Applied Strategic Management Speech or Presentation

Applied Strategic Management - Speech or Presentation Example It is alleged that the main problem was complacency in the area of management and absurd demands from the UAW, for instance, the Jobs Bank paid workers around 95% of their previous wages until the organization found them a job and the management was reluctant to solve the problems (Ingrassia 87). It is alleged that one thing that the General Motors did right was to lead Detroit in establishing a joint venture with the Japanese companies that helped Ford and Chrysler to equally engage into partnerships. Consequently, they were able to see first hand how the Japanese worked to ensure a competitive advantage. During this period, they learned that the Japanese registered higher profits because they kept their inventories lean, did not keep the store weeks’ worth of parts at great costs unlike the Detroit, and practiced just in time delivery to ensure timely supply of the materials. Moreover, unlike Detroit, the Japanese motivated their workers by rewarding them. Consequently, this gave them a competitive edge (Ingrassia 78-79). Despite what the three big companies learnt from the Japanese, they failed miserably during the recession period that saw competition heighten. Between 1979 and 1982, Chrysler and Ford lost around $ 5billion, while the General Motors lost $763 million. Consequently, other people were affected, like in the case of the employees whereby, around 250,000 of them got fired (Ingrassia 80) It is argued that people panic when gas prices go up to an extent of vowing to drive less and to purchase vehicles with better mileage. However, when the gas prices go down, the people go back to their old behavior as well as the actions that had initially created a market for big trucks and SUV’S. For instance in the 1980s, when the gas prices started to drop, Americans started buying the big cars just like before (Ingrassia 85). It is claimed that organizations end up selling their jets during unstable economic times and even buy better models onc e the risks are over. Additionally, the unions end up giving wage benefits and hikes only to realize that the management has heightened their bonuses and the retirement figures (Ingrassia 88-92). Consequently, this creates conflicts and long term hatred; hence, destroying all efforts to have a collaborative partnership that is required to have an effective and a successful organization. Various reasons have been linked to the challenges that faced the ‘big three’. For instance, after the US engaged in the Persian Gulf War, the economic recession heightened as the sale of cars dropped. During this period, General Motors lost around $2 billion. Instead of correcting the situation, the company ended up coming up with rigorous management strategies such as layoffs followed by plant closings. Subsequently, the company went into bankruptcy following the poor management by the CEO, Stempel. As a result of poor management and lack of rational changes, GM, Chrysler, and Ford con tinued to record more losses. The companies tried to reorganize, diversify and form joint ventures with no success. The Japanese companies such as Toyota, Nissan, and Honda, on the other hand, continued to expand and register higher profits than that of Detroit as they launched new brands such as Acura and Lexus