A CONCEPTUAL STUDY OF BUSINESS MANAGEMENT AND ORGANIZATION SYSTEM

SUBMITTED BY Kakul trivedi

Under the guidance of Prof. Gurutej sir

Excel Business Academy Ullal Main Road Bangalore

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STUDENT DECLARATION

I hereby declare that the project report entitled a conceptual study of business management and organization system Genearl motors. has been done by me under the guidance of Prof. Gurutej , MBA & PGPM, Excel Business Academy, Bangalore. This project report has been submitted to Excel Business Academy, Bangalore as a part of partial fulfillment for the award of the degree of Post Graduate Program in Management from Excel Business Academy, Bangalore.

I also hereby declare that this project report has not been submitted at any time to any other institute or university for the award of any degree.

Place: Bangalore Date: kakul trivedi

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CERTIFICATE BY GUIDE

This is to certify that Kakul Trivedi bearing Reg no. ESB/2010/AUG/MBA/007, a student of MBA+ PGPM during the academic year 2010-2012 has successfully completed the project report a conceptual study of business management and organization system GENERAL MOTORS. Under the guidance of Prof. GURUTEJ, Excel Business Academy, in partial fulfillment for the award of Post Graduate Program in Management + mba from Excel Business Academy, Bangalore.

Her character and conduct was good during the study.

Place: Bangalore Date: Prof. GURUTEJ

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ACKNOWLEDGEMENT

The satisfaction and euphoria that accompany the successful completion of any task would be but incomplete without the mention of the people who made it possible, whose constant guidance and encouragement crowned our efforts with success. I consider it my privilege to express gratitude and thanks to the Management Excel Business Academy, Bangalore for giving me the opportunity to conduct this study. I thank our Principal Prof. Thejaswi Naviloor, for the encouragement and intellectual influence during the course of the project work. I wish to express my heartfelt gratitude to Prof. Gurutej, Head PGPM & Techno Management Studies; Prof. Shreya K Rao, Head MBA & TPD and my Project Guide for their help and able guidance for the completion of the project successfully. I am grateful to the Librarian of Excel Business Academy, for his support during my study. Last but not the least, I would also like to thank each and everyone especially all my friends for their cordiality & support during my project.

Date:

Place: Bangalore

KAKUL TRIVEDI

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TABLE OF CONTENTS CHAPTER NO. 1 1.1 Meaning of Business 1.2 Meaning of Management 1.3 Meaning of Business Administration 1.4 Difference between Business Management & Business 1.5 Difference between Business Management & Business Administration 1.6 Types of Business CONTENTS PAGE NO.

Organizational System (General Study) 2.1 Meaning of Organization 2.2 Types of Organization 2.3 Types of Ownership 2.4 Vision, mission & Goals of the company 2.5 Organization Structure & its Types 2.6 Functional Patterns People, policies, systems, problems if any. 2.7 SWOT Analysis

Organizational System GENERAL MOTORS 3.1 Introduction 3.2 Type of Organization 3.3 Type of Ownership 3.4 Vision, Mission & Goals of the company 3.5 Organizational Structure & Type 3.6 Functional Patterns 3.7 SWOT Analysis

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Summary of Findings & Conclusion 4.1 Findings 4.2 Suggestion 4.2 Conclusion

5 6

Bibliography Annexure

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LIST OF TABLES AND CHARTS TABLE 1 2 3 4 CONTENTS Meaning of business Meaning of management Meaning of business administration Difference between business management and business administration 5 Types of business 21,27, 31-36,38 6 7 8 Organizational system (General study) Types of organization Types of ownership 40,42 43-44 45,46,48, 50-52 9 10 11 12 13 14 Vision, mission & goals of the company Swot analysis Organizational system (gm) Types of organization Achievement Structure of GM 53-56 71-75 76-77 79-80 85-88 93,95,95,96,98, 100-102-104 15 16 17 Functional pattern Swot of GM Annexure 116-117 120-123 130-133 PAGE NO. 9 12 14 16-18

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EXECUTIVE SUMMARY:----

GM is currently facing the most challenging time periods in its entire history. Nevertheless, there are a few potential avenues of Among the most promising of these is the Chinese automobile market. of action which GM could follow

GMs future operations in China can be summarized by the following three premises:

1. The Chinese car market will continue to grow and remain profitable, eventually overtaking the US as the largest car market.

2. GM is very well suited to lead the Chinese premium car market as well as to efficiently compete in the market for trucks.

3. GM will maintain long term leadership by investing in the four Ps: product, price Processes, and Partnerships. This will ultimately improve GMs brand, image and reputation. .

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MEANING OF BUSINESS:

The term business literally means the state of being busy. All human activities in the broader sense thus may be termed as business activities. In a technical sense however, the term business has a different meaning. The human activities may be classified into (i) Economic activities and (ii) Non-economic activities. The former are concerned

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with production, distribution, consumption, etc. All activities which are aimed at earning of income and generation of wealth are termed as economic occupations. The employees performing their jobs in the employing organization, the doctors and pleaders giving their specialist services to their patients and clients respectively, are all economic occupations but in technical parlance these cannot be termed as business activities. Business is an economic activity of distinct nature. The non-economic activities do not contribute to the process of income and wealth generation, but are undertaken out of love, affection, social, obligation, religion, etc. According to F.C. Hooper Business means the whole complex field of commerce and industry, the basic industries, processing and manufacturing industries and the network of ancillary services, distribution, banking, insurance, transport and so on, which serve and interpenetrate the world of business as a whole. According to Prof. Owen defines a business as an enterprise engaged in the production and distribution of goods for sale in the market, or rendering of services for a price. Business thus refers to the organized production and exchange of goods and services undertaken with the object of earning profit. The production and distribution activities performed by business concerns aim at satisfying the consumers needs and wants which are numerous, unsuitable and recurrent. The business embraces industry, trade and other activities like banking, transport, insurance, warehousing, etc. Business refers to all those activities which lead to the creating of utilities and value addition in the form of goods and services for satisfaction of human wants in return for a price. It facilitates smooth for satisfaction of human wants in return for a price. It facilitates smooth exchange by removing all bottlenecks or obstacles. The obstacles are in the form of person, place, time, risk, finance, publicity, etc. All those individuals and institutions which are continuously engaged in the recurrent acts of buying, selling, procuring, manufacturing, processing, assembling and distribution of goods and services to the consumers or the users with the object of earning profit are said to be engaged in business. It is a wealth generating activity

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Characteristics

1. Distinct Ownership : The term ownership refers to the right of an individual or a group of individuals to acquire legal title to assets or properties for the purpose of running the business. A business firm may be owned by one individual or a group of individuals jointly.

2. Lawful Business : Every business enterprise must undertake such business which is lawful, that is, the business must not involve activities which are illegal. 3. Separate Status and Management : Every business undertaking is an independent entity. It has its own assets and liabilities. It has its own way of functioning. The profits earned or losses incurred by one firm cannot be accounted for by any other firm.

4. Dealing in goods and services : Every business undertaking is engaged in the production and/or distribution of goods or services in exchange of money.

5. Continuity of business operations : All business enterprise engage in operation on a continuous basis. Any unit having just one single operation or transaction is not a business unit. 6. Risk involvement : Business undertakings are always exposed to risk and uncertainty. Business is influenced by future conditions which are unpredictable and uncertain. This makes business decisions risky, thereby increasing the chances of loss arising out of business.

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MEANING OF MANAGEMENT:

Management is the process of planning, organizing, leading, and controlling the efforts of organization members and of using all other organizational resources to achieve stated organizational goals. Management focuses on the entire organization from both a short and a long-term perspective. Management aims to increase the effectiveness of organizations. It's about

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Management in simple terms means the act of getting people together to accomplish desired goals. Management comprises planning, organizing, resourcing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and ... Management is the art and science of getting things done through others, generallyby organizing and directing their activities on the job.
y

In the words of George R Terry Management is a distinct process consisting of planning, organising, actuating and controlling performed to determine and accomplish the objectives by the use of people and resources.

According to James L Lundy Management is principally the task of planning, coordinating, motivating and controlling the efforts of others towards a specific objective.

In the words of Henry Fayol To manage is to forecast and to plan, to organise, to command, to co-ordinate and to control.

According to Peter F Drucker Management is a multi-purpose organ that manages a business and manages managers and manages worker and work.

In the words of Koontz and ODonnel Management is defined as the creation and maintenance of an internal environment in an enterprise where individuals working together in groups can perform efficiently and effectively towards the attainment of group goals.

In the words of S. George Management consists of getting things done through others. Manager is one who accomplishes the objectives by directing the efforts of others.

According to John F M Management may be defined as the art of securing maximum results with a minimum of effort so as to secure maximum results with a minimum of effort so as to secure maximum prosperity and happiness for both employer and employee and give the public the best possible service.

In the words of E.F.L. Brech Management is a social process entailing responsibility for the effective and economical planning and regulation of the operations of an enterprise, in fulfilment of a given purpose or task, such

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responsibility involving: (a) judgement and decision in determining plans and in using data to control performance, and progress against plans; and (b) the guidance, integration, motivation and supervision of the personnel composing the enterprise and carrying out its operations. MEANING OF BUSINESS ADMINISTRATION:

The word administration is derived from the Middle English word administracioun, which is in turn derived from the French administration, itself derived from the Latin administratioa compounding of ad ("to") and ministratio ("give service"). Administration is a broad concept open to many interpretations. In business, administration typically refers to the performance or management of business operations, involving the making or implementing of major decisions. Administration can be defined as the universal process of organizing people and resources efficiently so as to direct activities toward common goals and objectives

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In business, administration consists of the performance or management of business operations, involving the making or implementing of major decisions. Administration can be defined as the universal process of organizing people and resources efficiently so as to direct activities toward common goals and objectives. Modern business management theory identifies six key functions of an administrator in an organization: Planning, organizing, staffing, directing, controlling, and budgeting. Skillful administration is essential to the success of any business or organization and requires a wide range of knowledge and skills. In business administration consists of the performance or management of business operations and thus the making or implementing of major decisions. Administration can be defined as the universal process of organizing people and resources efficiently so as to direct activities toward common goals and objectives. The word is derived from the middle English word admin is traction, which is in turn derived from the French admin is traction , itself derived from the Latin administration a compounding of ad ("to") and ministration ("give service"). Administrator can serve as the title of the general manager or company secret any who reports to a corporate board of directors. This title is archaic, but, in many enterprises, this function, together with its associated Finance, personnel and management information systems services, is what is intended when the term "the administration" is used. In some organizational analyses management is viewed as a subset of administration, specifically associated with the technical and mundane elements within an organization's operation. It stands distinct from executive or strategic work. In other organizational analyses, administration can refer to the bureaucratic operational performance of mundane office tasks, usually internally oriented and reactive rather than proactive.

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DIFFERENCE BETWEEN BUSINESS MANAGEMENT AND BUSINESS ADMINISTRATION:

business management

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Business administration

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Business Management y It puts into action the policies and plans laid down by the

Business Administration y It is concerned about the

determination of objectives and major policies of an organization.

administration.

It is an executive function.

It is a determinative function

It takes decisions within the framework administration. set by the

It takes major decisions of an enterprise as a whole

y y It is a middle level activity.

It is a top-level activity.

y y It consists of owners who invest capital in and receive profits from an enterprise.

It is a group of managerial personnel who use their

specialized knowledge to fulfill the objectives of an enterprise.

y y It is used in business enterprises.

It is popular with government, military, educational, and

religious organizations.

Its decisions are influenced by

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public policies, factors. y Its decisions are influenced by the values, opinions, and beliefs of the managers. y

opinion, social,

government and religious

Planning and organizing functions are involved in it.

y y Motivating and controlling

It needs administrative rather than technical abilities.

functions are involved in it. y It requires technical activities

There can be a lot of confusion between the administration and management of businesses. In the practical world of business, they are very similar, and generally have identical functions and responsibilities. Many may think that administration is more about paper-pushing and clerical work, while management is more about authority and decision-making. However, unless clearly defined by a particular company, business management and administration are generally the same. Professionals in management are vital to any business or organization. These managers are relied upon to establish and implement policies, as well as strategies. Additionally, they are expected to help people involved in the organization, work for a common goal, in the most effective way possible. These professionals have studied management degree programs, which have helped them become effective managers. Management degree programs prepare individuals for planning, managing, organizing, and running the essential procedures and tasks of organized bodies, such as companies or firms. Courses also include many aspects that are vital to any business, such as communications, production, logistics and purchasing, the quantitative methods of accounting, administrative practices, decision-making,

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marketing, information systems, and human resources management, and so forth. They also handle training of the workforce. The degree primes any person for entry-level management positions, like supervisor, assistant manager, group leader, project manager, or office manager. The areas or fields of work is broad, as one can work in advertising, finance, benefits administration, insurance, human resources, wholesaling, retailing, communication, and transportation.

Summary: 1. Business Administration degrees are normally broader in scope, and management can be considered as part of its extensive scale. 2. Business administration degrees offer a balanced mix of clerical, operations, and management skills, while Management degrees, although they have aspects of clerical and operation subjects, are more about the management of human resources and personnel operations. 3. In reality, the lines are blurred when it comes to potential jobs and responsibilities, as both degrees can be for the same positions.

