Change Management Report: GM's Strategic Shift to Autonomous Vehicles

This report provides an in-depth analysis of General Motors' (GM) strategic shift towards producing autonomous vehicles. It begins by outlining the reasons behind this change, examining external factors through a PESTEL analysis, including political, economic, social, technological, environmental, and legal influences. The report then employs Lewin's Force Field Model to identify driving and restraining forces influencing the change, highlighting factors such as reduced accident rates and changes in consumer behavior as drivers, and employee empowerment and work involvement as restraints. It details GM's actions taken to facilitate the transition, such as the launch of semi-autonomous features and partnerships with other companies. The report suggests strategies to overcome resistances, including forming connectivity with insurers and system analysis of risky driving practices. The report concludes by emphasizing the need for quality over speed in the production of autonomous vehicles and highlights the importance of adapting to the changing automotive landscape.

Running head: CHANGE MANAGEMENT
Electric Autonomous Vehicles
[General Motors]
Name of the student:
Name of the university:
Author note:

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Executive summary
The report is aimed at discussing a change that is currently under progress in General Motors. It
is about GM's plans to produce autonomous vehicles. The report investigates the reasons behind
the change and how to attain it successfully. In doing so, the report identifies two change
constraints for GM. These are ‘employee empowerment’ and ‘work involvement levels of
employees’. The study recommends that these resistances can be overcome in the future. Since
autonomous vehicles can produce real-time updates of the route, its demand should pick up in
the future. It can also increase lane capacity and manage to prevent accidents more than
traditional cars. These benefits of driverless cars can increase consumers’ willingness to pay for
it.

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Table of Contents
1.0 – Introduction.............................................................................................................................3
2.0 – Why Change...........................................................................................................................3
External (PESTEL)......................................................................................................................4
3.0 – How change............................................................................................................................6
4.0 – Resistances to Change..........................................................................................................11
5.0 – How to Overcome Resistances.............................................................................................12
6.0 – Conclusions...........................................................................................................................14
References......................................................................................................................................15

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1.0 – Introduction
In the research of Khan and Hashim (2014), change is a thorough act of helping a
company move from the current position to a desired future state. The current state may or may
not be the one the company had wanted it to be. If the current state is as per the business demand,
the change is undertaken to target new opportunities or earn more shares from the existing
market. In case, current business performance is not as expected and the business is going into
losses or the profits have become stagnant, the change is then undertaken to overcome the state
and drive towards the profitable state.
In this report, the change will be studied in the context of ‘GM’, the chosen case
company. GM is getting ready for a post-car future, which is the production of autonomous
vehicles. For every change that takes place, there have to be some reasons behind it. GM also has
valid reasons for its ongoing change. It is not the first time when GM is changing but has
undergone several times back in the past also. Factors that have been the reasons behind GM's
going for autonomous vehicles will be studied in the later part of this study.
2.0 – Why Change
It was a remarkable achievement and a history was created when auto cars replaced the
usually used horses in ancient times. Since then the automotive industry has been home to many
top-class automotive companies situated across worldwide countries. From General Motors,
Tesla, Toyota to Ford, the automotive companies witnessed many rising and falling trends such
as basic cars, luxury cars, electric cars, etc. However, it was since 2016 when new technologies
began to enter the automotive sector and started disrupting it notably. Automotive companies are

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finding it as the opportunity to explore new markets as well as overcome their long-standing
barriers like greenhouse gas emission (Ellingsen, Singh and Strømman 2016).
In this section, the reasons for the change will be studied in the context of General
Motors (GM). These reasons will communicate why GM is currently into a change process. The
reasons will be identified by conducting an external environment scan of GM.
External (PESTEL)
 Political
According to a report, the automotive industry is unexpectedly getting slower at a faster pace.
This shift in trend can bring massive economic threats to the world. The sector experienced a
sharp downturn in terms of production and sales in recent times. According to the International
Monetary Fund (IMF), this trend shift is expected to continue further also. If it continues the
same way will affect the global economy (Businessinsider.in 2020). The ‘International Monetary
Fund’ further says that this decline in auto sales represented 20% of GDP slowdown in 2018 as
well as nearly 30% in the following year (Businessinsider.in 2020). Car saturation is picking up
in wealthier regions and struggling to pick up in developing markets (Businessinsider.in 2020).
 Economic
China is the world’s biggest automotive market considering the unit number. The market
remained challenging for a reason it offers fierce market competition to automobiles. However,
the circumstances are about to change in the nearing future. The China market would not be the
same ten years from now because of below-mentioned reasons (Wu et al. 2017):

