Writing in the Financial Times, John Kay offers a succinct analysis of GM's long, painful death
The factors that had once been the company’s strengths were now weaknesses. Mass production and piece-rate incentives created a workforce with little pride in the quality of the product. The cadre of professional managers became a complacent, inward-looking bureaucracy. The diversified corporation became a collection of competing baronies.
The decline of GM is as instructive as its rise. Mass production is now an activity for low-income, low-cost locations. Successful western carmakers will focus on market niches. Fordism and Taylorism, in which pay is closely related to individual performance, has had similarly dire effects on overall corporate performance – about which no one really cares – when applied to assembly lines, boardrooms and trading floors. The challenge of how to reconcile professional management with a culture of innovation remains for ever a central issue for management thinkers.
If the success of GM defined the management agenda for the 20th century, its failure equally defines the management agenda for the 21st.
How likely is it that, with the same management, this shrunken dinosaur can prosper in a new world?
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