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TYPES OF BUSINESS:

Various types of business are:---1) Service businesses:--

Service businesses are enterprises that are established and maintained for the purpose of providing services (rather than or in addition to products) to private and/or commercial customers. The American Marketing Association defined services as

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"activities, benefits, or satisfactions which are offered for sale or are provided in connection with the sale of goods." The overall service industry is regarded as an already robust one that should enjoy considerable healthy growth rates in the future as the United States and other nations continue to move from manufacturing-based economies to technologically advanced service economies. "The service sector is a most attractive arena for the aspiring entrepreneur," confirmed Irving Burstiner in Start & Run Your Own Profitable Service Business. "Many service enterprises can be launched with far less money than the amount of capital typically needed to open a manufacturing, wholesale, or retail business. Many new service operators are able to begin at home, thus avoiding the expense of renting, buying, or constructing business premises. Moreover, end-of-year earnings in the service sector compare favorably with the profit margins enjoyed by most other types of enterprise." In addition, service businesses enjoy several other advantages over their brethren in other business areas. For one thing, they tend to be local, and they often do not have to contend with the national or international corporate giants that roam across the manufacturing, retail, and wholesale industries. Moreover, they generally do not have to make the same levels of investment in inventory, raw materials, finished goods, operations, or production management as do firms engaged in manufacturing, wholesaling, or retailing. Of course, initial investment requirements can vary significantly from sector to sector. While some service businesses, like book-keeping, house painting, child care, lawn care, housekeeping, and tutoring, can all be launched with a modest investment by individuals with special skills or knowledge in those areas, other service businesses require a far greater investment of money. Attorneys, doctors, and other professionals who make their living by providing their services to clients make heavy up-front expenditures (tuition), while entrepreneurs interested in launching service businesses that require extensive investments in facilities and/or equipment (hotels, laundromats, car rental agencies, nursing care facilities, medical offices, etc.) have to make big upfront expenditures of their own, albeit in different form. Factors in Service Industry Growth

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Researchers point to a number of factors that have accounted for the surge in service business startups over the last few decades. Many of these factors reflect fundamental changes in societal structure and character. W. F. Schoell and J. T. Ivy, authors of Marketing: Contemporary Concepts and Practices, cited the following as major reasons for service industry expansion in North America: 1. Increased affluence As consumers have raised their standard of living, they have increasingly chosen to purchase services such as lawn maintenance and carpet cleaning that they previously took care of themselves. 2. Increased leisure time Some segments of the population have been able to garner larger chunks of free time; this trend, coupled with increased wealth, has spurred a higher demand for certain service businesses such as travel agencies and resorts, adult education courses, guide services, golf courses, health clubs, etc. 3. Changing work force demographics Over the past few decades, increasing numbers of women have entered the work force. This has spurred greater demand for services in such realms as child care, housekeeping, dry cleaning, etc. 4. Greater life expectancy Another development that has had a particular impact on certain service sectors, particularly in the health care industries. 5. Increased complexity of products/technological advancementHigh-tech

products have created a corresponding increase in demand for specialists who can fix and maintain those products (computers, cars, electronic equipment, etc.). 6. Increased complexity of lifeMany service sectors have enjoyed tremendous growth because of their orientation toward helping individuals and businesses stay on top of the many facets of today's fast-paced society. Tax preparers, psychiatrists and counselors, and legal advisors are good examples. 7. Increased environmental awarenessGeneral trends toward increased ecological sensitivity and enlightened natural resource management practices have spurred growth in environmental service sectors (waste management, recycling,

environmental advocacy). 8. Increased number of available productsTechnological advances have spurred development of service industries in such areas as programming.

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Types of Service Industries Following is a representative listing of service businesses in a range of commercial sectors that could conceivably be launched by an enterprising entrepreneur:
y

Professional services (physicians, pharmacists, dentists, attorneys, architects, civil engineers)

Business services (advertising, financial planning, mailing services, computer and data processing, consulting, training, recruiting)

y y

Counseling services (marriage, weight loss, career planning, pastoral, psychiatric) Transportation services (trucking, busing, taxicab service, limousine service, car rental)

Personal services (pet grooming, health clubs, catering, beauticians, barbers, hairdressers, tailors and seamstresses, photography studios, realtors, funeral parlors, wedding planning)

y y y

Restaurants and lodging (diners, family restaurants, taverns, hotels, cottages) Social services (individual and family services, child day care, residential care) Maintenance services (landscaping, plumbing and electrical, appliance, equipment, automobile, bicycle) In addition, many service-oriented businesses are, by their very nature, slanted toward meeting the needs of one of two markets: individual consumers or other businesses/organizations. Of course, some service establishments, like carpet cleaning companies, can market their services to both client categories. But the majority of service businesses place their emphasis on meeting the needs of one market segment or the other. For example, a pet grooming establishment will not waste its advertising dollars trying to reach other businesses; its primary clients are going to be individual consumers simply because of the nature of the services they offer. Conversely, the primary target of a company that provides security personnel is going to be commercial establishments. Entrepreneurs that hope to market their services primarily to organizations rather than individuals should note that, on the whole, such businesses require greater capital investment at the outset.

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2.

Transportation business:--

Transportation business concerns the movement of products from a sourcesuch as a plant, factory, or work-shopto a destinationsuch as a warehouse, customer, or retail store. Transportation may take place via air, water, rail, road, pipeline, or cable routes, using planes, boats, trains, trucks, and telecommunications equipment as the means of transportation. The goal for any business owner is to minimize transportation costs while also meeting demand for products. Transportation costs generally depend upon the distance between the source and the destination, the means of transportation chosen, and the size and quantity of the product to be shipped. In many cases, there are several sources and many destinations for the same product, which adds a significant level of complexity to the problem of minimizing transportation costs. Indeed, the United States boasts the world's largest and most complex transportation system, with four million miles worth of roads, a railroad network that could circle the earth almost seven times if laid out in a straight line, and enough oil and gas lines to circle the globe 56 times.

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Basic Means of Transportation There are five basic means of transporting products utilized by manufacturers and distributors: air, motor carrier, train, marine, or pipeline. Many distribution networks consist of a combination of these means of transportation. For example, oil may be pumped through a pipeline to a waiting ship for transport to a refinery, and from there transferred to trucks that transport gasoline to retailers or heating oil to consumers. All of these transportation choices contain advantages and drawbacks. Air transport:- Air transportation offers the advantage of speed and can be used for long-distance transport. However, air is also the most expensive means of transportation, so it is generally used only for smaller items of relatively high value such as electronic equipmentand items for which the speed of arrival is important such as perishable goods. Another disadvantage associated with air transportation is its lack of accessibility; since a plane cannot ordinarily be pulled up to a loading dock, it is necessary to bring products to and from the airport by truck. According to Transportation and Distribution, air cargo remains a comparatively small segment of total freight transportation volume when measured by tonnage (12.5 billion domestic ton-miles of freight annually). But L. Clinton Hoch noted in the magazine that "access to air transportation is expected to become increasingly important since a growing number of customers (such as hospitals and electronic manufacturers) depend upon 'just in time' delivery systems as well as the increasing number of high-tech industries (such as computer manufacturers) adopting the 'buildto-order' strategy." These trends, coupled with increased pressure on consumer goods manufacturers to deliver products quickly to 1) meet customer expectations and 2) reduce inventory and other supply chain costs, are expected to "fuel the demand for expedited services," wrote Hoch. "Accordingly, competition is heating up among the major air cargo and express carriers who are building specialized hubs to handle larger aircraft and major sorting facilities."

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Railways. The rail transportation network in the United States included about 120,000 miles of major rail lines in the late 1990s, on which carriers transported an estimated 1.3 million tons of freight annually. Trains are ideally suited for shipping bulk products, and can be adapted to meet specific product needs through the use of specialized carsi.e., tankers for liquids, refrigerated cars for perishables, and cars fitted with ramps for automobiles. Rail transportation is typically used for long-distance shipping. Less expensive than air transportation, it offers about the same delivery speed as trucks over long distances and exceeds transport speeds via marine waterways. In fact, deregulation and the introduction of freight cars with larger carrying capacities has enabled rail carriers to make inroads in several areas previously dominated by motor carriers. But access to the network remains a problem for many businesses. Motor carriers:- Accessible and ideally suited for transporting goods over short distances, trucks are the dominant means of shipping in the United States. In fact, motor carriers account for approximately $120 billion in annual revenue, much of it due to local shipments (shipments to and from business enterprises in the same community or local region). This industry sector underwent tremendous change in the 1990s with the introduction of deregulation measures that removed most state and federal regulations in the areas of pricing and operating authority. "With few exceptions, motor carriers are now free to operate wherever they wish and to charge any rates that are agreeable to the shipper and the carrier," wrote Hoch, although he noted that trucks are still subject to federal laws on vehicle specifications and the parameters of the sanctioned truck routes of the Surface Transportation Assistance Act of 1982. Water transport:- Water transportation is the least expensive and slowest mode of freight transport. It is generally used to transport heavy products over long distances when speed is not an issue. Although accessibility is a problem with shipsbecause they are necessarily limited to coastal area or major inland waterwayspiggybacking is possible using either trucks or rail cars. However, industry observers note that port terminal accessibility to land-based modes of transportations is lacking in many

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regions. The main advantage of water transportation is that it can move products all over the world.

2. Agribusiness:---

Agriculture business is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales. The term has two distinctly different connotations depending on context. Within the agriculture industry, agribusiness is widely used simply as a convenient portmanteau of agriculture and business, referring to the range of activities and disciplines encompassed by modern food production. There are academic degrees in and departments of agribusiness, agribusiness trade associations, agribusiness publications, and so forth, worldwide. Here, the term is only descriptive, and is synonymous in the broadest sense with food industry. Among critics of large-scale, industrialized, vertically integrated food production, the term agribusiness is used negatively, synonymous with corporate farming. As such, it is often contrasted with smaller family-owned farms. Negative connotations are also derived from the negative associations of "business" and "corporations" by critics of capitalism or corporate excess. As concern over global warming intensifies, biofuels derived from food crops quickly emerged as a practical answer to the energy crisis. Adding corn ethanol to gasoline or using palm oil for biodiesel makes the fuel burn more cleanly, stretches oil supplies, and perhaps most attractive to some politicians, provides a nice boost to big agribusiness. In Europe and in the US, increasing biofuels

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was mandated by law. Rising fuel costs are increasingly adding financial burdens on the day-to-day running of agricultural companies.

Mining business:---

Mining is the extraction of valuable minerals or other geological materials from the earth, usually from an ore body, vein or (coal) seam. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock salt and potash. Any material that cannot be grown through agricultural processes, or created artificially in a laboratory or factory, is usually mined. Mining in a wider sense comprises extraction of any non-renewable resource (e.g., petroleum, natural gas, or even water). Mining of stone and metal has been done since pre-historic times. Modern mining processes involve prospecting for ore bodies, analysis of the profit potential of a proposed mine, extraction of the desired materials and finally reclamation of the land to prepare it for other uses once the mine is closed.

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4.Financial business:--

Raising and managing of funds by business organizations. Such activities are usually the concern of senior managers, who must use financial forecasting to develop a longterm plan for the firm. Shorter-term budgets are then devised to meet the plan's goals. When a company plans to expand, it may rely on cash reserves, expected increases in sales, or bank loans and trade credits extended by suppliers. Managers may also decide to raise long-term capital in the form of either debt (bonds) or equity (stock). The value of the company's stock is a constant concern, and managers must decide whether to reinvest profits or to pay dividends. Other duties of financial managers include managing accounts receivable and fixing the optimum level of inventories. When deciding how to deploy corporate assets to increase growth, financial managers must also consider the benefits of mergers and acquisitions, analyzing economies of scale and the ability of businesses to complement each other.

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5.Manufacturing business:---

This sector generally takes the output of the primary sector and manufactures finished goods or where they are suitable for use by other businesses, for export, or sale to domestic consumers. This sector is often divided into light industry and heavy industry. Many of these industries consume large quantities of energy and require factories and machinery to convert the raw materials into goods and products. They also produce waste materials and waste heat that may pose environmental problems or cause pollution.

