( DONT EXTEND The RESEARCH IN THIS CASE.)

Mr. William Durant founded General Motors in 1908. He soon ran the company into heavy debt and was fired by his creditors in his eagerness to establish a prominent car manufacturing plant to compete with Ford. Alfred Sloan, a new CEO, took over in 1923. His meticulous attention to detail, as an engineer, contributed to the revolutionization of the automobile industry. He was in charge until 1946. Create five separate brands and five price ranges for five different types of consumers, he said, urging market segmentation: a car for every purse and purpose. Buick, Chevrolet, Pontiac, Oldsmobile, and Cadillac became GM's flagship brands, outperforming Ford's less expensive, smaller vehicles. Sloan popularised the idea of automotive repairs on a regular basis, instilling in buyers the practise of purchasing and repairing cars every few years. From 1931 to 2007, GM dominated global vehicle sales for 77 years.

Sloan's leadership style, on the other hand, began to fade as GM's dominance of the industry waned. Internal fiefdoms, immense inefficiencies, and a competitive, dysfunctional atmosphere between divisions and with the Worker's Unions had resulted from his management. Employee costs were nearly crippling GM's formally robust budget at one point, as labour rates were nearly double what Toyota paid their employees, and when combined with unsustainable insurance and retirement packages, employee costs were nearly crippling the company's formally robust budget. For 67 days, a 400 000-strong workers' strike shut down the factories. However, senior management appeared unresponsive to concerns and suggestions. They worked behind closed doors, with no knowledge of the needs of their staff or clients. The unions were paid off, and anyone who was laid off received up to 95% of their daily salary.

GM's inability (or unwillingness) to recognise and react to global forces for change, especially after WWII, was a product of this classical management style. World oil prices started to rise in the late 1970s. Heavy, gas-guzzling vehicles were being phased out around the world in favour of smaller, more fuel-efficient vehicles. BMX and Lexus are now synonymous with money, luxury, and class. GM discovered they had lost their magic touch in their attempts to react with smaller, more fashionable, and fuel-efficient vehicles.

By 2001, GM's profits were on the decline. Toyota was leading the way with cars that were elegant, powerful, and cost effective, while GM was experiencing rising debt levels and was on the verge of bankruptcy amid major government loan initiatives. GM had a debt of $30.9 billion at its height.

By 2003, as GM was on the verge of bankruptcy, a new CEO, Rick Wagoner, was named to lead the company. Wagoner, a reserved guy, spent the next six years working closely with his leadership team to oversee the company's drastic changes. He didn't give orders; instead, he used persuasion and advice to bring up problems, ask questions, and find answers. To back up his claims, he insisted on truth and common sense. He took a collaborative rather than a commanding style. His demeanour has been characterised as calm, as he considers all points of view before making sound decisions. In his management style, he characterised himself as "collaborative and accessible," and he always "tried to listen to and relate to everyone at every stage." He understood the value of education, which contributed to his incessant questioning when finding solutions. He would only keep asking questions until consensus was found, or a new solution emerged, his coworkers said.

Wagoner started by eliminating the automotive product board, which had been found to stifle decision-making at the very top of the corporate ladder. This set the stage for a change in the company's culture. GM's management hierarchy was gradually restructured, resulting in a more lateral management style with less top-down authority and higher employee satisfaction. His team focused on improving employee efficiency and holding divisions accountable for their effectiveness and budgets. This included selling off less common vehicle lines and refocusing on the company's flagships, which would now recognise and meet consumer needs.

Negotiations with unions were part of the reforms that resulted, and the workforce was eventually reduced to less than half of what it had been. GM progressively closed the gaps in quality, fuel efficiency, and productivity levels in terms of auto quality and competition. In China, GM created a highly lucrative division, which they saw as a potential insatiable small-car market. The atmosphere at GM started to shift as improvements to organisational systems and process efficiencies were scrutinised. Operating expenses had been cut by $15 billion by 2009, and revenue had increased. The enormous debts accrued as a result of government loans were eventually repaid, and GM began to reclaim its prestigious role in the global automobile manufacturing industry

How a transactional leaders approach :

could have or should have or did respond in order to manage the situation. Link leadership and management and change management theories and principles to justify / further support your argument.