An analysis and explanation of the failure of General Motors on the basis of the theoretical framework of path dependency in the field of Crisis Management

Essay from the year 2010 in the subject Business economics - Business Management, Corporate Governance, grade: 1,3, Leuphana Universität Lüneburg (Institute for Business Development and Innovation Management), course: Management of Change, language: English, abstract: The difficulty lies, not with the new ideas, but in escaping the old ones.

John Maynard Keynes

This essay explores with the theory of path dependence why some organizations stick to in the long run loss-generating strategies and why do some companies miss to develop new strategies to adapt to changing market conditions. Path dependence can be defined as a dynamic theory assuming that initial events can increasingly restrain present and future choices. Due to the current market situation this essay will connect the theoretical considera-tions of path dependency with the crisis management. On the basis of the main literature and with applying the theoretical model of Burgelman it will be examined in how far does the model of path dependency explain the failure of the insolvent automobile manufacturer Gen-eral Motors. In this regard some limitations of the Burgelman-model were discovered.