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Some economists contrast wealth-producing sectors in an economy such as manufacturing with the service sector which tends to be wealth-consuming.[1] Examples of service may include retail, insurance, and government. These economists contend that an economy begins to decline as its wealth-producing sector shrinks.[2] Manufacturing is an important activity to promote economic growth and development. Nations that export manufactured products tend to generate higher marginal GDP growth which supports higher incomes and marginal tax revenue needed to fund the quality of life initiatives such as health care and infrastructure in the economy. The field is an important source for engineering job opportunities. Among developed countries, it is an important 6) Real estate business:---

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Real estate is a legal term (in some jurisdictions, such as the United Kingdom, Canada, Australia, USA and The Bahamas) that encompasses land along with improvements to the land, such as buildings, fences, wells and other site improvements that are fixed in locationimmovable. Real estate law is the body of regulations and legal codes which pertain to such matters under a particular jurisdiction and include things such as commercial and residential real property transactions. Real estate is often considered synonymous with real property (sometimes called realty), in contrast with personal property (sometimes called chattel or personality under chattel law or personal property law). However, in some situations the term "real estate" refers to the land and fixtures together, as distinguished from "real property", referring to ownership of land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof. Real property is typically considered to be Immovable property The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property With the development of private property ownership, real estate has become a major area of business, commonly referred to as commercial real estate. Purchasing real estate requires a significant investment, and each parcel of land has unique characteristics, so the real estate industry has evolved into several distinct fields. Specialists are often called on to valuate real estate and facilitate transactions. Some kinds of real estate businesses include:
y y

Appraisal: Professional valuation services Brokerages: A mediator who charges a fee to facilitate a real estate transaction between the two parties.

y y y y y

Development: Improving land for use by adding or replacing buildings Net leasing Property management: Managing a property for its owner(s) Real estate marketing: Managing the sales side of the property business Real estate investing: Managing the investment of real estate

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y y

Relocation services: Relocating people or business to a different country Corporate Real Estate: Managing the real estate held by a corporation to support its core businessunlike managing the real estate held by an investor to generate income

7.

Retail business:---

Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The term "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power.

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ORGANIZATION SYSTEM GENERAL STUDY:ORGANIZATION MEANING::--

An organization is a social arrangement which pursues collective goals, controls its own performance, and has a boundary separating it from its environment. The word itself is derived from the Greek word organ on, itself derived from the better-known word ergo. In the social sciences, organizations are the object of analysis for a number of disciplines, such as sociology, economics, political science, psychology,

management, and organizational communication. In more specific contexts, particularly for sociologists, the term "institution" may be preferred. The broader analysis of organizations is commonly referred to as organizational studies, organizational behavior or organization analysis. A number of different theories and perspectives exist, some of which are compatible, Basically, an organization in its simplest form is a person or group of people intentionally organized to accomplish

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an overall, common goal or set of goals. Business organizations can range in size from one person to tens of thousands. According to Steve Reid, English Department To me, organization is the arrangement of the larger units of meaning in a paper. That's one of the things that's going to be very different from one course to the next. What are the expected patterns of organization? A lab report is very different from a scientific report, is very different from a poem, is very different from a report in the newspaper. All of these have their own patterns of organization, all of which are acceptable in specific disciplines. According to Kate Kiefer, English Department Organization typically refers to the large elements of text structure. Sometimes these elements are formalized in practice, as in the typical lab report, through consistent use of headings. Sometimes elements of organization are only informally acknowledged like the thesis of an academic paper. Most writers across the university would agree, however, that organization refers to the ordering of ideas. There are several important aspects to consider about the goal of the business organization. These features are explicit or implicit. Ideally, these features are carefully considered and established, usually during the strategic planning process.

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Types of Organization:

Static Organizations

Fixed practices, fixed size. Like static equations, these organizations have no

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variables -- time doesn't change them significantly. They persist until some new organization occupies their niche.

y Dynamic Organizations

Fixed practices, variable size. Like dynamic equations, these organizations vary in size over time, even though their underlying practices don't change much. They go through a single life cycle, each growing rapidly as it occupies its niche, then declining as its competitors implement better practices that steal away its clients.

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Adaptive Organizations

Variable practices, variable size. Like complex adaptive systems, these organizations vary their practices, seeking the constant improvement that launches life cycle after life cycle, creating new products, services, and processes that hold on to clients generation after generation. They will soon motivate employees to climb adaptation curves by using ISOPs to fairly share the wealth that each innovation creates. ISOPs ensure that the innovator, the predecessors, and each shareholder in the corporation benefits. They will displace dynamic and static organizations in economic competition, so that within a generation, most people will have learned to expect continual improvement in their life experience. The fact that their ancestors once worked at the same job in the same way for an entire lifetime will seem almost as incredible as the fact that people used to stay at jobs they didn't thoroughly enjoy.

y Types of Ownership:

y Franchise Franchise is one of the newest forms of business ownership. It is very much in vogue nowadays, especially in the United States of America. In case of a franchise, the owner gets the right to market and sell the products of another business entity that has already established itself in the market.

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y Private Limited Company

Private limited companies are mainly small or medium sized business enterprises. They are normally owned by a particular family or by a small group of businessmen and the ownership rights are divided among these owners. All the business decisions are subjected to the approval of all these owners or at least the majority of these owners. y Partnership

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In a Partnership, two or more people share ownership of a single business. Like proprietorships, the law does not distinguish between the business and its owners. The partners should have a legal agreement that sets forth how decisions will be made, profits will be shared, disputes will be resolved, how future partners will be admitted to the partnership, how partners can be bought out, and what steps will be taken to dissolve the partnership when needed. Yes, it's hard to think about a breakup when the business is just getting started, but many partnerships split up at crisis times, and unless there is a defined process, there will be even greater problems. They also must decide up-front how much time and capital each will contribute etc. Advantages of a Partnership:
y

Partnerships are relatively easy to establish; however time should be invested in developing the partnership agreement.

y y

With more than one owner, the ability to raise funds may be increased. The profits from the business flow directly through to the partners' personal tax returns.

Prospective employees may be attracted to the business if given the incentive to become a partner.

The business usually will benefit from partners who have complementary skills.

Disadvantages of a Partnership:
y y y y

Partners are jointly and individually liable for the actions of the other partners. Profits must be shared with others. Since decisions are shared, disagreements can occur. Some employee benefits are not deductible from business income on tax returns

. Types of partnership that should be considered

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1.

GeneralPartnership

Partners divide responsibility for management and liability as well as the shares of profit or loss according to their internal agreement. Equal shares are assumed unless there is a written agreement that states differently.

2.

Limited

Partnership

and

Partnership

with

limited

liability

Limited means that most of the partners have limited liability (to the extent of their investment) as well as limited input regarding management decisions, which generally encourages investors for short-term projects or for investing in capital assets. This form of ownership is not often used for operating retail or service businesses. Forming a limited partnership is more complex and formal than that of a general partnership.

3. Joint

Venture

Acts like a general partnership, but is clearly for a limited period of time or a single project. If the partners in a joint venture repeat the activity, they will be recognized as an ongoing partnership and will have to file as such accumulated partnership assets upon dissolution of the y Corporations as well as distribute

entity.

A corporation chartered by the state in which it is headquartered is considered by law

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to be a unique entity,separate and apart from those who own it. A corporation can be taxed, it can be sued, and it can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to oversee the major policies and decisions. The corporation has a life of its own and does not dissolve when ownership changes .

Advantages of a Corporation:
y

Shareholders have limited liability for the corporation's debts or judgments against the corporations.

Generally, shareholders can only be held accountable for their investment in stock of the company.

y y

Corporations can raise additional funds through the sale of stock. A corporation may deduct the cost of benefits it provides to officers and employees.

Can elect S corporation status if certain requirements are met. This election enables company to be taxed similar to a partnership.

Disadvantages of a Corporation:
y

The process of incorporation requires more time and money than other forms of organization.

Corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations.

Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible from business income; thus it can be taxed twice.

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Limited Liability Company (LLC)

The LLC is a relatively new type of hybrid business structure that is now permissible in most states. It is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. Formation is more complex and formal than that of a general partnership. The owners are members, and the duration of the LLC is usually determined when the organization papers are filed. The time limit can be continued, if desired, by a vote of the members at the time of expiration. LLCs must not have more than two of the four characteristics that define corporations: Limited liability to the extent of assets, continuity of life, centralization of management, and free transferability of ownership interests.

y Public Limited Company

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The public limited companies are a type of business ownership that has very little amount of liability. These companies have a lot of shareholders. In the United Kingdom the term public limited company means any company that has share capital of more than fifty thousand pounds. y Sole prorietorship

A sole proprietorship also known as a sole trader, or simply proprietorship is a type of business entity which is owned and run by one individual and where there

is no legal distinction between the owner and the business. All profits and all losses accrue to the owner (subject to taxation specific to the business). All assets of the business are owned by the proprietor and all debts of the business are the

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proprietors'. This means that the owner has no lesser liability than if they were acting as individual instead of a business. It is a "sole" proprietorship in contrast with partnerships. A sole proprietor may do business with a trade name other than his or her legal name. Sometimes a sole proprietor is required to file a doing business as statement with a local government even if it is the same as his actual name for certain types of businesses or as a requirement to open a business banking account. y Cooperative Business Ownerships

The cooperative business ownerships work by following a cooperative business model. These companies have limited liabilities. The common goal of the members, as in the case with partnerships, is making profits. All the members have the right to play a significant role while taking business decisions.

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Vision, mission & goals of the company:

Vision:--

Members of the organization often have some image in their minds about how the organization should be working, how it should appear when things are going well. Corporate vision is a short, succinct, and inspiring statement of what the organization intends to become and to achieve at some point in the future, often stated in competitive terms. Vision refers to the category of intentions that are broad, allinclusive and forward-thinking. It is the image that a business must have of its goals before it sets out to reach them. It describes aspirations for the future, without specifying the means that will be used to achieve those desired ends.

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Warren Bennis, a noted (No. 12 spring 1999) writer on leadership, says: "To choose a direction, an executive must have developed a mental image of the possible and desirable future state of the organization. This image, which we call a vision, may be as vague as a dream or as precise as a goal or a mission statement." Mission:--

An organization operates according to an overall purpose, or mission. A mission statement is an organization's vision translated into written form. It makes concrete the leader's view of the direction and purpose of the organization. For many corporate leaders it is a vital element in any attempt to motivate employees and to give them a sense of priorities. A mission statement should be a short and concise statement of goals and priorities. In turn, goals are specific objectives that relate to specific time periods and are stated in terms of facts. The primary goal of any business is to increase stakeholder value. The most important stakeholders are shareholders who own the business, employees who work for the business, and clients or customers who purchase products and/or services from the business.

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Goals:---

The major outcome of strategic road-mapping and strategic planning, after gathering all necessary information, is the setting of goals for the organization based on its vision and mission statement. A goal is a long-range aim for a specific period. It must be specific and realistic. Long-range goals set through strategic planning are translated into activities that will ensure reaching the goal through operational planning.

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Organizational structure :

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An organizational structure is a mainly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim. Organizational structure depends on the product to be developed. Wheelwright and Clark define a continuum of organizational structures between two extremes, functional organizations and project organizations. Functional organizations are organized according to technological disciplines. Senior functional managers are responsible for allocating resources. The responsibility for the total product is not allocated to a single person. Coordination occurs through rules and procedures, detailed specifications, shared traditions among engineers and meetings (ad hoc and structured). Products that need a high level of specialized knowledge require a functionally organized structure. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual. Individuals in an organizational structure are normally hired under time-limited work contracts or work orders, or under permanent employment contracts or program orders. The set organizational structure may not coincide with facts, evolving in operational action. Such divergence decreases performance, when growing. E.g. a wrong organizational structure may hamper cooperation and thus hinder the completion of orders in due time and within limits of resources and budgets. Organizational structures shall be adaptive to process requirements, aiming to optimize the ratio of effort and input to output. Main types of organizational structures are:-

(1)

Formal organisational Structure:--Organization charts are useful for showing the

Formal organisational Structure

formal organizational structure and who is responsible for certain tasks. In reality, though, the organization chart cannot begin to capture the interpersonal that make up the informal organizational structure.

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(2)

Informal organisational Structure:----

Herbert A. Simon has described this as the in interpersonal relationships in the organization that affect decisions within it but either are omitted from the formal scheme or are not consistent with it. For example, during a busy period, one

employee may turn to another for help rather than going through a manager. Or an employee in sales may establish a working relationship with an employee in production, who can provide information about product availability faster than the formal reporting system. And anyone who has worked in an organization knows the importance of secretaries and executive assistants, which never shows on an organization chart. One of the first scholars to recognize the importance of informal structures was Chester Barnard. 3. Functional structures Early organizational design divided enterprises into relatively simple parts, splitting them into defined activities such as production, marketing or personnel. functional organizations have the advantage of being simple to understand with clear lines of command, specified tasks and responsibilities. Staff can specialize in a particular business area such as production or marketing and follow well-defined career paths. This is equally true of human resource specialists who can develop expertise in specific areas such as employee relations or reward management. 4.Divisional organizations Split into self-contained units, able to react to environmental changes as quickly as small companies, they are also described as multidivisional or 'M-form' organizations. (...) Divisions encourage team spirit and identification with a product or region. Managers can develop broad skills as they have control of all basic functions. (...) Each division is likely to have a devolved human resource function. But there is a risk of duplicating activities between head office and divisional human resource departments and of conflict between staff in successful and unsuccessful divisions.

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5.Federations One variant of the divisional form which has a particular relevance because of its human resource implications is the 'federation', a loosely connected arrangement of businesses with a single holding company or separate firms in alliance. (...) This form of organization has attracted criticism from stock market analysts who find difficulty in comprehending its subtle informality 6. Matrix structure The matrix structure groups employees by both function and product. This structure can combine the best of both separate structures. A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of the strengths, as well as make up for the weaknesses, of functional and decentralized forms. An example would be a company that produces two products, "product a" and "product b". Using the matrix structure, this company would organize functions within the company as follows: "product a" sales department, "product a" customer service department, "product a" accounting, "product b" sales department, "product b" customer service department, "product b" accounting department. Matrix structure is amongst the purest of organizational structures, a simple lattice emulating order and regularity demonstrated in nature.
y

Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross- functional aspects of the project. The functional managers maintain control over their resources and project areas.

Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared equally between the project manager and the functional managers. It brings the best aspects of functional and projectized organizations. However, this is the most difficult system to maintain as the sharing power is delicate proposition. Strong/Project Matrix: A project manager is primarily responsible for the project. Functional managers provide technical expertise and assign resources as needed.

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7.Pre-bureaucratic structures Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This structure is most common in smaller organizations and is best used to solve simple tasks. The structure is totally centralized. The strategic leader makes all key decisions and most communication is done by one on one conversations. It is particularly useful for new (entrepreneurial) business as it enables the founder to control growth and development. They are usually based on traditional domination or charismatic domination in the sense of Max Weber's tripartite classification of authority. 8.Bureaucratic structures Bureaucratic structures have a certain degree of standardization. They are better suited for more complex or larger scale organizations. They usually adopt a tall structure. Then tension between bureaucratic structures and non-bureaucratic is echoed in Burns and Stalker[1] distinction between mechanistic and organic structures. It is not the entire thing about bureaucratic structure. It is very much complex and useful for hierarchical structures organization, mostly in tall organizations. 9. Post-bureaucratic The term of post bureaucratic is used in two senses in the organizational literature: one generic and one much more specific
[2]

. In the generic sense the term post

bureaucratic is often used to describe a range of ideas developed since the 1980s that specifically contrast themselves with Weber's ideal type bureaucracy. This may include total quality management, culture management and matrix management, amongst others. None of these however has left behind the core tenets of Bureaucracy. Hierarchies still exist, authority is still Weber's rational, legal type, and the organization is still rule bound. Heckscher, arguing along these lines, describes them as cleaned up bureaucracies
[3]

, rather than a fundamental shift away from

bureaucracy. Gideon Kunda, in his classic study of culture management at 'Tech'

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argued that 'the essence of bureaucratic control - the formalization, codification and enforcement of rules and regulations - does not change in principle.....it shifts focus from organizational structure to the organization's culture'.

Organizational Structure Corporate Theory The first step is determining what type of organizational structure you would like to design and implement. Some examples of structures would be, functional and hierarchical. Next, you should develop a strategy to start organizing your business, company, or group. How do you want it to run? From the top down, or by a matrix of different people, such as a management department is a big decision. Once you have a few options picked out, you can decide which option will be optimal to produce the results you desire. On this site, you can find assistance on the topics above. Available to you are designs, models, alternative ideas, and strategy examples for setting up the structure of your business. Also available are different theories and opinions surrounding some strategies discussed. As for smaller organizations, we can offer some public resources to help you in your specific area. Additionally, simple versions of structures can be found. If you choose the options that best fit your organization then you're more likely to succeed in your market. By having the right people in the right place, it can lead to better networking opportunities, higher sales, increased interest in your organization, and overall success.

y Functional Patterns people, policies, systems and problems if any : People:- People is the most important asset for any organization . the importance of people for any organization can be determined by following:-y Specialization - Organizational structure is a network of relationships in which the work is divided into units and departments. This division of work is helping in bringing specialization in various activities of concern.

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Well defined jobs - Organizational structure helps in putting right men on right job which can be done by selecting people for various departments according to their qualifications, skill and experience. This is helping in defining the jobs properly which clarifies the role of every person. y Clarifies authority - Organizational structure helps in clarifying the role positions to every manager (status quo). This can be done by clarifying the powers to every manager and the way he has to exercise those powers should be clarified so that misuse of powers do not take place. Well defined jobs and responsibilities attached helps in bringing efficiency into managers working. This helps in increasing productivity. y Co-ordination - Organization is a means of creating co- ordination among different departments of the enterprise. It creates clear cut relationships among positions and ensure mutual co- operation among individuals. Harmony of work is brought by higher level managers exercising their authority over interconnected activities of lower level manager. Authority responsibility relationships can be fruitful only when there is a formal relationship between the two. For smooth running of an organization, the coordination between authority- responsibility is very important. There should be coordination between different relationships. Clarity should be made for having an ultimate responsibility attached to every authority. There is a saying, Authority without responsibility leads to ineffective behaviour and responsibility without authority makes person ineffective. Therefore, co- ordination of authorityresponsibility is very important. Effective administration The organization structure is helpful in defining the jobs positions. The roles to be performed by different managers are clarified. Specialization is achieved through division of work. This all leads to efficient and effective administration. Growth and diversification - A companys growth is totally dependent on how efficiently and smoothly a concern works. Efficiency can be brought about by clarifying the role positions to the managers, co-ordination between authority and responsibility and concentrating on specialization. In addition to this, a company can

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diversify if its potential grow. This is possible only when the organization structure is well- defined. This is possible through a set of formal structure. Sense of security - Organizational structure clarifies the job positions. The roles assigned to every manager is clear. Co- ordination is possible. Therefore, clarity of powers helps automatically in increasing mental satisfaction and thereby a sense of security in a concern. This is very important for job- satisfaction. y Scope for new changes - Where the roles and activities to be performed are clear and every person gets independence in his working, this provides enough space to a manager to develop his talents and flourish his knowledge. A manager gets ready for taking independent decisions which can be a road or path to adoption of new techniques of production. This scope for bringing new changes into the running of an enterprise is possible only through a set of organizational structure. Policy:--A policy is typically described as a principle or rule to guide decisions and achieve rational outcome(s). The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol. Whereas a policy will contain the 'what' and the 'why', procedures or protocols contain the 'what', the 'how', the 'where', and the 'when'. Policies are generally adopted by the Board of or senior governance body within an organization where as procedures or protocols would be developed and adopted by senior executive officers. The term may apply to government, private sector organizations and groups, and individuals. Presidential executive orders, corporate privacy policies, and

parliamentary rules of order are all examples of policy. Policy differs from rules or law. While law can compel or prohibit behaviors (e.g. a law requiring the payment of taxes on income), policy merely guides actions toward those that are most likely to achieve a desired outcome. Policy or policy study may also refer to the process of making important organizational decisions, including the identification of different alternatives such as programs or spending priorities, and choosing among them on the basis of the impact

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they will have. Policies can be understood as political, management, financial, and administrative mechanisms arranged to reach explicit goals. Policy addresses the intent of the organization, whether government, business, professional, or voluntary. Policy is intended to affect the 'real' world, by guiding the decisions that are made. Whether they are formally written or not, most organizations have identified policies Policies may be classified in many different ways. The following is a sample of several different types of policies broken down by their effect on members of the organization. 1.Distributive policies Distributive policies extend goods and services to members of an organization, as well as distributing the costs of the goods/services amongst the members of the organization. Examples include government policies that impact spending for welfare, public education, highways, and public safety, or a professional organization's benefits plan. 2.Regulatory policies Regulatory policies, or mandates, limit the discretion of individuals and agencies, or otherwise compel certain types of behavior. These policies are generally thought to be best applied when good behavior can be easily defined and bad behavior can be easily regulated and punished through fines or sanctions. An example of a fairly successful public regulatory policy is that of a speed limit. 3.Constituent policies Constituent policies create executive power entities, or deal with laws. Constituent policies also deal with Fiscal Policy in some circumstances.

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4.Miscellaneous policies Policies are dynamic; they are not just static lists of goals or laws. Policy blueprints have to be implemented, often with unexpected results. Social policies are what happens 'on the ground' when they are implemented, as well as what happens at the decision making or legislative stage. When the term policy is used, it may also refer to:
y

Official government policy (legislation or guidelines that govern how laws should be put into operation)

y y

Broad ideas and goals in political manifestos and pamphlets A company or organization's policy on a particular topic. For example, the equal opportunity policy of a company shows that the company aims to treat all its staff equally. The actions the organization actually takes may often vary significantly from stated policy. This difference is sometimes caused by political compromise over policy, while in other situations it is caused by lack of policy implementation and enforcement. Implementing policy may have unexpected results, stemming from a policy whose reach extends further than the problem it was originally crafted to address. Additionally, unpredictable results may arise from selective or idiosyncratic enforcement of policy. Types of policy analysis include:

y y y y y y

Causal (resp. non-causal) Deterministic (resp. stochastic, randomized and sometimes non-deterministic) Index Memory less (e.g. non-stationary) Opportunistic (resp. non-opportunistic) Stationary (resp. non-stationary)

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System:--System (from Latin syst ma, in turn from Greek syst ma, "whole

compounded of several parts or members, system", literary "composition"[1]) is a set of interacting or interdependent entities forming an integrated whole. Very simply, a system is a collection of parts (or subsystems) integrated to accomplish an overall goal (a system of people is an organization). Systems have input, processes, outputs and outcomes, with ongoing feedback among these various parts. If one part of the system is removed, the nature of the system is changed. Systems range from very simple to very complex. There are numerous types of systems. For example, there are biological systems (the heart, etc.), mechanical systems (thermostat, etc.), human/mechanical systems (riding a bicycle, etc.), ecological systems (predator/prey, etc.), and social systems (groups, supply and demand, friendship, etc.). Complex systems, such as social systems, are comprised of numerous subsystems, as well. These subsystems are arranged in hierarchies, and integrated to accomplish the overall goal of the overall system. Each subsystem has its own boundaries of sorts, and includes various inputs, processes, outputs and outcomes geared to accomplish an overall goal for the subsystem. Very simply, a system is a collection of parts (or subsystems) integrated to accomplish an overall goal (a system of people is an organization). Systems have input, processes, outputs and outcomes, with ongoing feedback among these various parts. If one part of the system is removed, the nature of the system is changed. Systems range from very simple to very complex. There are numerous types of systems. For example, there are biological systems (the heart, etc.), mechanical systems (thermostat, etc.), human/mechanical systems (riding a bicycle, etc.),

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ecological systems (predator/prey, etc.), and social systems (groups, supply and demand, friendship, etc.). Complex systems, such as social systems, are comprised of numerous subsystems, as well. These subsystems are arranged in hierarchies, and integrated to accomplish the overall goal of the overall system. Each subsystem has its own boundaries of sorts, and includes various inputs, processes, outputs and outcomes geared to accomplish an overall goal for the subsystem. A pile of sand is not a system. If one removes a sand particle, you've still got a pile of sand. However, a functioning car is a system. Remove the carburetor and you've no longer got a working car. The concept of an 'integrated whole' can also be stated in terms of a system embodying a set of relationships which are differentiated from relationships of the set to other elements, and from relationships between an element of the set and elements not a part of the relational regime. The scientific research field which is engaged in the study of the general properties of systems include systems theory, cybernetics, dynamical systems, thermodynamics and complex systems. They investigate the abstract properties of the matter and organization, searching concepts and principles which are independent of the specific domain, substance, type, or temporal scales of existence. Most systems share common characteristics, including:
y y

Systems have structure, defined by parts and their composition; Systems have behavior, which involves inputs, processing and outputs of material, energy, information, or data;

Systems have interconnectivity: the various parts of a system have functional as well as structural relationships between each other. Systems have by themselves functions or groups of functions

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1.An open system:-- It is any distinct entity -- a cell, a person, a forest, or an orchestra organization -- that takes in resources from its environment, processes them in some way, and produces output. To survive, such a system depends on its environment, and on interactions between its component parts or subsystems. When taking an opensystems approach, we look both inward and outward. We are interested in relationships and patterns of interaction between subsystems and their environments within the organization. We also look for relationships and reciprocal influences between the organization and the environment outside its formal "boundary." 2.Closed system:-A closed system operates out of inflexible, stuck, negative rules designed to maintain an unchanging status quo. It is dictatorial, controlling, perfectionistic. In a closed system people don't talk to each other. They second-guess each other and make assumptions. They gossip, take sides and keep secrets. They are quick to blame other people and slow to take responsibility for mistakes, so there is minimal accountability. People argue without getting anywhere. Conflict of any kind is usually avoided and people will not confront a problem even when it is glaringly obvious. On those rare occasions when there is open conflict it usually doesn't get resolved to everyone's satisfaction because people get stuck in having to win while making the other person wrong and needing them to lose. As in a family, people get stuck in having the same arguments over and over and never getting anywhere. Individuals stay entrenched in their intractable positions and the most people are willing to budge, if at all, is by agreeing to disagree. While that may look reasonable on the outside it doesn't actually move things forward and it keeps problems at arms length. That's why problems can fester away for years beneath the surface, with suppressed angers and resentments never being voiced or addressed. But because a system must always be in balance, whether its functional or dysfunctional, those angers and resentments will be expressed covertly. This might take the form of undermining

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other people's positions, backstabbing, spreading gossip, not passing on information, being obstructive. Senior management are inaccessible: phone calls aren't returned, e-mails aren't answered; people are in meetings all the time. Personal needs are, for the most part, sacrificed to the needs of the system, which usually means that everyone operates with a degree of low-grade anger and frustration. Stress levels increase enormously.

y SWOT analysis:SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model. Strategic Planning, has been the subject of much research.
y

Strengths: attributes of the person or company that are helpful to achieving the objective(s). Weaknesses: attributes of the person or company that are harmful to achieving the objective(s).

y y

Opportunities: external conditions that are helpful to achieving the objective(s) Threats: external conditions which could do damage to the objective(s).