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 Extreme market fragmentation
 Expansion of reusable car market
 Uncontrollable governmental pressure to adopt measures to control pollution
The supply chain essentials of automotive companies are decades old. Hence, there is an
immediate need to eliminate failures from it and make it the supply chain of the 21st century.
Notably, a delay of one hour in the supply would mean a shut down for a production line.
 Social
Motor vehicles are among the hugely dangerous products sold anywhere in the world.
Automobiles pose a huge risk of accidental death as compared to many other products. In the
United States alone, the annual auto-crash deaths have not been below the mark of 30,000 since
the 1940s. Such auto crashes result in social costs, which is even bigger than the deaths. The
victims who survive often have to undergo expensive medical expenses. The losses that occurred
to those people do not just stop here but continues further. In many cases, the victims even lose
their jobs for not being physically capable to continue with it. Auto accidents also result in
property damages mostly related to the automobiles those met with crashes. Auto crashes
damage highway bridges as well as other transportation infrastructure. Severe crashes can result
in serious non-economic consequences also like pain and suffering. Studies suggest that such
non-economic losses can amount to more than twice the scale of economic damages as caused by
auto crashes (Cato.org 2020).
 Technological
As per a report, 15% of passenger vehicles will become autonomous by 2030. The number of
driverless cars will be growing. This is such an emerging area that even non-automotive

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companies like Google and Apple are to utilize this growing opportunity. Google's self-driving
cars are already through the testing phase (ETAuto.com 2020). German-based Bosch will soon
be working in the area of autonomous vehicles. BMW, the German luxury carmaker will also be
entering the autonomous sector as it intends to allow its customers the pleasures of high
performing cars. The competition is not just there between many non-automotive companies but
also worldwide countries. Britain wants to become the leading country in terms of the number of
autonomous vehicles on its roads by 2025 (ETAuto.com 2020).
 Environmental and Legal
The automotive sector should overcome huge tariffs, and punishing pollution acts and
regulations. It is due to this incrementing challenges to automobiles that scientists, engineers
and global automakers are giving their hard to find out the best alternatives to fuel technology.
The tendency to look towards hybrid technology, electric cars and alternative fuels have
increased rapidly in recent times. The universal challenge in the context is the broad
unavailability of the fuel. Extreme climates make the available fuels hard to utilize.
3.0 – How change
This section will conduct a ‘Force Field Analysis’ of GM to find its driving and
restraining forces of change.

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Fig 1: Lewin’s Force Field Model
(Source: Capatina et al. 2017)
The above is a diagram of the ‘Lewin’s Force Field Model’. Lewin’s model says that a
business should respond to the environment to sustain its growth. Also, a business problem
should be dealt with a change solution. That change solution may have some driving forces as
well as the restraints. The model says that once the restraining forces are being identified these
should be mitigated to be able to lead the change. Hence;
Driving forces:
Driverless cars can significantly reduce auto crashes on the road and thus its social and
economic impacts like property damages, deaths, injuries, etc. Autonomous vehicles score high
in terms of the accuracy of driving as compared to traditional cars. It is due to the mechanisms it

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uses such as V2I (vehicle-to-infrastructure) (Taeihagh and Lim 2019). Changes in consumer
behavior such as business meetings in cars can be best managed in autonomous cars.
Bureaucratic leadership in the company let them focus more on numbers than the quality.
However, numbers for auto car sales are falling and the coming future is expected to be
dominated by electric cars as well as ‘Electric Autonomous Vehicles’. The need for cost-cutting
to increase the profit was one of the internal forces of change. GM pays high wages to its
employees than many other motor brands in the world. The average wage costs for GM is way
much higher than of Toyota (Khan and Hashim 2014).
Restraining forces:
Job role dependence on bureaucracy affects employee empowerment. It does not just limit
one’s opportunity to prove its worth in the company but also his or her work morals. As a result
of a bureaucratic leadership structure in the company, GM has not been a highly rated company
for professionals. Due to lack of empowerment work involvement levels of employees in the
company is not that appreciating (Hanaysha 2016).
Actions are so far taken:
GM has already taken initiatives in the field of autonomous vehicles. GM launched a
semi-autonomous Super Cruise in 2018. In the same year, GM filed a petition to run a
commercial ride-sharing business by using autonomous Chevrolet Bolts. It has also received
$2.25B from Softbank to invest in its autonomous project. GM acquired ‘Cruise Automation’, an
autonomous tech start-up specialized in electric cars, autonomous vehicles, etc. (Cbinsights.com

