Annotated Bibliography: GM's Strategies and Market Performance

This annotated bibliography provides a detailed analysis of General Motors (GM) through a selection of academic articles. It examines GM's challenges and strategic responses, including liquidity risk during the 2005 downgrade, the impact of the 2008-2009 recession, and the factors contributing to its market share decline between 1980 and 2009. The bibliography also explores GM's initiatives in electric vehicle development and sustainable innovation, highlighting the opportunities and incentives for the company. The sources cover various aspects of GM's business, from financial risks to management practices and innovation strategies, offering a comprehensive overview of the company's performance and evolution in the automotive industry. The bibliography aims to provide valuable insights into the company's past strategies and future prospects, providing a useful resource for anyone studying the automotive industry and business development.

Running head: ANNOTATED BIBLIOGRAPHY
ANNOTATED BIBLIOGRAPHY

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Acharya, V. V., Schaefer, S., & Zhang, Y. (2015). Liquidity risk and correlation risk: A
clinical study of the General Motors and Ford Downgrade of May 2005. The Quarterly
Journal of Finance, 5(02), 1550006.
General Motors and Ford, two of the major players in the US automobile industry, downgraded
in 2005. The issue faced by these two organizations became so intense in May, 2005, that both of
the organizations had to sell-off their corporate shares. As stated by the authors in this article ,
the sell-off caused impacted the economy severely, by creating the liquidity risk for the market
makers. In the article, the authors discuss how the trading volume of these two organizations
changed after the downgrade. According to the authors, GM increased its trading volume in
March and may. The trading volume of GM increased further just after it got the junk status,
during the period May 5 to May 11, 2005. However, using the data, the authors have showed that
the trading was one sided only. On basis of it, they reached the conclusion that neither high
volume nor turnover at the time of downgrade can help the organization to control the liquidity
risk.
Goolsbee, A. D., & Krueger, A. B. (2015). A retrospective look at rescuing and
restructuring general motors and chrysler. Journal of Economic Perspectives, 29(2), 3-24.
In 2008-2009, during the recession, the Obama Administration took a major decision of
supporting the automobile industry to regain its growth. Two large players of the US automobile
industry, General Motors and Chrysler were specially benefitted by this decision as there two
organizations as at that time, both of them were experiencing the huge amount of loss. However,
after the decision was implemented, both the organizations managed to get rid of their problems
and after few years, these businesses started being healthy again. The article describes the
incidents that caused the failure of three major players in the automobile industry, especially
General Motors as it had experienced the largest loss. According to the authors, in 2000s, the
auto credit and population to auto ratio inflated although the rate of inflation was not sustainable.
During the recession period, the auto credit inflation rates reduced and as a result, demand for the
vehicles also reduced. The higher cost of the vehicles added to the problem. In addition, the
management of the organization considered that the recession would not have any significant
effect on the business. The lack of effort from the managers also caused the failure.

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Helper, S., & Henderson, R. (2014). Management practices, relational contracts, and the
decline of General Motors. Journal of Economic Perspectives, 28(1), 49-72.
The article focuses on identifying the reasons behind the rapid decline in the market share of
General Motors during the period 1980 and 2009, although the organization once was considered
one of the best managed companies. Conventionally, it is considered that involving the high
legacy labor and huge investment on the healthcare costs led the firm to failure. However, the
authors of this article consider that the explanation does not reveal the actual situation. In the
article, it is argued that General Motors actually failed to understand the nature of competition it
is facing in the market. As a result, they could not respond to it effectively. It reduced
competitiveness of the organization in the market. In addition, General Motors also focused on
dividing the workforce in such way so that there remains very limited chance of knowledge
overlapping. It a restricted the workforce from knowledge going which is crucial for remaining
competitive in the market. So, it can be stated that poor human resource management is another
factor that caused failure of General Motors.
Wesseling, J. H., Niesten, E. M. M. I., Faber, J., & Hekkert, M. P. (2015). Business
strategies of incumbents in the market for electric vehicles: Opportunities and incentives
for sustainable innovation. Business Strategy and the Environment, 24(6), 518-531.
The article describes the importance of launching innovative vehicle in the automobile industry
and what opportunities an organization obtains fro developing the environment friendly
innovative works. The authors in the article also showed how the major organizations in the
automobile industry including General Motors gave importance on innovative and environment-
friendly product development and how it impacted their financial performance. On basis of the
data related to electric vehicles during the period 1990-2011 , the authors have shown that
several large organizations started rethinking over their strategies to create electrical vehicles.
General Motors was one of the businesses which put significant effort on development of such
vehicles . However, not all organizations obtained equal success for their strategies. As per the
researchers, although General Motors had earned little incentives from its effort on the project,
but it obtained lots of opportunities to exploit. The authors concluded that the findings of the
study can provide the organization with a pathway to enhance its competitiveness in future also.

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