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Identification of SWOTs are essential because subsequent steps in the process of planning for SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated. The SWOT analysis is often used in academia to highlight and identify strengths, weaknesses, opportunities and threats. It is particularly helpful in identifying areas for development achievement of the selected objective may be derived from the

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SWOT analysis template Subject of SWOT analysis: (define the subject of the analysis here) weaknesses
y y y y y y y

strengths
y y y y y y y y

Advantages of proposition? Capabilities? Competitive advantages? USP's (unique selling points)? Resources, Assets, People? Experience, knowledge, data? Financial reserves, likely returns? Marketing - reach, distribution, awareness?

Disadvantages of proposition? Gaps in capabilities? Lack of competitive strength? Reputation, presence and reach? Financials? Own known vulnerabilities? Timescales, deadlines and pressures?

y y

Cashflow, start-up cash-drain? Continuity, supply chain robustness?

y y y y

Innovative aspects? Location and geographical?

Effects on core activities, distraction?

Price, value, quality? Accreditations, qualifications, certifications?

y

Reliability of data, plan predictability?

Processes, systems, IT, communications?

y y

Morale, commitment, leadership? Accreditations, etc? Processes and systems, etc? Management cover, succession?

y y

Cultural, attitudinal, behavioural?

y

Management cover, succession?

y

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opportunities
y y y y

Market developments? Competitors' vulnerabilities? Industry or lifestyle trends? Technology development and innovation? threats
y y y y y y y y y y

Political effects? Legislative effects? Environmental effects? IT developments? Competitor intentions - various? Market demand? New technologies, services, ideas? Vital contracts and partners? Sustaining internal capabilities? Obstacles faced? Insurmountable weaknesses? Loss of key staff? Sustainable financial backing? Economy - home, abroad? Seasonality, weather effects?

y y y y y y

Global influences? New markets, vertical, horizontal? Niche target markets? Geographical, export, import? New USP's? Tactics - surprise, major contracts, etc?

Business and product development?

y y y y y

y y

Information and research? Partnerships, agencies, distribution?

y y

Volumes, production, economies? Seasonal, weather, fashion influences?

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Page67

GENERAL MOTORS

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INTRODUCTION :--General Motors Corporation, a U.S.-based company, has been in business for 100 years, has produced nearly 450 million vehicles globally, and operates in virtually every country in the world. While GM has recently enjoyed rapidly growing sales and revenues outside the United States, the U.S. remains the companys largest single market country. GM is woven into the very fabric of America. It has been the backbone of U.S. manufacturing, is a significant investor in research and development, and has a long history of philanthropic support of communities across the country. The auto industry today remains a driving engine of the U.S. economy, employing 1 in 10 American workers, and is one of the largest purchasers of U.S. steel, aluminum, iron, copper, plastics, rubber, and electronic and computer chips. Indeed, GMs Keep

America Rolling sales campaign, following the September 11 attacks, is credited by many as having prevented an extended recession in 2001. It is no secret that GM, like all domestic automobile manufacturers, has increasingly struggled over the last several years due to increased competition from foreign manufacturers with lower wage, healthcare and benefit costs (in part, due to having far fewer retirees to support in the U.S., and national healthcare structures in their home countries). GM has spent $103 billion over the last 15 years alone on these legacy costs, constraining investment in more advanced manufacturing and product technologies and significantly weakening the companys balance sheet. GM has made mistakes in the past in now-untenable provisions from prior collective bargaining agreements, and insufficient investment in smaller, more fuel-efficient vehicles for the U.S. Even so, GM still supplies one in five vehicles sold in the U.S. today. In fact, 66 million GM cars and trucks are on this countrys roads today, 44 million more than Toyota. As described in Appendix A, GM has made substantial progress in narrowing the gap with foreign competition in quality, productivity and fuel efficiency. The Plan commits to further improvements in these and other areas critical to our long-term success. It is also noteworthy that in other markets, such as China, Latin America and

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Russia, and where GM does not have the burden of legacy costs, the company has recently grown rapidly and outperformed the competition. Finally, GM has never failed to meet a Congressional mandate in the important areas of fuel efficiency and vehicle emissions, and sets the industry standard for methods. Furthermore, the companys role in creating green manufacturing

green technology and high-

paying jobs of the future will increase substantially as a result of implementing the Plan. BRIEF INTRODUCTION OF GENERAL MOTORS:-

Type Industry Founded Founder(s) Headquarters

Limited liability company Automotive 1908 William C. Durant Renaissance Center Downtown Detroit, Michigan, USA

Area Edward Whitacre Daniel Akerson Products

reserved Worldwide Key people (Chairman) (CEO) Automobiles

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Owner(s) (61%)

United States Department of the Treasury

-United Auto Workers Union Voluntary Employee Beneficiary Association (17.5%) Canada Corporation 204,000 (2009)[1] Chevrolet Buick Cadillac GMC Subsidiaries AC General General General General Global Motors Motors do Vauxhall Delco Canada Brasil India Ventures Cooperation Development Investment -Bond holders of Motors Liquidation Company (9.8%) Employees Divisions

Motors Motors Hybrid

General Motors South Africa GM-AvtoVAZ GM GM GM Daewoo Holden Performance (70.1%) Ltd Division

OnStar Opel Website GM.com

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Management:--

The Renaissance Center in Detroit, GM's world headquarters. On July 23, 2009, GM announced its new Board of Directors: Dan Akerson, David Bonderman, Robert D. Krebs, Patricia F. Russo and Ed Whitacre (GM Chairman and Interim Chief Executive Officer). Board members who are not GM employees will be paid US$200,000 annually.[17] As of December 1, 2009, The General Motors Board of Directors accepted Frederick Henderson's resignation. In January 2010, chairman Whitacre was appointed permanent chief executive officer after previously serving in an interim capacity.[18] On December 4, 2009, GM announced leadership changes in a press release.
y

Edward Whitacre, Jr. - Chairman of the Board of the Directors and Chief Executive Officer

Robert A. Lutz - Vice Chairman, advisor on design and global product development [19] Chris Liddell - Vice Chairman and Chief Financial Officer [20] Thomas G. Stephens - Vice Chairman, Global Product Operations [21] Mark Reuss - President, GM North America [22]

y y y

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y y

David N. Reilly - President, GM Europe/Adam Opel GmbH [23] Timothy E. Lee - President, GM International Operations (Asia-Pacific, Latin America, Africa, and Middle East) [24] Ray Young - vice president, International Operations [25][26] Edward T. Welburn - Global Vice President of General Motors Design, current and only the sixth head designer.[27]

y y

For additional senior management see GM Senior Leadership Group Whitacre was very active in GM's advertising. He appeared in an advertisement touting the company's 60-day, money-back guarantee soon after the company exited bankruptcy and a television advertisement that boasted the repayment of $6.7 billion loan from government ahead of schedule, which caused a controversy.[28] On August 12, 2010 GM announced that Whitacre would relinquish the CEO position effective September 1, 2010 and that of Chairman of the Board at the end of the year, to be replaced in those functions by current board member Dan Akerson.[29] GM is a conglomerate. Global ranking:--GM officially ranks as the worlds second largest manufacturer as measured by OICA in 2009

Type of Organization:--On October 19, 2009, General Motors Company completed its holding company reorganization (the Reorganization). The Reorganization was conducted to implement a new holding company structure that is intended to provide greater financial and organizational flexibility. In connection with the Reorganization, all of the outstanding shares of common stock and Series A Fixed Rate Cumulative Perpetual Preferred Stock of the prior General Motors Company (Prior GM) were exchanged on a one-for-one basis for shares of common stock and Series A Fixed Rate Cumulative Perpetual Preferred Stock (Series A Preferred Stock) of a newly organized Delaware corporation (HoldCo) that now bears the name General Motors

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Company. These new Hold Co securities were issued solely in exchange for the securities of Prior GM in connection with a merger (the Merger) effected pursuant to an Agreement and Plan of Merger, dated as of October 15, 2009, by and among Prior GM, HoldCo and GM Merger Subsidiary Inc., a Delaware corporation and indirect wholly-owned subsidiary of Prior GM. These new HoldCo securities have the same economic terms and provisions as the corresponding Prior GM securities and are held by HoldCo securityholders in the same class evidencing the same proportional interest in HoldCo as the securityholders held in Prior GM. The only asset currently owned by HoldCo is a 100% ownership interest in General Motors Holdings LLC, a newly organized Delaware limited liability company (Intermediate HoldCo). As a result of the Merger, Prior GM became a direct wholly-owned subsidiary of Intermediate HoldCo. In addition, in connection with the Reorganization:

Prior GM was converted into a limited liability company and renamed General Motors LLC;

HoldCo and Prior GM entered into amended and restated warrant agreements assigning to HoldCo all of Prior GMs rights, duties and obligations under the three separate warrant agreements originally executed by Prior GM in July 2009 in connection with its acquisition of substantially all of the assets of Motors Liquidation Company (Motors Liquidation). The operative provisions of the amended and restated warrant agreements are substantially identical to the original warrant agreements, except that the amended and restated warrant agreements provide that the warrants issued thereunder to Motors Liquidation and the UAW Retiree Medical Benefits Trust (the New VEBA) are now exercisable for HoldCo common stock rather than Prior GM common stock;

HoldCo entered into an agreement with Motors Liquidation and Prior GM relating to that certain Amended and Restated Master Sale and Purchase Agreement, dated as of June 26, 2009, as amended (the Purchase Agreement), among Motors

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Liquidation, MLCS, LLC (formerly known as Saturn LLC), MLCS Distribution Corporation (formerly known as Saturn Distribution Corporation), MLC of Harlem, Inc. (formerly known as Chevrolet-Saturn of Harlem, Inc.) and Prior GM, which provides that in the event that Prior GM becomes obligated under the Purchase Agreement to issue any adjustment shares to Motors Liquidation in the form of Prior GM common stock, HoldCo would instead issue any such adjustment shares to Motors Liquidation in the form of an equivalent number of shares of HoldCo common stock;

HoldCo, the United States Department of the Treasury (the U.S. Treasury), the New VEBA, 7176384 Canada Inc. (Canada Holdings) and Prior GM entered into a Stockholders Agreement, dated as of October 15, 2009 (the New Stockholders Agreement). The New Stockholders Agreement is substantially identical to the original stockholders agreement entered into by Prior GM, the U.S. Treasury, the New VEBA and Canada Holdings on July 10, 2009, except that the New Stockholders Agreement contains a provision terminating the original stockholders agreement;

HoldCo, Prior GM and Intermediate HoldCo entered into assignment and amendment agreements with each of the U.S. Treasury and the New VEBA whereby Prior GM assigned its obligations (i) as borrower under the Second Amended and Restated Secured Credit Agreement dated as of August 12, 2009 with the U.S. Treasury (the UST Credit Agreement), and (ii) as issuer under the Amended and Restated Secured Note Agreement dated as of August 14, 2009 with the New VEBA (the VEBA Note Agreement) to Intermediate HoldCo. Pursuant to the respective assignment and amendment agreements, the UST Credit Agreement and the VEBA Note Agreement were amended to reflect the postReorganization corporate structure of HoldCo and its subsidiaries. In addition, pursuant to the respective assignment and amendment agreements, certain of the representations and warranties, affirmative and negative covenants and events of default will also apply to HoldCo under each of the UST Credit Agreement and the VEBA Note Agreement and HoldCos activities will be limited to those

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incidental to the ownership of its subsidiaries, subject to certain exceptions, including the incurrence of certain indebtedness permitted by the UST Credit Agreement and the VEBA Note Agreement; and

General Motors of Canada Limited (GMCL), a subsidiary of Prior GM, entered into an amendment (the EDC Amendment) to its Second Amended and Restated Loan Agreement dated as of July 10, 2009 (the EDC Loan Agreement) with Export Development Canada (EDC). The EDC Amendment approved the Reorganization and made certain other modifications to reflect the postReorganization corporate structure of HoldCo and its subsidiaries. The EDC Amendment also incorporated certain amendments made to the UST Credit Agreement and VEBA Note Agreement in August 2009 so that certain representations concerning the collateral and disclosure of information, affirmative covenants with respect to financial reporting and notice of investments, negative covenants with respect to incurrence of indebtedness, fundamental changes and agreements restricting liens on assets and certain events of default, so that such provisions would be consistent with the corresponding provisions in the UST Credit Agreement and the VEBA Note Agreement. An Event of Default under the UST Credit Agreement by Holdco of certain of its representations, warranties and covenants under the UST Credit Agreement and the VEBA Note Agreement, respectively, are an Event of Default under the EDC Loan Agreement. Additionally, Prior GM ratified its obligations as a guarantor of GMCLs obligations under the EDC Loan Agreement and Intermediate Holdco entered into a guarantee of GMCLs obligations under the EDC Loan Agreement. Prior GMs guarantee of GMCLs obligations is secured by a first priority lien on 35% of its ownership interest in GMCL and a second priority lien on 65% of its ownership interests in GMCL. Intermediate Holdcos guarantee of GMCLs obligations will be secured by a first priority lien on 35% of Intermediate Holdcos ownership interest in GMCL and a second priority lien on 65% of Intermediate Holdcos ownership interest in GMCL when the ownership interests in GMCL are transferred by Prior GM to Intermediate Holdco, which is expected to occur on or about November 2, 2009.

