General Motors Research Paper Example | Topics and Well Written Essays - 500 words - 2

General Motors - Research Paper Example companies trailed voluntary petitions for assistance under Title 11 of the United States of Bankruptcy code as per Chapter 11 reorganization (United States Environmental Protection Agency, 2010). In this scenario GM, had filed a motion to gain approval by the Bankruptcy court, which led to the creation of NGMCO, Inc. However, after the purchase of â€Å"Old GM† by NGMCO, it was again renamed as General Motor Company. This evolution of new operations advocated in favor of the fact that the bankruptcy conversion was guided by the concept of â€Å"pre-packaged† Chapter 11 reorganization (Stoll & Terlep, 2009). GM’s filing for bankruptcy in 2009 indeed marked one of the darkest falls in the automobile history. Although the turn of events that led to GM’s bankruptcy had been predictive, critics were of the view that the sole reasons for the automobile giant’s fall was hidden in its managerial faults as well as sudden upsurge of the global economic downturn. As mentioned in The Economists (2009), â€Å"The collapse of General Motors into bankruptcy is only the latest chapter in a long story of mismanagement and decline†. According to the reports, there were various reasons behind the bankruptcy of GM. One of the major reasons of the bankruptcy was argued to be its mismanagement of finances and poor liquidity structure. Critics also argued that ineffective forecast of the external business environment affected the efficiency of the company in the global market, where its stagnancy in brand exposure also hampered its long run sustainability. In addition, the company also failed in taking requisite measures to file for bankruptcy, which affected its stakeholders’ interests to a substantial extent (Carty, 2009). Most effective course of action to solve the problem. As can be observed from the above context, the primary problem inherent to GM’s failure was related to its managerial deficiencies. In this regard, application of the cognitive theory could have been