Sociologists Martha Crowley and Randy Hodson conducted a study of the organisational dysfunction at General Motors. In a climate where people feared job cuts, every layer of management was afraid to report problems upwards, as there were many examples of people who had been fired after raising issues. Their case study of this company has broader implications, as the conditions and attitudes they examined are not unique to General Motors.
Instead, the research shows how a focus on “short term profit can become a strategy of long-term decline.”
The researchers trace design flaws in Chevrolet, Pontiac and Saturn models back to poor management culture. The research uses a critique of neoliberalism to show how a culture of self-preservation stopped management from implementing stronger policies to better mange accountability, communication and problem-solving.
In similar research, one supervisor says: “With management, they don’t have the security that we have….So everybody’s a little bit afraid [for] their jobs. So if you have a problem, you complain to your foreman; he tries to take care of it without bringing it to his general foreman; or the general foreman, he don’t want to bring it to his superintendent, because neither of them can control it. So they all try to keep it down, low level and under the rug, and [they say,] ‘Don’t bother me about it – just fix it and let it slide.'”
In Crowley and Hodson’s work, workers were unwilling to take-on the risks of exposing problems. This arises from a broader social pattern in big companies, where there is a lack of public trust in big businesses to act ethically. The onus on team work is predicated on avoiding conflict that might derail individual careers. In other words, workers do not feel confident that exposing problems will be managed in a thoughtful way and that they will be instead punished for their honesty.
Crowley and Hodson find supervisors are silent about problems that come to their awareness. This is encouraged by company policies based on neoliberal ideology, which put profit above ethics. Bonuses rewarding “high-performers” promote the idea that success is an individual achievement. This encourages competition, not in the true spirit of team work and a collective culture.
Executives should be mindful of how incentives can lead to abuse or a negative organisational culture. Organisational procesess that soley reward individuals do not provide an incentive for individuals to point out flaws without fear of retribution. Crowley writes that sociological knowledge can be used to create a corporate culture of transparency, to end toxic management practices.
“Sociologists have shown how a focus on short-term profit can become a strategy of long-term decline, while jeopardising health and well-being of employees and even consumers. Furthermore, organisational barriers to communication and problem-solving penetrate deeply into organisations and stretch far beyond the bounds of General Motors.“