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Prior GM continues to employ all U.S.-based personnel and operate the U.S. automotive business. The provisions of HoldCos certificate of incorporation (including the certificate of designations for the Series A Preferred Stock) and bylaws are substantially identical to those of Prior GM as in effect immediately prior to the Merger. The board of directors and officers of HoldCo are the same individuals who were members of the board of directors and officers of Prior GM immediately prior to the Merger.

Vision, mission & goals of the company:---

Vision:--Vision Statement
The GM vision is as follows: GMs vision is to be the world leader in transportation products and related services. GM will earn our customers enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people.

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The proposed new vision for GM is as follows: For GM to become the automotive industry leader in alternative fueled vehicles and providing superior quality products that global consumers call to mind when they think of quality and innovation. My vision for GM is to be the industry leader in innovation, and where all other industry competition strives to imitate.

Mission Statement
The current GM mission statements are as follows: Drive improvements in market share, revenue, brands, people, responsiveness, and cost effectiveness through the implementation of global common metrics and best practice sharing. The new proposed mission statement will be as follows: GM will become an industry leader, not a follower. To regain lost market share that was lost to foreign competition, and once again be the auto industry leader in sales and market share in todays global market.

Values Statement
The auto industry just like the global economy is going through tremendous change, due to rising fuel prices, and environmental worries, such as global warming. GM must use these threats as opportunities, and take advantage of changing consumer buying habits. GM needs to change consumer perception of the company, from a dull, poor quality, vehicles to innovative, quality, and environmentally friendly company. To do this GM must portray an image that states that GM values what the consumer wants and what the environment needs. Listen to what consumers are saying directly and indirectly about GMs current products, and create innovative, green, vehicles that turn consumers into customers. At the same time provide GM stakeholders pride and financial incentives to remain with GM.

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Goals:--General Motors Corp. is poised to take the lead in development and production of more fuel-efficient vehicles and the conversion to alternative power, such as electricity and hydrogen fuel cells, to power vehicles, Larry Burns, vice president of research and development and strategic planning, said at UD on April 13. Speaking to about 100 students and faculty, Burns said the growing demand for oil and fluctuating prices have created serious concerns for the automobile industry, which is almost totally dependent on gasoline. We are in a situation where energy is at the heart of the future of the world, Burns said, adding that demand for petroleum is expected to grow by 70 percent in the next 23 years. If we have energy security concerns today, imagine what those concerns are going to be in the year 2030. If you are in the auto business where we are 98 percent dependent on petroleum for our energy sources, imagine the business risk in not having solutions to these issues. Burns said General Motors has embarked on a major research and design strategy aimed at playing a leading role in the automobile industry while maintaining business sustainability. It's really time to seize this opportunity and the opportunity that technology brings, Burns said. We are seeking to improve the fuel efficiency and emissions of our vehicles. Essentially, we want to have zero-emission vehicles, and we want to get the car out of the energy/environmental debate. We believe the way to do that is to displace petroleum. The key to displacing petroleum is energy diversity, using petroleum and alternative sources of petroleum, biological and synthetic fuels and hydrogen and electricity. Burns said GM already has about two dozen vehicles in the market whose fuel consumption averages more than 30 miles per gallon on the highway. The higher efficiency, he said, has been made possible by innovations like active fuel

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management, in which some engine cylinders shut off when a vehicle is cruising at highway speeds, as well as energy-efficient six-speed transmissions. Some 2 million GM cars and trucks on the road can use flex-fuel--a combination of 81 percent ethanol and 19 percent gasoline--and 400,000 more are being sold every year, Burns said. The growing use of ethanol, he said, will not only ease dependence on petroleum, but it will create many opportunities to make ethanol from cellulose, which occurs naturally in plant cell walls. In contrast, Burns said, Toyota will not produce a vehicle that can run on 85 percent ethanol until the year 2010. That's how much of a lead we have, he said. The whole principle here is to create jobs in the United States by creating alcohol from cellulose, keep the dollars going outside the United States to buy petroleum here to drive our economy, and use a renewable source of energy that requires carbon dioxide [to be] removed from the atmosphere to grow those plants, Burns said. In addition to flex-fuel, GM is developing more electric hybrid vehicles, beginning with the introduction of 550 of the company's Allison hybrid buses since 2003. The buses use energy created from braking to charge a power source for the motor, Burns said. Electric hybrid technology has been built into the Saturn Vue and the same system will be put in the Saturn Aura and the Chevrolet Malibu. Burns: We are seeking to improve the fuel efficiency and emissions of our vehicles. Essentially, we want to have zero-emission vehicles, and we want to get the car out of the energy/environmental debate. Also in development is a two-mode engine, in which a six-speed transmission is fitted with four gears instead of six and two electric motors. The mechanical power path is then blended with the electric power path to help capture regenerative braking power and shut down some cylinders at cruising speeds, resulting in a 25-35 percent fuel efficiency. The technology will be available in the Suburban, Yukon and Escalade sport utility vehicles later this year.

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GM also is focusing on the development of variations of the electric hybrid engines to include electric power sources that can be charged from electricity mains. Such technology has been used in the Sequel, the world's most advanced hybrid vehicle, which travels up to 300 miles on its hydrogen supply, and accelerates to 60 miles per hour in less than 10 seconds. Burns praised UD for its role in the development of a hydrogen fuel cell bus that was recently unveiled on the Newark campus and said that such technology is a major part of GM's strategy. It is very, very nice to see that you have a hydrogen fuel cell bus running here on your campus, Burns said. You need to be enormously proud of that fact. There are not many of those buses that exist in the world and to be able to experience this cutting-edge technology firsthand and, importantly, to have created the relationships that allows you to get this bus built and on your campus is something that you should be very proud of. In addition to fuel sources, GM is also developing smart car systems, such as enhancing the use of the OnStar navigation and emergency assistance systems available on most GM vehicles by linking it to stability control systems. Stability control is based on steering movement, speed and chassis movement, Burns said. We can share that data between cars and predict where the car will be in the next 20 milliseconds. When we know where the cars are now, we know where they will be, and we can avoid crashes. We can also keep the space between cars uniform and improve traffic. Vehicle-to-vehicle communication is very exciting technology that General Motors is pioneering. Burns, who oversees GM's advanced technology, innovation programs and corporate strategy, began his career in 1969 as a member of the company's research and development staff, where his research focused on transportation, logistics and production systems. He has held executive positions in several GM divisions in the areas of product program management, quality, production control, industrial engineering and product and business planning. In May 1998, he was named a vice

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president of General Motors, with responsibility for research and development and planning. Burns holds a doctorate in civil engineering from the University of California at Berkeley. He also has a master's degree in engineering/public policy from the University of Michigan and a bachelor's degree in mechanical engineering from General Motors Institute (now Kettering University). DETROIT Admitting that there has been a lot of "damage" to General Motors in the aftermath of the federal bailout and bankruptcy, the automaker's new management team on Tuesday pledged that there will be no more "bad behavior" or "parlor tricks" as it makes the transition to newer products like the 2011 Chevrolet Cruze. Mark Reuss, the new president of GM North America, and Susan Docherty, the new GM vice president of sales, service and marketing, spent nearly an hour on a conference call fielding questions from a sometimes hostile media. At one point, Wall Street Journal reporter John Stoll described last Friday's management reorganization in negative terms, saying "it feels a lot like the old GM." Reuss fired back: "I guess that's what you feel. We're going to do different." Both Reuss and Docherty are longtime GM executives. Reuss told reporters that the new management team had its first meeting on Monday and laid out its goals for the automaker for 2010. "I'm not getting into a metric session," Reuss said, while refusing to put a number on GM's goal for future market share and other key measurements of success. "What we think success looks like for General Motors in 2010 [is this]. We need to repay the money that we've borrowed [from the federal government]. Everybody in this company wants that desperately. We want to make this country proud of General Motors, and we want to do that fast. The only way is with our products and how we sell those products and how we build those products. If we can get that done, and we

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can go public, and we can get the relationships of the American people back, man, look out. And that's what we talked about yesterday." In a rather stunning confessional, Docherty said: "What's different here is that in the old GM, we had a tendency to buy our market share. With our focus from going from eight brands to four brands, we're going to earn our market share. That's where the big difference is." Reuss added: "This is going to be a fundamental approach to being a great company. The initiatives, the parlor tricks, that's not what's going to be going on here." When Docherty was asked to explain her remark about market share, she added: "I'm not proud of the fact that we've been the incentive leader. We are going to pull back on incentives or be more strategic on incentives. As we transition from [Chevrolet] Cobalt to [Chevrolet] Cruze, I don't want to flood the market with Cobalts while we wait for Cruze. We don't want to jam cars on the marketplace to buy share. That's a bad behavior. [We have to] manage the transition between old products and new products." The new management team clearly is grappling with a GM image problem in the aftermath of its bankruptcy filing earlier this year. Reuss said, "There is a lot of damage with what people see in the media and a bankruptcy on one of the biggest, most respected companies in America." While unable or unwilling to quantify things like future market share, GM did reveal some key numbers in Tuesday's session. Docherty said the automaker's 60-day money-back guarantee has resulted in 163 returned vehicles out of 300,000 vehicles sold, as of December 6. "We're learning lots from everybody that does return," she said. Reuss said the automaker has taken information from one woman in Kentucky who returned a Chevrolet Silverado and are using her complaints to improve the truck "for the next program." Her issues included a too-small backseat, disappointing fuel economy and paint problems.

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Reuss said he is not seeking the job of GM CEO, which is up for grabs in the aftermath of Fritz Henderson's resignation last week.

ORGANIZATION STRUCTURE OF GENERAL MOTOR:-Board of Trustees

The responsibilities of the Board of Trustees are as follows: To strive to continue the Foundation until the etiology, prevention, and successful treatment of cancer have been found; to be responsible for exercising direction and control over the property and affairs of the Foundation; to be responsible for adopting by-laws and ensuring that their requirements are met by the various committees and personnel; final responsibility for amendments resides with the Board of Trustees; to indemnify members of the Foundation, Awards Assembly, Selection Committees, and others for any liability arising from their work on behalf of the Foundation; and to appoint members of the Awards Assembly on recommendation of the President of the Foundation.

The Board is composed of the following individuals: John F. Smith, Jr. Chairman, Chief Executive Officer and President General Motors Corporation Detroit, Michigan

Samuel A. Wells, Jr., M.D. President General Motors Cancer Research Foundation Chicago, Illinois

Joseph G. Fortner, M.D. President Emeritus General Motors Cancer Research Foundation New York, New York

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Karen L. Katen President Pfizer U.S. Pharmaceuticals Group Executive Vice President Pfizer Pharmaceuticals Group Vice President, Pfizer Inc. New York, New York

LaSalle D. Leffall, Jr., M.D. Professor and Chairman Department of Surgery Howard University School of Medicine Washington, D.C.

Phillip A. Sharp, Ph.D. Professor and Head Depamnent of Biology Center for Cancer Research Massachusetts Institute of Technology Cambridge, Massachusetts

Louis W. Sullivan, M.D. President Morehouse School of Medicine Atlanta, Georgia

Officers of the Foundation

Chairman John F. Smith, Jr.

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President Samuel A. Wells, Jr., M.D.

Vice Presidents James C. Cubbin

Executive Director, Health Care Initiatives General Motors Corporation

Christopher C. Green, M.D., Ph.D. Director, Technology/Research Partnerships General Motors Corporation Secretary

Deborah I. Dingell President, General Motors Foundation Treasurer

Ruth Boam Tax Officer

Kevin W. Cobb

Awards Assembly
The Awards Assembly is composed of 38 members. Each is a distinguished scientist or physician especially knowledgeable in areas of relevance to cancer. Assembly meetings are held two times per year or as determined by need. Members select prize winners from the three nominations of each Selection Committee. They also elect Selection Committee members. Awards Assembly membership is through appointment by the Board of Trustees on recommendation by the President of the Foundation. Assembly membership is for four years.

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Advisory Council Membership is composed of Assembly members whose active tenure has expired. Advisory members will be kept abreast of Assembly activities by viewing a copy of the minutes of each meeting. Their advice may be sought on various matters which concern the Assembly.

Selection Committees

There is a Selection Committee for each of the prizes. Each of the three committees is composed of seven members and two alternates elected by the Awards Assembly. Each Committee's Chairperson may add associate members and consultants, after approval by the Foundation's President, in order to ensure adequate coverage of a specialty of particular importance in a given year. Associate members and consultants are nonvoting. Each Committee has a Chairperson and Vice Chairperson. Each Selection Committee is multinational. The President of the Foundation and the Awards Assembly Chairperson serve ex officio on each committee. Committee membership is for two years.