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2020). The company invested an additional $1.15B in Cruise. All these deals have proved
fruitful for GM as the Cruise prototypes have already been tested in Arizona. GM announced a
partnership with Honda to proceed further with its autonomous vehicles. Honda will be investing
$2.75B in GM’s Cruise unit in the next 12 years (Cbinsights.com 2020).
Despite all the progress made so far, GM is yet to travel miles to make its visions
happen with autonomous vehicles. The project has already consumed a huge time than was
expected earlier. According to GM’s officials, the company intends to get to their vision as
quickly as possible. It is because of this GM has increased its testing and validation mileage just
to touch that mission quickly. In collaboration with Lyft, GM will be launching thousands of
self-driving Bolts. However, this collaboration did not last long in favor of GM as the two are no
longer actively into any self-driving projects. Although, GM still has financial investment in its
partnership with Lyft (Businessinsider.in 2020).
GM is now running its autonomous technology with its investment in Cruise. About this
project, GM has plans to hire 700 engineers particularly to take care of autonomous R&D. These
engineers will also be deployed at taking care of GM’s new go-to-market models
(Businessinsider.in 2020).
Points of consideration to lead the change:
There would be few suggestions for GM to help the company effectively take care of its
change objectives. These are as mentioned below:
 Consideration 1

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Connectivity needs to be formed with the insurers. Good connectivity with the insurers is
required to understand more about the risks. Such understanding can help to overcome the
barriers usually there in the automobile loan repayment.
 Consideration 2
This will include additional profile-based data on the driving environment. This data profile can
be used by insurers to investigate an accident case and thus reimburse in the most justified way.
GM must have such precautions in place to ensure they maintain a good relationship with
insurers.
 Consideration 3 and 4
Systems should analyze risky driving practices to reduce the accident occurrence rate. It would
be interesting to see whether autonomous vehicles can also meet with an accident.
 Consideration 5
The bureaucratic leadership in GM has changed over time. The new leadership in the company is
more focussed on quality products. GM has decided to not to rush for the production but the
quality. This change in leadership should help GM pursue many new goals such as the
production of innovative electric autonomous vehicles (Abrahamson 2018).
 Consideration 6
Employee involvement had remained a matter of concern for GM. The company now no longer
offers any retirement benefits or buyout as did in the past. The laid-off employees would still be
eligible for severance pay, support and benefit contributions (Abrahamson 2018). Good thing is
that centralization is no longer a part of GM. It is being replaced with more employee-centric

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culture. Employees are given the freedom to contribute to the company's decision-making
process. These changes should help GM in pursuing its future goal of autonomous vehicles.
 Consideration 7
GM finalized a historic agreement with the UAW to reduce the labor expenses and also scale
back the retiree benefits (Weber 2016). This initiative should help GM in pursuing a cost-cutting
strategy and hence, it would have a better chance to pursue the production of autonomous
vehicles on a large scale.
4.0 – Resistances to Change
Kanter’s theory says that power can be derived from both the formal and informal
resources. The employees of the company should have access to sufficient resources to lead a
change (Business.com 2020). Kanter’s theory will be applied to GM to identify the resistance to
change faced by the company. Hence;
 Resistance 1: Employee Empowerment
GM has traditionally been practicing bureaucratic leadership. Such leadership promotes the
centralization of decision making, thus giving limited or less opportunity for employees to take
part in it. Lack of empowerment in this way affected work morals in employees. Their flexibility
was somehow compromised. While looking at GM’s bureaucracy from the lens of Kanter’s
theory, it can be said that GM struggled to derive power from its employees. When employees
are fully charged and motivated to give their best to work they do not just give their hundred
percent to it but also attempt to exceed the expectation level of the company (Hanaysha 2016).