Managerial Decisions There Are Many Essay

Open, View, and/or
Download this Document

Total Length: 753 words ( 3 double-spaced pages)

Total Sources: 2

Page 1 of 3

(Note -- GM lost money in a lot of years). Saturn did not benefit from this, and had to cover all of its own costs, which never really happened because it was broken up right at the point when its popularity was becoming a threat to the entrenched interests within GM and the UAW -- the latter incensed that Saturn workers had rejected its contract. Once the production was moved around, Saturn became just another GM brand, and this did not have cachet in the marketplace. The Saturn brand no longer stood for anything and the cars were not as good. Overall, consumer interest in the brand declined.

I do not feel that escalation of commitment was a defining factor in GM's decision to continue with Saturn. By the 2000s, Saturn no longer had its own manufacturing facility, so those fixed costs were not weighing on the minds of GM managers. Some money had been invested in the brand, but internally GM was in disarray. It also held on to Pontiac and Hummer long past the point where they were unprofitable.

Stuck Writing Your "Managerial Decisions There Are Many" Essay?

View All Our Example Managerial Decisions There Are Many Essay

Have A Custom Example Essay Written

But there is microeconomic logic to this. The decision making process would likely have involved the costs associated with unwinding the brand, and the reality that unwinding Saturn was going to cost a fair bit of money. When exit costs are higher than the losses incurred by keeping the business, even an unprofitable business will be kept running as long as marginal profit covers marginal cost. Remember that Saturn represented capacity utilization at GM's plants -- the cost of closing out a plant might have been too high given union contracts and the costs associated with mothballing a giant manufacturing facility. Thus, GM might have actually made a rational economic decision keeping Saturn open as long as it did. Or, of course, it might have just been stubborn the way it has been with a few of its dog brands -- either way it wasn't so much escalation of commitment because no escalation was being required of GM through this period......

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Managerial Decisions There Are Many" (2014, May 02) Retrieved May 18, 2025, from
https://www.aceyourpaper.com/essays/managerial-decisions-188797

Latest MLA Format (8th edition)

Copy Reference
"Managerial Decisions There Are Many" 02 May 2014. Web.18 May. 2025. <
https://www.aceyourpaper.com/essays/managerial-decisions-188797>

Latest Chicago Format (16th edition)

Copy Reference
"Managerial Decisions There Are Many", 02 May 2014, Accessed.18 May. 2025,
https://www.aceyourpaper.com/essays/managerial-decisions-188797
   

Open, View, and/or
Download this Document
order custom essay example