Product hierarchy In a product hierarchy, there is a separate division for each product.or major product line. We use the term "product hierarchy" here, even though the groupings are sometimes made along other "missionoriented" lines such as geographical regions or market segments. Each division has a "product manager" and its own separate departments for different functions such as marketing, manufacturing, and engineering. General Motors was one of the earliest and best known examples of this form with its separate divisions for Chevrolet, Pontiac, Cadillac, and other product lines (seeChandler, 1962). In this form, the "executive office" may set long-range strategic directions, but it is not ordinarily involved in the operational coordination of tasks and processors. The lack of connection with the executive office for operational purposes is indicated by dotted lines in Figure 1. (This form is sometimes called the

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"multi-divisional" form [Chandler, 1962] or the "M-form" [Williamson, 19751.) The solution to the task assignment problem that is implied by this "pure" form is simple: Whenever a task of a certain type needs to be done, the product manager assigns the task to the department that specializes in that type of task. For example, in the "pure" form of this structure, the general manager of the Chevrolet division would ordinarily expect all new Chevrolet models to be designed by the engineering department in the Chevrolet division. In this "pure" form, there is only one department (or one processor) for each type of task, so the assignment decision is trivial. When a processor fails in a product hierarchy, the product division in which the failure occurs is disrupted, but the other divisions are not necessarily affected. For example, a major mechanical failure at a factory that produced only Chevrolets would not have any direct effect on the other divisions. A failure by the Cadillac marketing department to correctly predict what their customers would want in next year's models, would not necessarily affect the other divisions, either. Our formal model involves only the operational coordination involved in task assignment and processing so it does not include any interactions between the divisions of a product hierarchy. From the point of view of this model, therefore, a product hierarchy is equivalent to a holding company or, indeed, to a set of separate companies that do not share any resources.

Functional hierarchy
In a functional hierarchy, as shown at the bottom of Figure 1, processors of a similar type are pooled in functional departments and shared among products. This sharing reduces duplication of effort and allows processing loads to be balanced over all products. For example, General Motors might need less manufacturing capacity if instead of having to provide enough capacity in each division to meet peak demands it could balance heavy demands for one product against ordinary demands for other products that share the same manufacturing facility. As another example, having a single research department in a company instead of separate research departments in each division might reduce the need to duplicate expensive facilities and may allow a few people with specialized expertise to be shared among all products instead of having to hire separate specialists for each division. (The functional hierarchy is also

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sometimes called the "unitary" form or "U-form" (Williamson, 1975).) In a pure functional hierarchy, as we have defined it, the "executive office" must coordinate the operational processing for all products. The task assignment method implied by the "pure" form of this organizational structure is somewhat more complicated than for the product hierarchy, because an extra layer of management is involved: Whenever a task of a certain type needs to be done, the executive office delegates it to the functional manager of the appropriate type who, in turn, assigns it to one of the processors in that department. In order to make this assignment intelligently, the functional manager needs to keep track of the loads and capabilities of the processors in the department. For example, if General Motors were a "pure" functional hierarchy a central manufacturing department would contain all the manufacturing plants. The vice-president of manufacturing and his or her staff would be responsible for coordinating the sharing of these facilities to produce all the different kinds of cars for all the different product lines. This overall coordination requires significantly more information and interactions than does the simple product hierarchy. When an individual processor fails in a functional hierarchy, the tasks it would have performed are delayed until they can be reassigned to another processor. For example, if General Motors had a single centralized sales and distribution department for all its products, it would be relatively easy to shift car allocations from poorly performing dealerships to more successful ones. If GM had a pure product hierarchy, on the other hand, it would be very difficult to shift sales volume of Cadillacs into dealerships that handled only Chevrolets. There is another kind of failure however, in which the functional hierarchy is much more vulnerable. When a functional manager fails instead of just an individual task processor, the processing of the entire organization may be disrupted. For instance if the vice-president in charge of all manufacturing performed very poorly, the manufacturing of all

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SWOT ANALYSIS OF GENERAL MOTOR:--

Strengths
1. Large Market Share :-Although GM's market share in the US has dropped it is still very much competitive at 26 percent. They also have an increasing share in the Chinese market. With the right decisions there is no reason for GM to not become the automotive leader it once was.

Weaknesses
1. Behind on Alternative Energy Movement :-This is GM's biggest weakness. The alternative energy/hybrid trend has begun to take place in the automotive industry and GM has been one step behind the competition in terms of alternative energy vehicles. This has led to many problems including loss of market share and a decrease in company profit. In order for any automotive company to be successful from this point forward they must be Hybrid friendly and fuel efficient.

2. Global Experience :--As explained

2. Poor Organizational Structure

above even with GM's recent decline they As we can see in exhibit 1 of the case still have the market share and the experience to bounce back. They have been a worldwide company for nearly a century now and have established themselves as the global leader for most of them. If you recall I mentioned above that a current opportunity for GM is to expand globally and as we can see they GM's organizational structure seems to be too vertically integrated. This causes a lack of communication between employees from top to bottom and may have played a part in GM falling behind on the alternative energy movement

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already have the experience to do so. It is just a matter of the correct planning and proper implementation of those plans that will decided whether or not GM's goals are achieved 3. Variety of Brand Names GM as I mentioned has been the automotive leader for the majority of the last century. A large reason for that is the wide variety of quality brand names that appeal to all target markets. The current GM brands include: Chevrolet, GMC, Cadillac, Buick, Pontiac, Saturn, Hummer, Saab, Daewoo, Opel, and Holden. 4. GMAC Customer Financing Program Since its establishment in 1919 it has 4. Overly Dependent on US market GM has become too dependent on the US 3. Stagnant Profitability :---Looking at GM's profit we see that they are certainly struggling with respect to the size of their company. Their profit margin was about 1.5% and the ROE has dramatically decreased over the recent years dropping to 10% in 2004. This is a situation that shareholders will not be pleased with.

proven to be GM's most reliable source of market and must take advantage of the revenue opportunity to expand globally. The competition is becoming too strong to focus on just one country 5. OnStar Satellite Technology Developed in 1996 OnStar currently has over 3 million subscribers and is standard on all GM vehicles. This technology allows the vehicles to be tracked in the event of an emergency or theft. It also allows the driver and or passengers the ability to communicate with OnStar personnel at the click of a button. 5. Overly Dependent on General Motors Acceptance Corporation(GMAC) Financing GM has become too dependent on its financing program. Granted it is a great strength for GM, however they once again cannot rely solely on financing in order to turn profit, especially if they want to compete with Honda and Toyota who are rapidly growing

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6. Poor Credit Status :--GM's credit status has like everything else has been steadily declining. Their current ratio is just barely above 1 and their acid test is even lower. Although, I don't see them getting denied based on their credit at this point, the seriousness of the matter is certainly apparent.

Opportunities
1. Alternative Energy Movement It is obvious that GM was behind its competition with regards to the research and development of hybrid vehicles. However hybrid technology is still very much new giving GM the opportunity to once again become the automotive industry's leader in innovation and technology.

Threats
1. Rising Fuel Prices With GM being a large producer in both trucks and SUV's, sales have drastically decreased due to the lack of fuel efficiency. The rise in fuel prices has played a significant role in creating the opportunity for development of both hybrid and more fuel efficient vehicles. As you will find with most threats, an equal opportunity will usually emerge as is the case here with GM's opportunity mentioned above.

2. Continuing to Expand Globally. Recently GM saw an increase in the Chinese automotive market, which proves their needs to be more emphasis put on foreign markets. If GM can infiltrate these markets and successfully

2. Growth of Competitors GM no longer has the luxury of being the known leader in the automotive industry and faces the reality that they are in serious trouble. As I mentioned earlier

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grow along with their continuing focus on Toyota took the first step in the direction the US market they will be headed in a positive direction. . of hybrid technology and has since drastically grown and become the questionable automotive frontrunner to start the 21st century.

3. Low Interest Rates With the right marketing strategy the low interest rates have the potential to generate an immediate increase in sales

3. Pension Payouts. Part of this threat is their own doing and the other is simply unavoidable. GM is responsible for providing generous pension benefits to its employees, which at the time seemed like a great idea, however they are now experiencing problems as more and more people begin to collect.

4. Develop New Vehicle Styles and Models This is an opportunity that will never be satisfied, meaning that GM should always be attempting to develop the automotive world's most popular vehicles, and as we know, what is in today will be out tomorrow.

4. Increased Health Care Costs GM, like many large companies with quality employee health care benefits, is experiencing a large financial hit that only gets worse as time continues.

5. Rising Supply Costs, i.e. Steel Once again this threat affects the entire automotive industry and forces each

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company to cut manufacturing and production costs as much as possible, without taking away from the quality of the product.

Functional pattern:People:--In order for GM to remain one of the top competitors in China, it needs to invest in human resources. In China, many people go to vocational or trade schools instead of attending high school It would be advantageous for GM to give away scholarships and internships for people interested in becoming mechanics. GM would offer greater financial support for mechanics who agree to work for GM after finishing with their training school. As part of the lock-in strategy of the plan, GM could organize meeting and training sessions for mechanics and engineers aimed at familiarizing them with GM models. In addition, GM should donate trucks and cars, to vocational schools for mechanics. This will improve the company image of GM, and familiarize the people studying at these schools with GM automobiles. This also gives GM an advantage for the auto purchasing choices these people make in the future, since they will be more comfortable with GM models. Finally, GM should invest in providing better training for car dealers in GM dealerships. Currently, car dealerships in China suffer from having inexperienced car dealers Many car dealers know nothing about cars and the only training they receive comes in the form of an information pamphlet they are instructed to read GM would greatly benefit from providing effective training to dealers selling GM automobiles. By providing buyers with professional and knowledgeable sellers, GM can improve the overall experience of its customers, hence build up on its reputation, and perhaps help it to establish brand loyalty from its buyers.

Chinese Consumers
The culture of Chinese consumers offers the opportunity for GM to gain a strong edge

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over its Asian and European competitors. One of the major points is their mild dislike of the Japanese and their strong trust of American products [5]. Due to this, GM has an advantage in that their products will be inherently preferred over Japanese products by some Chinese consumers. In addition, Chinese people have historically saved a higher portion of their income. However, they are also more willing to dish out more money when it comes to quality because of their high emphasis of self-image [5]. This creates a dynamic where brand image and reputation play major roles in purchasing decisions, especially for more expensive goods. Furthermore, the stimulus package recently passed by the Chinese government promises to provide further incentives for large consumer purchases, such as buying a car In 2009, GM employed approximately 244,500 people

around the world. The Renaissance Center, located in Detroit, Michigan, United States, is GM's global headquarters. In 2008, GM sold 8.35 million cars and trucks globally.[11] GM is the majority shareholder in GM Daewoo Auto & Technology Co. of South Korea and has collaborations with Shanghai Automotive Industry Corporation of China, AvtoVAZ of Russia, and most recently, UzAvtoSanoat of Uzbekistan. GM has had collaborations with various automakers including Fiat and the Ford Motor Company. GM retains various stakes in different automakers. GM's best success internationally has been its performance in China, where GM's sales rose 66.9 percent in 2009, selling 1,830,000 vehicles and accounting for 13.4 percent of the market

POLICIES OF GENERAL MOTOR:-1. General Motors Company (GM) is committed to being a responsible corporate citizen, to ensuring compliance with the letter and spirit of the law, and to promoting disclosure and accountability regarding political contributions and expenditures.

2. This policy supports GMs interest in promoting public policies of concern to GM, educating public officials about our business, and facilitating employee contributions to political candidates through the General Motors Company Political Action Committee (GM PAC) and various GM state political action committees, while complying with all

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relevant laws and regulations governing political contributions or expenditures for federal, state, or local elections, including the reporting and disclosure of such amounts.

3. Federal law generally does not permit contributions, including in kind contributions, by corporations to candidates for federal office or national party committees, but corporations may make contributions to candidates running for state or local office in some states and may contribute to various organizations that engage in political activities.

4. GM and its employees participate in the political process as individuals and through the GM PAC and various GM state political action committees, the purpose of which is to contribute funds of eligible employees to political committees or candidates. These political action committees are funded by voluntary contributions from eligible employees. As permitted by law and authorized by the Vice President Government Relations, corporate funds and facilities may be used to provide the administrative support for the operation of GM political action committees.

5. Using the following criteria, GM PAC and GM state and local contributions will be guided (pursuant to governing law) by a Steering Committee and a separate Campaign Selection Committee appointed by the Chief Executive Officer of GM: a. Public integrity of the candidate b. Representation of a jurisdiction of importance to GM c. General support for issues of importance to GM d. Service in a leadership role e. Nature of the opposition f. Financial need

6. The Vice President Government Relations will review, at least annually, with the Public Policy Committee of the GM Board of Directors all corporate political contributions as well as GM PAC and various GM state political action committee contributions and expenditures and the process by which those are made.

