Professor says Cash for Clunkers helped restructure GM’s debt, not the company

“Major businesses like GM could benefit from reevaluating their organizational process,” said Cipolla

Published Aug. 27, 2009

Does what you know impede progress? That’s the question Lynn business professor, John Cipolla, asks in his recent article, “The Organization as Artifact: Structuring the Organization in Times of Constant, Dramatic Change.”

John Cipolla, A.B., Ph.D.For General Motors (GM), “Cash for Clunkers has given GM time to readjust, but it doesn’t appear that they have used either this or the bailout to change the way the company deals with their major stakeholders,” said Cipolla. “They are restructuring their debt, not their company.”

Cipolla, an operational management specialist, thinks that GM needs to take another look – with a greater emphasis on marketing and service perspectives – at their customers. “GM’s current management has come from their financial ranks. They tend to see the world through finance colored glasses,” said Cipolla. “They work best with the banks, bondholders, and shareholders. Customers and dealers are seen as sources of income.”

Who are GM’s customers? Cipolla believes GM is still targeting the same SUV, gas-guzzling group it did 20 years ago. “The same people who bought those vehicles aren’t going to be happy with the Volt. How are they going to attract those people,” asks Cipolla. “I don’t see GM making any of the kinds of organizational changes that would attract people who are fuel cost conscious or environmentally concerned.”

According to Cipolla, major businesses including GM, health organizations, financial companies, and the Federal and state governments could benefit from reevaluating their organization processes to improve efficacy.