Comments on: General Motors and Organization Design

By: Lead and Gold

Lead and Gold — Thu, 05 May 2005 12:42:06 +0000

Size does matter

There is a post over at Chicago Boyz–”GM and Organizational Design”– that illustrates how diseconomies of scale can work.

By: j.scott barnard

j.scott barnard — Wed, 04 May 2005 16:03:58 +0000

Plastic doesn’t seem to hold the paint well. Perhaps it’s just my perception, but if you look at old Saturns notice how many of them seem faded.

By: David Foster

David Foster — Wed, 04 May 2005 11:13:44 +0000

GE is not a model of central control at all, quite the opposite. The individual strategic business units (aircraft engine, appliance, power generation, financial services, etc) have tremendous autonomy. This has been somewhat reduced under the Welch regime from what it was before in the sense that interdivisional cooperation (viz, turbine business helps appliance with compressors) has been pushed, but is still much greater than in most companies. In addition, there is considerable decentralization *within* some of the business units.

I’m speaking about of operational and strategic control…legal and internal-financial matters are more centralized in order to insure integrity.

Of course, this kind of “federal decentralization” (Drucker’s term) is easier to achieve in a multiproduct/multimarket business than in something like an auto company.

By: Bob

Bob — Wed, 04 May 2005 05:31:40 +0000

I liked the plastic body panels, but that’s just me. They are expensive to make though espicially in mass compared to steel.

On the independance of Saturn, GM, in the past has suffered from great redundance between divisions in such things as engine design (witness the seperate Cadillac, Chevrolet, Pontiac, and Olds V-8 families) So…I would there is a bit of backlash from that going on.

Central control is not an absolute evil in a well run large corporation (GE, and some of the larger pharmaceutical firms come to mind). Its sort of like