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...MGT430 Business Government & Society Mr. Burt Case Study 2 Please read Case Study: The Jack Welch Era at General Electric in Chapter 5 and answer questions 1 & 3. Please submit the answers by the end of week #3. At least one page is required. Answer Did GE in the Welch era fulfill its social responsibility duty? Could it have done better? What should it have done? Chapter 5 in the text, Business, Government, and Society by John F. Steiner and George A. Steiner, corporate social responsibility is defined as the corporate duty to create wealth by using means that avoid harm to, protect, or enhance social assets. General Electric in the Jack Welch Era fulfilled its corporate social responsibility but by marginal measures. Yes, GE fulfilled its economic responsibilities to society but it is a corporation’s duty to go beyond the lawful execution of their economic functions. Thus, in my opinion, GE could have done better, much better considering its huge financial successes from 1981 through 2001. According to the text, in spite of GE’s financial net earnings of $12.7 billion in 2000, it only donated less then 0.003% of its earnings towards grants for colleges, universities, and nonprofit groups. Additionally, GE won political campaigns to lower taxes in the states in which they operated; this ultimately lowered school budgets, negatively impacting resources available for education. This is further illustration that GE could have made more contributions to society...
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...GM591F Leadership and Organizational Behavior Case Study Group development Christine’s group is now facing the storming stage of team development. This is the point when there are high emotions and tension between the members of the team. During this stage there may be conflict, arguments, hostility and possibly fighting. Separate cliques may form within the group and each group may begin to compete against one another. During the stage of storming communication may be cut off and assumptions are made. Social loafing may occur as a result of the storming phase. The separation between teams may cause certain members to withdraw from the group because they may not have the personality to handle conflict. This is an issue because that team member will stay away from meetings in fear of having to confront or be confronted by the issues present. Another reason for the storming phase is due to the personalities of each member surfacing. If Christine was familiar with the storming stage of team development she may have recognized the red flags leading up to this phase. The text describes recognition of the storming pressures that should result in establishing goals and expectations. Once Christine recognized the storming was beginning, she should have taken the initiative as a leader to redirect the focus from the negative to working towards confronting the obstacles that were going to change the focus of the original task at hand. Problem Identification The primary issue...
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...Corporate Taxation | Case Study Analysis | Section 37: General Deductions | By | K Srilekha MBA | | I. FACTS: The assessee company who carried on the business of manufacture of silk was a member of Indian Silk Mills Association. The members entered into a working time agreement to restrict the working hours of the looms to 42 hours per week, so that over-production could be avoided. But, the members could transfer these loom hours amongst themselves. The assessee purchased loom hours from two members for a consideration of Rs 20 lakhs for a period of 6 months. The assessee claimed deduction of Rs. 20 lakhs as business expenditure, under section 37(1) of Income Tax Act. Is the claim justified? II. ANALYSIS OF FACTS: Each member of the association was manufacturing less than what it could have, if it was working full time. The members agreed to such an agreement as otherwise there would have been over-production of silk. The loom hours could be traded for, if you had an excess of them. Loom hours are the number of hours that you work your looms (mills) for. Section 37 speaks about ‘General Deductions’: Any expenditure not specifically covered by sections 30 to 36 is deductible under section 37, if the following conditions are satisfied: a) It should be in respect of business carried on by the assessee b) It should have been laid out or expended wholly or exclusively for the purpose of business c) It must have been incurred in the previous...
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...Chapter I THE PROBLEM This chapter discusses the problem of the study. It contains the background and rationale, statement of the problem and objectives, significance, scope and limitation, research design and methodology of the study. 1.1 Background and Rationale of the Study Due to increase in population size, the world today craves for a higher consumption of biodiesel, vegetable oil, health supplements, cosmetics and other food and non – food products that people cannot live without. One main source of these products is African Oil Palm. According to Escobar et al. (2008) the African Oil Palm is the most productive species among oleaginous plants. It is a traditional native crop for the West and Central African communities, occurring between Angola and Gambia. This plays a major part of the culture of Africans and they use it both in the household and in the market. The quest for renewable energy has intensified since the escalating price of crude petroleum in the recent years. Renewable energy such as biodiesel has the potential to replace petroleum – derived transportation fuel in the future. Biodiesel is a renewable and biodegradable diesel fuel extracted from plant oil. It is a natural hydrocarbon with negligible sulfur content which will substantially help in reducing emissions from diesel – fed engines. According to the study conducted in Malaysia, the African Oil Palm has properties and potential for making biodiesel. Due to this discovery, African Palm Oil...
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...Case Study: Dollar General 1. Dollar General is a discount retailer that have proven to be a strong competitor because it offers a small selection of products at lowers prices. This allows customers from different economic backgrounds to afford their products and be a one-stop shop where individuals can pick an item and head to the register- it is convenient for small items. With its limited items and $1.00 pricing strategies, they create a high level of sales while remaining a competitor to industries such as Walmart. Other retailers are stocked heavily with a variety of different products, but the Dollar General has a select stock, usually composing of items such as party supplies. 2. The Dollar General used its own name to differentiate itself, everything being a dollar. This makes consumers aware of their stores because people like low priced convenience items. People want to save money and even when individuals incomes are over $50,000 they are still price conscious. These stores are aimed at individuals who need quick, in and out items at a low rate. They generally target consumers who have lower incomes, but are becoming more common in suburban areas. In my hometown suburban area, we do have a Dollar General so it shows they are targeting different, smaller locations to have stores in. This company selects a variety of convenient but quality brand name items, which differentiates them even more. They want consumers to change their shopping habits and go to stores with...
