An analysis and explanation of the failure of General Motors on the basis of the theoretical framework of path dependency in the field of Crisis Management

Essay , 2010 , 28 Pages , Grade: 1,3

Business economics - Business Management, Corporate Governance

The difficulty lies, not with the new ideas, but in escaping the old ones.
John Maynard Keynes

This essay explores with the theory of path dependence why some organizations stick to in the long run loss-generating strategies and why do some companies miss to develop new strategies to adapt to changing market conditions. Path dependence can be defined as a dynamic theory assuming that initial events can increasingly restrain present and future choices. Due to the current market situation this essay will connect the theoretical considera-tions of path dependency with the crisis management. On the basis of the main literature and with applying the theoretical model of Burgelman it will be examined in how far does the model of path dependency explain the failure of the insolvent automobile manufacturer Gen-eral Motors. In this regard some limitations of the Burgelman-model were discovered.

Table of Contents

List of Figures

List of Abbreviations

Abstract

1 Introduction
1.1 Problem outline and objective
1.2 Course of work

2 Theoretical Background
2.1 Crisis Management
2.2 The strategic process as aperiodicity: induced vs. autonomous strategic action
2.3 Path dependency and the basic concept of strategic paths

3 Strategic Consequences of co-evolutionary Lock-In
3.1 The application of Burgelman’s insights on the example of General Motors
3.2 Recommended Procedures for GM

4 Critical Reflection
4.1 Critical reflection of the path dependence theory
4.2 Limitations of Burgelman and recommendations

5 Conclusion

Appendix
1 Development of the oil-price
2 Development of the petrol price
3 Development of the Share Price of General Motors during the crisis
4 Number of Insolvencies from 1999 until 2009
5 More detailed explanation of path dependency
6 Reasons of GM´s failure

References

• College: Leuphana Universität Lüneburg (Institute for Business Development and Innovation Management)
• Course: Management of Change
• Grade: 1,3
• Author: Susann Carmohn (Author)
• Publication Year: 2010
• Pages: 28
• Catalog Number: V151790
• ISBN (eBook): 9783640655373
• ISBN (Book): 9783640656233
• Language: English
• Tags: Change Management, Path Dependency, Strategic Paths, Crisis Management, General Motors, Lock-In