In early 2014, General Motors (GM) was hit with a crisis of immense magnitude. The company’s new CEO Mary Barra had been in post for just 11 weeks when it was revealed that faulty ignition switches on GM models dating back to 2001 were directly responsible for 13 deaths and 31 crashes. Internal documents from 2005 said there was ‘no business case’ for fixing the problem. Rapidly taking control, Barra publically apologized, declaring she was personally taking the lead on the recall of more than 2 million vehicles. Soon after, following tremendous scrutiny of the company and her actions by the media, she had to withstand two days of aggressive questioning from committees in the U.S. Senate and House of Representatives.
Learning Objective
1) To illustrate the challenges facing a newly-appointed CEO facing a major crisis. 2) To demonstrate the impact of the non-business environment – including government regulation and oversight, the media, and public opinion – on corporate performance. 3) To explore how senior executives approach the classic imperatives to “do the right thing” versus complying with legal requirements. 4) To highlight the upsides and downsides for leaders facing crises early in their tenures in new roles.
Keywords
Transition, Chief Executive Officer, Succession
Settings
Northern America, United States of America
General Motors, Automotive, Automobiles
January to April, 2014
Available Languages
English
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