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...General Motors Case Study Paper The main problem that General Motors was facing was declining market shares and a changing industry, General Motors (GM) launched an ambitious effort that transformed its supply chain and made customer satisfaction a priority (Cohen & Roussel, 2005). In the late 1990s, the Internet seemed poised to transform the automobile industry. Consumers armed with information could quickly compare prices, options, quality, and service—and make more informed choices. General Motors observed these changes warily. By the late 1990s the need for change was becoming clear. Consumers were more savvy, powerful, and demanding. Yet GM's responsiveness lagged the industry (Cohen & Roussel, 2005). Dealers grew increasingly frustrated by the mix of inventory foisted on them. Even in key markets, dealer lots were clogged with over 100 days of supply. To clear out slow-moving products, GM had to offer sales incentives, which squeezed profit margins (Cohen & Roussel, 2005) Dealers couldn't get the vehicles they wanted—the vehicles their customers wanted. Desirable options such as aluminum wheels, leather interiors, and V8 engines often were not available in adequate quantities. Unavailable options, or constraints, were high at GM dealerships relative to the industry as whole, averaging tens of thousands of orders affected at any given time over the range of GM products (Cohen & Roussel, 2005). Patrons who chose to special-order a vehicle...
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...Microbiology lab study guide Exam 1 Know step by step instructions on use of microscope to view a specimen (image remains in focus even when changing objective lens – parfocal) * Bright field- Dark image against bright background. * Dark field- Field surrounding the specimen appears black while object is brightly illuminated. * Phase contrast- Specimens appear as various levels of “darks” against a bright background. * Fluorescence- fluorescence dye is used which emits fluorescence under UV light.. * Total Magnification = Magnification by the objective lens X Magnification by ocular lens. * FOCUS MICROSCOPE PROPERLY by starting with scanning lens and moving up each objective, using scope’s parfocal property Know step by step instructions for ocular micrometer calibration using the stage micrometer * Calibration = Stage Micrometer /Ocular Micrometer * Stage Micrometer: mm convert to um * Ocular Micrometer: 0 – 100 Ocular Units * EX: 0.2mm X 1,000 um = 200 um * 1mm * Placed stage micrometer superimposed by the ocular micrometer. * First left line of the ocular micrometer aligned with one of the marks on the stage micrometer * EX 25 of ocular micrometer on 8 major lines of the stage micrometer are perfectly aligned= 800 µm ÷ 25 ocular units = 32 um/OU * Record more than one measurement * Calibrate each magnification * Know the different parts of the microscope...
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...2011 and 2010 (75.5 million) while the treasury stock increased from 2615.2 to 3210.3 million, which means the Company didn’t issue any “authorized but previously unissued shares” this year but satisfied the exercise of employee stock options by using the treasury stock they bought in fiscal year 2011. 2. Based on the assumptions used for the Black-Scholes option-pricing model as disclosed in the notes to the financial statements, as well as the market price of the stock on the last day of fiscal years 2011 and 2010, determine whether the change in value of each assumption (and stock price) between 2010 and 2011 positively or negatively impacts the estimated fair value of the options granted during 2011. (page 33) As disclosed in General Mills’ 10-K, the market price of the stock on the last day of fiscal years 2011 and 2010 are $37.38 and $27.99, respectively, while the estimated fair value of stock options in 2011 and 2010 are $4.12 and $3.20, respectively. The increased market price can be a strong supporter to the increased estimated fair value. Then the change in value of each assumption in Black-Scholes option-pricing model can affect the estimated fair value in different direction: 1) Risk-free interest rate decreased from 3.7% to 2.9%, which negatively affect the estimated fair value of the stock options 2) Expected term remains the same in 2011 and 2010. It didn’t impact the estimated fair value. 3) Expected volatility decreased from 18.9% to 18.5%. As we know...
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...General Mills Inc.—Understanding Financial Statements Teaching Notes: This is the first case we use in our course and it sets the tone. We find that using a company well-known to students piques their interest and gets the course off to a good start. The purpose of the case is to gain familiarity with financial statements and to begin to think about how financial statements reflect economic events and financial performance. Some students need to be reminded that the point of the exercise is not to perform a comprehensive analysis of the company. At this point, most students do not have the required skills. Rather, the goal is one of discovery. Many students find that they understand a lot more of the information in the financials than they thought they would. Others find that the vocabulary bogs them down. They need to be encouraged to learn the language of business. A productive exercise is to have students jot down a few (3-5) items they find puzzling in the financial statements. Then, on the last day of class, have the students refer back to their list. Typically, they understand everything they had on their day-one list. This provides tangible evidence of the value of the course because most students are pleasantly surprised at how much they have learned. The case probes the three basic statements as well as the two opinions issued by the firms’ auditors. This provides the opportunity to introduce the notions of corporate governance and ethics. The case includes basic questions...
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...The directors of Toyota Motors India were held responsible for the dead of one individual when the airbags in his car did not work. The case was dropped only after the company agreed to compensate the family of the deceased. Not only can lawsuits be filed against the directors by outsiders, it can be filed by the company itself and even the shareholders. A shareholder lawsuit was filed against General Motors that alleged the board of directors did not perform its duty in preventing the mounting losses from the sale of vehicles with faulty and deadly ignition switches. In Iredand a legal action against four former directors of the Irish Nationwide Building Society had to be settled out of court. This was done when a group of shareholders accused the directors for the loss incurred by the company due to the non profitable investments made by the board. In India , when a bus belonging to Orbit Transportation Company was involved in a hit and run case , the opposition parties demanded the removal and arrest of the Deputy Chief Minister of Punjab who happened to be a director of the...
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