Failure like this doesn’t come out of nowhere. It’s buried in a company’s corporate culture. This year, two professors examined what it is, about GM, that set it up for failure.
The General Motors market share in the US fell from 62.6% to 19.8% between 1980 and 2009, noticed Susan Helper and Rebecca Henderson. Helper is now the chief economist at the US commerce department, and Henderson is a management professor at Harvard.
They concluded that “the conventional explanations for GM’s decline are seriously incomplete”. Their alternatives: GM’s market share suffered from the same issues as its old rivals, “including a failure to understand the nature of the competition they faced and an inability to respond effectively once they did.”
But the professors found another, crucial reason for GM’s decline: hubris.
We wanted to believe in that, too.