Chevy Volt Case and Decision-Making
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1. What does the Chevy Volt case tell you about the nature of strategic decision-making at a large complex organization like GM?
2. What trends in the external environment favored the pursuit of the Chevy Volt project?
3. What impediments to pursuing this project do you think existed within GM?
4. The plan for the Chevy Volt seems to be based partly on the assumption that oil prices would remain high, and yet in late 2008, oil prices collapsed in the wake of a sharp global economic slowdown.
a. What does this tell you about the nature of strategic plans?
b. What do falling oil prices mean for the potential success of the Chevy Volt?
c. Do you think oil prices will remain low?
5. What will it take for the Chevy Volt to be a successful car? How risky do you think this venture is for GM? What are the costs of failure? What are the costs of not pursuing the project?
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Solution Summary
This detailed solution is based on the Chevy Volt case. It discusses strategic decision making at large corporations, like GM; the trends in the external environment that favored the pursuit of the Chevy Volt project, the impediments to pursuing this project at GM, and the effect of the economic slowdown. It also discusses what this case tells one about the nature of strategic plans, as well as discussing oil prices. Finally, it discusses what it will take for the Chevy Volt to be a successful car and the risks for GM, as well as the costs involved. It includes examples and is rich in references.
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1. What does the Chevy Volt case tell you about the nature of strategic decision-making at a large complex organization like GM?
The Chevy Volt case shows the process of strategic decision making at a large complex organization like GM. Even though the Volt was the "brainchild of ...GM's vice chairman and ....the head of R & D and strategic planning" the car was not automatically brought to market. Instead, market conditions were needed to present a need for the concept, in this case, higher priced gasoline and tighter regulations to limit carbon emissions. Plus, manufacturing conditions were favorable for the concept; in this case the cost of manufacturing lithium ion batteries was falling. Finally, competitors were making changes in their product (Toyota/Prius) showing a need for a change in strategy. In addition to these factors, it was important to convince other management members and adjust prior strategy conditions (having already invested billions in developing fuel cells). Furthermore, the company was concerned about a large public failure. It was actually the above factors tipped by a start-up company that finally incited GM to act upon building the Volt. Within a large, complex organization there are many departments to consider as well as a history of activity and a concern for future, continued success. This can at times cause slower progress.
2. What trends in the external ...
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