Question.1983 - CEO of General Motors, Mary Barra, defends her position for five plant closures following the multi-billion dollar bailout, tax cuts, and record-breaking profits. Analyze according to chapter 9 in your text. Post a synopsis of the team's discussion to the Module 5 Team Synopsis by Thursday at 11:59 pm. Your team should then respond to another team's post by Monday at 11:59 pm. 1. Use your group's forum to discuss this prompt with your team members and develop the team's synopsis. Answer the following questions: Do you agree with her decision? Why or why not. Use the course materials to support your assertions. What are the political and economic ramifications of the decision? Who benefits most and least? Develop a Strategy-Evaluation Framework to determine the effectiveness of her decision.
Answer Below:
Do you agree with her decision? Yes, the decision taken by Barra is valid as per the present situation of General Motors because the closure of the five plants will reduce the operating expenses and thus will improve the profitability of the company and the taxes of the company will also be reduced. However, the strategy evaluation assessment matrix suggests that there will be external threats like opposition from the government in implementing this decision (David, 2011). The political and economic ramifications The political ramifications are the potential obstruction from the government in facilitating such closure as this will result in loss of job on a mass scale which will hamper the wellbeing of the general public. However, the taxes of the company will be reduced on account of the closure of the lossmaking units because the total taxable income will be reduced. Economic ramifications may include poverty as well as lack of employment of many people as the people who were employed will face retrenchment on account of this decision (Açikgöz& Günay, 2020). Who benefits? The company owner as well as the shareholders will benefit the most as the company will be saved from bankruptcy. This decision will be profitable for the company as this will reduce the operating expenses and also will generate higher profits as the salaries of the employees of the closed units will not be required to be paid. However, the employees will lose their jobs and therefore will suffer the most. Strategy-Evaluation Framework The strategy evaluation framework will take into account the reviewing of the underlying bases of the strategy will be considered first (David, 2011). The analysis of the external factors suggests that the profit of the organization will be improved as a result of this strategy as the closure of the five plants will reduce the operating expenses of these plants as well as payment of lower taxes. This will help in reducing external threats relating to the competition. Also, this initiative will help to tackle the competitors as the financial condition of the company will be improved. Thus this strategy will result in significant changes and hence the correct actions will be required. Her strategy Yes her strategy will pay off because the running cost of the closed plants will be reduced and this will help in increasing the profits of the company and will save the company from bankruptcy. The overhead expenses of the plants will also be reduced and overall the company will be liable to pay lower taxes (David, 2011).More Articles From Management
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