Medical Approach - the Rise and Fall of the Chevrolet Corvair

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Recommendations for their resolutions

Do nothing

One option is always to do nothing but then the outcome will always remain the same. In the case of the Corvair, doing nothing to solve the problems that the company was facing would have lead to a cancelled production as it did in 1969. The only short term “advantage” in this choice of solution is that the cost of production would remain the same and they would not have to spend more money than they were doing. In form of long-term aspects the story of the Corvair would end the same because of the continuously bad decision-making.

Create a Hierarchical Chain of Command

As it was seen in this case, most of the very important decisions were controlled and made by Ed Cole. One sole individual should not make important decisions that may affect the company’s gross margin or reputation. A chain of people that come together and decide on which step should be taken next is usually more effective.

To create a hierarchical chain of command affects the morale of the supervisors and managers. It creates an atmosphere of certainty and orderliness in the company; shapes the way managers and supervisors behave and minimize the room for anarchical behavior. An established chain of command also creates efficiency when making decisions, solving problems etc. within the company. The hierarchical structure in the company brings space to the opinions and ideas of lower lever employees. Suggestions and complaints are not only received and answered by one leader. This way an incompetent supervisor can be easier recognized and dealt with, e.g. in this case Ed Cole. The hierarchical chain of command also has its down sides. When a company has a very long chain of command, communication can take too long to travel through all the levels. These communication problems can slow down the decision-making process. There is also the risk of organizational disunity can appearing within departments. When specializations are departmentalized, it can lead to decisions being made department-specific to benefit just one department rather than the organization as a whole. Also, a long chain of command can dull a company's ability to react and change. The ability to react quickly to opportunities, threats and problems helps a business to maximize profits.

Fix and improve the car

Even though the main issue of the car, its tendency to flip over, was already fixed, the car still suffers from its reputation of being unsafe and consumers still distrust its efficiencies. The former reputation should be counteracted with fixing and improving the car even more and turning it to an all around high quality product.

This is a similar situation that Mercedes Benz faced with its A-class model. The car failed in security tests in the first place, but to safe the brands reputation Mercedes fixed not only the main problems but also developed it to a much better car with high quality features, while still keeping the sales price in a low category as promised. This was a way to “make up” for the mistake they had made in the first place for the car to be unsafe. As GM is now facing the similar issue, this solution is to be thought of.

Providing a high quality car will bring positive visibility in the media when the car is tested which will help GM to gain back the lost trust of its consumers. When it is tested and reported to be not only efficient and safe but high quality for a low price its popularity will most likely raise and the sales will go back up. It will also indicate that GM offers high quality cars and cares for good products and their customer’s safety, which will raise a new good reputation towards the company. Correcting the faults of the car will bring GM extra costs and raise the sales price of the car but it will also make the car more stable and trustable in the consumer’s sight. Negative publicity and consumer’s distrust can lead to huge losses in sales, which will cost GM at the end more than the investment into the modification. This solution will cost GM in money and effort but will gain in consumer’s trust and company’s reputation.

Facing the media

Considering that the situation of GM’s reputation at this point is very delicate and the media monitors the actions of GM, the further steps of GM should be well considered and least risky. GM can face the media forthright, admit its mistakes and apologize publicly. By admitting their mistakes openly it is most likely that GM will gain some sympathy of the public back. GM should apologize and promise to show serious efforts to correct the earlier mistakes and faults on the car. It can also help to put active steps publicly to prove sincerity and true care for the correction of mistakes. To put the matter openly in publicity GM can avoid more suspicion towards this matter and help them selves to start gaining some trust back from the audience and its customers. The down side to this solution is that the appearance in the media will also bring attention to the negative criticism towards the company. Also, too much attempt may seem dishonest or trying too hard and can be taken as unsympathetic by the audience who already has a bad opinion about the company.

Best solution

According to us, the best solution for the Chevrolet Corvair would be to create a hierarchical chain of command. Adjusting the management would lead to better decision-making, such as listening to the subordinate’s suggestions/warnings about constructing a safer Corvair. A safer car would lead to fewer accidents and therefore no lawsuits, a better brand and company recognition/reputation and a profitable production. Through this sole solution we believe that the remaining solutions will follow and that all the problems will be solved. Management is the heart of any company and when it is lead the correct way, it opens doors for long-term success.