7. To promote transparency, GMs annual voluntary disclosure will include the following information on GMs publicly available website:

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a. A copy of the General Motors Policy on Corporate Political Contributions and Expenditures,

b. A list of the amount and recipient of corporate contributions to section 527 organizations, c. A list of the names and amounts of corporate contributions made to individual candidates for state or local office,

d. For each U.S. organization identified as tax-exempt by the Internal Revenue Service as either a section 501(c)(6) trade association or a section 501(c)(4) social welfare organization that receives at least $50,000 in dues or similar payments during a given year, the portion of the payments that is identified by the organization as being used for non-deductible political expenditures, and

e. A link to the FEC website which details employee contributions to the federal GM PAC as well as GM PAC contributions.

8. GM will disclose the above information by March 1 of the year following the year in which the payments were made.

9. GM will not reimburse anyone for a political contribution or expenditure.

10. GM encourages elected officials to tour GM facilities consistent with applicable laws and policy. Candidates for public office are not permitted to use GM facilities for campaign purposes, such as the distribution of campaign literature and making of campaign speeches, unless authorized in advance by the Vice President Government Relations and permitted under governing law and policy.

11. GM has supported national party conventions and selected meetings of public officials as an opportunity to promote our products and public policy positions. At the time of the national political party conventions, GM will carefully consider its convention participation and attendant opportunities to showcase its products and to support national party committees, host city committees, or other organizations involved with the convention.

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12. Republican and Democratic Presidential candidates may visit no more than three GM plants at the mutual agreement of GM and the National campaign headquarters of the nominees during the election cycle. These restrictions apply not only to visits by the candidate but also to visits by the candidates immediate family.

13. GM encourages personal participation by employees in the political process, consistent with good citizenship, including exercising their right to vote. However, employees political efforts, such as helping to elect a federal, state or local official, must be on a purely personal basis, and may not in any way imply that such activities have the concurrence or endorsement of GM. Except for participation in GM PAC and various state political action committees or other political activity directly authorized in advance by the Vice President Government Relations (subject to applicable laws), GM employees may not make or offer contributions, expenditures, or assistance, on behalf of GM, in connection with elections to public office. GM employees may not furnish services to any candidate or his or her staff during the employees normal working hours or use corporate stationery, facilities or other property to support a candidate. In addition, employees should not use their positions or titles with GM in their personal efforts to elicit support on behalf of a candidate or political party. All GM employees should be alert to the possibility of actions that might be considered contrary to this policy and notify their management if they become aware of such actions.

14. GM needs to maintain its ability to interact with a comprehensive network of thought leaders who help shape public opinion and policy about the auto industry and at the same time maintain the highest standards of integrity and the ethical conduct of business. To that end, GM may provide information to legislators, regulators and the public, in the form of testimony, advertising, communications or information releases.

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Findings:y

76 percent of U.S. consumers would switch brands based on a companys image and 55 percent said they always take into account a companys ethics and values when buying products or services.

A Wall Street Journal survey found that ethics and values were the most important corporate attributes in assessing the value of a company.

Among large corporate Web sites, no Fortune 20 company site emphasizes its community partnerships and community impact across the globe.

MS&L has conceived and developed a range of strong, interactive content on the site, with input from GM stakeholders. One of the sites key tools allows a consumer to compare the fuel economy of any GM vehicle to any of its competitors, and to calculate your annual fuel costs based on driving habits and local prices. An interactive graphic showing how fuel cell vehicles work has been used in presentations to GM directors, has been translated into four European languages and is currently being translated into Mandarin. A Google map shows GMs presence in the U.S., including its hybrid buses in city transportation fleets, in-kind donations to schools, truck donations to The Nature Conservancy, and GM facilities. A database of profiles of GM manufacturing facilities in the U.S. gives key information about each plant, including its community activities and the amount of waste and emissions it reports each year to the EPA. The database is also used on GMs media site, and a microsite built for journalists covering labor negotiations with the UAW. The site has enjoyed amazing success. In 2006, more than 1.2 million unique visitors came to the site and viewed more than 3.9 million pages. In a major independent review of automotive web sites in 2002, GM-ability was named as an industry model for its enhancement of GMs corporate image.

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Chevrolet cars are seen at a GM dealership in Miami, Florida August 12, 2010. Credit: Reuters/Carlos Barria By Clare Baldwin and Kevin Krolicki NEW YORK/DETROIT | Tue Aug 17, 2010 7:40pm EDT NEW YORK/DETROIT (Reuters) - General Motors Co is unlikely to file for its initial public offering on Tuesday, three people familiar with the situation said. Even as recently as Tuesday morning the filing had been expected on Tuesday, a fourth person with knowledge of the preparations said. It is unclear why the delay in the much-anticipated filing emerged but the decision on when the paperwork for an IPO is filed with U.S. securities regulators now depends entirely on GM and not the underwriting banks, the three sources said. The initial S-1 filing that GM plans to make with the U.S. Securities and Exchange Commission has been completed, they said.

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Ron Bloom, the Obama appointee overseeing the government's investment in GM and Chrysler Group LLC, declined to comment on the GM IPO on Tuesday. Bloom, who was attending an event in Cleveland, said U.S. Securities and Exchange Commission regulations barred him from discussing anything related to the expected filing. In just over a year, the No. 1 U.S. automaker has gone from bankruptcy to the brink of a stock offering expected to be one of the largest ever. A successful GM IPO could bolster the Obama administration's case that the bailout of GM was a justified use of taxpayer funding. The U.S. government stepped in with a $50 billion bailout of GM and currently holds a 61 percent stake in the company. GM's IPO is expected to be between $15 billion and $20 billion, which would make it one of the largest IPOs, globally, of all time. Its expected debut, sometime between late October and the U.S. Thanksgiving holiday at the end of November, means that the automaker's first trades will come right around the time of U.S. midterm Congressional elections. Government officials and GM executives have repeatedly denied any link with the elections. GM earlier on Tuesday recalled more than 243,000 crossover utility vehicles, mainly in the United States, to inspect safety belts for possible damage.

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Conclusion:-Porters Five-Forces Analysis The competitive structure of an industry is another important component of identifying factors that are a threat to diminish profitability. One of the most efficient ways to assess competitive issues is to consider Michael Porter's five-force analysis. Porter (1980, 1985) has highlighted five such factors: (1) rivalry between existing competitors, (2) threat of entry by new competitors, (3) price pressure from substitute or complementary products, (4) bargaining power of buyers, and (5) bargaining power of suppliers. 1. Rivalry between existing competitors With the rise of foreign competitors like Toyota, Honda and Nissan in the 1970's and 80's, rivalry in the American auto industry has become much more intense. Firms compete on both price and non-price dimensions. The price competition erodes profits by drawing down price-cost margins while non-price competition (e.g., new car rebates and interest free loans) drives up fixed cost (new product development) and marginal cost (adding product features). One of the other reasons there is such high rivalry is that there is a lack of differentiation opportunities. All the companies make cars, trucks or SUVs. The competitors are compared to one another constantly. In recent years there has been significant market share variation, another indication of rivalry and its very strong threat to profits. 2. Threat of entry by new competitors The presence of new firms in an industry may force prices down and put pressure on profits. There are, however, barriers to entry that tend to protect established firms. One would expect the production of automobiles to require significant economies of scale, an important barrier to entry. The new entrant would have to achieve substantial market share to reach minimum efficient scale, and if it does not, it may be at a significant cost disadvantage. While the evidence suggests that economies of scale in the auto industry are substantial, there are also indications that large size may not be as important as

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commonly assumed. Nevertheless, entry would represent a large capital investment to any new firm and the body of research still indicates that economies of scale represent a substantial barrier to entry. Consequently, entry is currently a weak threat to profitability. 3. Price pressure from substitute or complementary products While five-forces do not directly consider demand, it does consider two factors that influences demand substitutes and complements. Although new cars generally are

slightly price elastic, suggesting few real substitutes (e.g., bus and rapid transit), the demand for a particular model is highly sensitive to price because of the availability of close substitutes for a given model. A change in the price of a complementary product (e.g., gasoline, batteries, and tires) could have a significant impact on the demand for automobiles. The rising price of gas, an important complementary product, is likely to affect some firms more than others depending upon the vehicle composition. Recent rising fuel prices are likely to have a greater impact on the big three (GM, Ford Motor and Daimler-Chrysler) whose most profitable models are energy inefficient pick-up trucks and sports utility vehicles. On balance, the overall impact on "industry" profitability from substitutes and complements is weak to moderate. 4. Bargaining Power of Buyers Buyer power refers to the ability of individual customers to negotiate prices that extract profit from the seller. Individual consumers have some influence over price within a given dealership, but little power over manufacturers. Customers can easily, and with little cost, switch to other auto dealers. Furthermore, customers now have access to market information (prices and costs) from the Internet that enhances their negotiating power. But when you have many individual customers, each representing a small proportion of total sales, they will have little bargaining power with manufacturers and therefore pose a weak threat to industry profit. 5. Bargaining Power of Suppliers

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Auto manufacturers require inputs-labor, parts, raw materials and services. The cost of these inputs can have a significant effect on profitability. Whether the strength of suppliers is weak, moderate or strong depends on how much bargaining power they can exert. The auto manufacturers have large supplier networks that appear to exert little bargaining power. Nevertheless, the United Auto Workers (UAW), the only supplier of labor, has historically exerted a great deal of leverage over the benefits and wages provided by the big three. Because of this historical dominance by the UAW and the uncertain results of their current negotiations with the big three, one has to characterize supplier power, at least in this segment of the American market, as a strong threat to profits.

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BIBLIOGRAPHY

1. Robbins, Judge & Sanghi : Organizational Behavior, 2007, Dorling Kindersley (India) Pvt. Ltd.

2. Greenberg & Baron: Behavior In Organization,2003, Prentice Hall of India Pvt. Ltd. 3.L.M. Prasad: Organisational Behavior, 2004, S. Chand & Sons. 4.IFFCO AT A GLANCE 2006-07. 5.Dr. U. S. Awasthi, Indian Farmers Fertilizer Cooperative LimitedExperiences. 6. www.iffco.nic.in

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References:[1] http://news.bbc.co.uk/1/hi/business/7880806.stm

[2] http://www.altassets.com/casefor/sectors/2005/nz6592.php

[3] http://burnickblog.sovereignsociety.com/2008/01/chinas-car-buye.html

[4] http://news.bbc.co.uk/2/hi/business/6658583.stm

[5] http://money.cnn.com/2005/08/09/news/international/china_poll/index.htm

[6] http://www.shanghaidaily.com/sp/article/2009/200903/20090306/article_393318.htm

[7] http://fastlane.gmblogs.com/archives/2006/12/buick_is_popula_1.html

[8] http://www.nytimes.com/2009/03/05/world/asia/05china.html?_r=2&ref=asia

[9] http://www.buyusa.gov/mexico/en/automotive_manufacturing.html

[10] http://www.chinadaily.com.cn/bizchina/2008-04/22/content_6635789.htm

[11] http://www.insideselfstorage.com/articles/4a1FEAT6.html

[12] http://www.chinacartimes.com/wp-content/china-car-sales-2008.pdf

[13] http://www.ilo.org/public/english/employment/skills/hrdr/publ/010.htm

[14]http://media.gm.com/division/2003_prodinfo/03_corporate/03_Corporate_Manufact uring.pdf

[15]http://www.shanghaidaily.com/sp/article/2008/200812/20081218/article_384907.htm

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ANNEXURE

General Motors Company today announced its first quarter 2010 results, marked by revenue of $31.5 billion and operating income of $1.2 billion. Net income attributable to common stockholders was $0.9 billion, resulting in earnings per share on a diluted basis of $1.66. GMs first quarter adjusted earnings before interest and tax (EBIT) was $1.7 billion, after adjusting for the favorable impact of the sale of the Saab brand. GM North America had EBIT in the first quarter 2010 of $1.2 billion, up from a loss of $3.4 billion in the fourth quarter 2009. GM Europe had a loss before interest and taxes of $0.5 billion; an improvement of $0.3 billion from the fourth quarter. GM International Operations posted EBIT of $1.2 billion, up $0.5 billion from the fourth quarter. Cash flow from operating activities was $1.7 billion and after adjusting for capital expenditures of $0.7 billion, free cash flow was $1.0 billion. GM ended the first quarter with $35.7 billion in cash and marketable securities, including funds in escrow. Were pleased with our first quarter performance, in particular achieving profitability, said Chris Liddell, vice chairman and chief financial officer. In North America we are adding production to keep up with strong demand for new products in our four brands. Were also steadily growing in emerging markets, keeping our costs under control, generating positive cash flow and maintaining a strong balance sheet. These are all important steps as we lay the foundation for a successful GM. Forward-Looking Statements: In this press release and in related comments by our management, our use of the words expect, anticipate, possible, potential, target, believe, commit, intend, continue, may, would, could, should, project, projected, positioned or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to realize production efficiencies and to achieve reductions in costs as a result of our restructuring initiatives and labor modifications; our ability to maintain quality control over our vehicles and avoid material vehicle recalls; our ability to maintain adequate liquidity and financing sources and an appropriate level of debt, including as required to fund our planning significant investment in new technology; our ability to realize successful vehicle applications of new technology; and our ability to comply with the continuing requirements related to

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