Why does General Motors exist: why do we have GM, and is there any reason why it should continue? Purporting to provide general objectives and principles of operation, a company’s mission statement often tries to answer the question, “Why does this company exist?” and so I looked for the GM mission statement. I was unable to find one on its web site (possibly incompetence on my part).
I did find a GM mission statement elsewhere but I cannot be sure of its veracity (though it was repeated in at least one other location):
So, what is the difference between the failure of a family-owned hardware store and the failure of GM, other than the scale? In the case of the hardware store, more than just the proprietors will be involved even if there were no other employees (suppliers, customers, the local community, etc). The initial question could be reformulated to ask “Who benefits from GM, and who would lose if GM no longer exists?” We have to wonder whether the “who” is an individual or a group of individuals, and the degree to which individuals or groups benefit or lose.
Only at the level of the family-owned hardware store are the beneficiaries and the losers relatively unambiguous, and the community that benefits from the store’s services more easily demarcated. Though it is much easier to work out why there is/was/should be the small hardware store, than it is to work out why there is/was/should be GM, it very easy to work out why anything that happens to GM is so disruptive.
In the case of GM so much more is involved: for example, who are the proprietors? Anybody who has a diverse portfolio of investment funds probably owns shares in a fund that owns shares in GM. Despite myself, I am probably a very minor proprietor of a company whose actions I dislike. That I am a proprietor of GM does not mean that I have any say how the company operates: for example, I have no say in how the company reimburses its senior managers, even though I cannot understand why they are so well-paid. Neither the mission nor the vision statements mention the CEO, the CFO, the chair of the board, etc, yet the CEO of GM is a crucial and well-recompensed GM employee – a person who represents GM before the US Congress.
Social anthropologists have shown that pre-industrial societies are far more complex than we ever imagined, and we can be sure our industrial societies are just as complex – but often ideologues ignore that complexity in proposals to solve current problems by simplistic solutions such as cutting taxes or just allowing companies to fail. To compare the economics of a complex organization to balancing of household accounts, is to compare the workings of a computer to an abacus.
Organizational complexity is revealed if we look at the list of groups of people affected by any company (often called “stakeholders”) – workers, managers and executives, shareholders, directors, customers, suppliers, distributors, creditors, governments, unions, competitors, nongovernmental organizations, and local and national communities (and there are more).
These groups are not distinct and I, for example, am a member of more than group with conflicting interests (a cyclist who owns a little part of GM, etc).
I did find a GM mission statement elsewhere but I cannot be sure of its veracity (though it was repeated in at least one other location):
General Motors Mission Statement GM is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stock-holders will receive a sustained superior return on their investment.and I found a vision statement:
General Motors Vision Statement GM’s vision is to be the world leader in transportation products and related services. We will earn our customers’ enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people.Many years ago (1908) there were reasons why William C Durant founded the company that has now become become a public supplicant, though it did not take many years before he lost control, regained control, and lost control again. President Dwight Eisenhower wanted Charles Wilson to be his Secretary of Defense and, as Wilson was head of the General Motors Corporation, the vetting process produced some classic lines:
For years I thought what was good for our country was good for General Motors and vice versa. The difference did not exist. Our company is too big. It goes with the welfare of the country.Wilson's first sentence has often been misquoted along the lines “What is good for GM is good for America” but what is more relevant is his assertion that “Our company is too big. It goes with the welfare of the country.” – nowadays, don’t arguments that say that GM is “too big to fail” echo Wilson?
— Charles Wilson to a US Senate committee in January 1953 (New York Times, 24 Feb 1953)
So, what is the difference between the failure of a family-owned hardware store and the failure of GM, other than the scale? In the case of the hardware store, more than just the proprietors will be involved even if there were no other employees (suppliers, customers, the local community, etc). The initial question could be reformulated to ask “Who benefits from GM, and who would lose if GM no longer exists?” We have to wonder whether the “who” is an individual or a group of individuals, and the degree to which individuals or groups benefit or lose.
Only at the level of the family-owned hardware store are the beneficiaries and the losers relatively unambiguous, and the community that benefits from the store’s services more easily demarcated. Though it is much easier to work out why there is/was/should be the small hardware store, than it is to work out why there is/was/should be GM, it very easy to work out why anything that happens to GM is so disruptive.
In the case of GM so much more is involved: for example, who are the proprietors? Anybody who has a diverse portfolio of investment funds probably owns shares in a fund that owns shares in GM. Despite myself, I am probably a very minor proprietor of a company whose actions I dislike. That I am a proprietor of GM does not mean that I have any say how the company operates: for example, I have no say in how the company reimburses its senior managers, even though I cannot understand why they are so well-paid. Neither the mission nor the vision statements mention the CEO, the CFO, the chair of the board, etc, yet the CEO of GM is a crucial and well-recompensed GM employee – a person who represents GM before the US Congress.
Social anthropologists have shown that pre-industrial societies are far more complex than we ever imagined, and we can be sure our industrial societies are just as complex – but often ideologues ignore that complexity in proposals to solve current problems by simplistic solutions such as cutting taxes or just allowing companies to fail. To compare the economics of a complex organization to balancing of household accounts, is to compare the workings of a computer to an abacus.
Organizational complexity is revealed if we look at the list of groups of people affected by any company (often called “stakeholders”) – workers, managers and executives, shareholders, directors, customers, suppliers, distributors, creditors, governments, unions, competitors, nongovernmental organizations, and local and national communities (and there are more).
These groups are not distinct and I, for example, am a member of more than group with conflicting interests (a cyclist who owns a little part of GM, etc).
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