VIOLATIONS OF FINANCIAL MANAGEMENT

GM bailout with the bankruptcy

GM bailout with the bankruptcy

Introduction

"There is no doubt that creativity is the most important human resource of all. Without creativity, there would be no progress, and we would be forever repeating the same patterns." - Edward de Bono

The above saying could not be truer, more so in today's business context. Organizations are trying to find new and inventive ways of first creating and then holding on to their competitive advantage (Class notes) and being creative is one way they can achieve that. Creativity is a very misunderstood term in organizations. It is thought to be the creation of “something out of nothing” whereas it actually is “the radical and effective change of something understood deeply” (Robinson and Hackett 1997). General Motors is certainly trying to appreciate this, and the company is always seeking to bring new products - or improvements to their current products - to market.

Company Background

General Motors Corporation, also known as GM, is the world's largest automaker and has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall. GM has and is supporting two and a half pensioners for every employee. It is the largest health care provider in the world. General Motors, writes a prescription every 1.5 seconds for drugs for their retirees and others — 1.5 seconds, 24 hours a day, seven days a week, 365 days a year — cost approaching $6 billion a year.

Vision

GM's vision is to be the world leader in transportation products and related services. 'We will earn our customers' enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people'. - (GM Website)

Mission

GM is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that customers will receive superior value while employees and business partners will share in the success and their stock-holders will receive a sustained superior return on their investment.

Company Strategy

General Motors has a broad differentiation of products with five divisions which include five market segments. They also mass produce their vehicles and give their customers the option of upgrading from to one GM brand to another.

GM Europe has been a loss maker for four years. During the last financial year, the European operations racked up net losses of $286m, down from $549m the previous year.

And GM's overall sales growth in Europe continues to be held back by other models that are showing their age. GM Europe's approach to the UK market is also criticised by motoring industry experts who bemoan the car maker's lack of commitment to convert some key Saab and Cadillac models to right-hand ...