Learning through alliances: General Motors and NUMMI

Learning through alliances: General Motors and NUMMI

Learning through alliances: General Motors and NUMMI

Inkpen A.C.California Management Review, (USA), Summer 2005, Vol. 47 No. 4, Start page: 114, No. of Pages: 23

Purpose – To describe how General Motors has exploited the learning opportunity created by NUMMI, its California-based alliance with Toyota, to improve its quality and productivity. Design/methodology/approach – Asks why so many firms appear unable to exploit alliance learning opportunities. Discusses problems associated with causal ambiguity; leadership commitment; the cost of learning; individual managers’ difficulties in sharing learning on re-entry into the parent organization; and “not invented here” syndrome. Outlines the negotiation and formation of the NUMMI alliance in the early 1980s, as an equity joint venture to assemble small cars in the USA. Discusses its learning impact and the learning trigger for General Motors (GM). Comments on GM’s initial struggles with learning and describes the learning systems that eventually emerged following the appointment of Jack Smith as CEO of GM in 1992. States that Smith headed the negotiating team when NUMMI was formed, appreciated the extent of the learning opportunity and utilized learning from NUMMI in the establishment of greenfield plants using lean manufacturing techniques. Describes the key mechanisms that supported learning and knowledge transfer and provides a brief case study of change at the Orion assembly plant, described as a “brownfield” plant. Identifies factors that facilitated effective learning and lists the actions GM took to overcome learning obstacles. Practical implications – Concludes with a discussion of six lessons that other firms can draw from GM’s experience with NUMMI. Originality/value – Shows how companies can exploit learning and knowledge transfer opportunities resulting from their strategic alliances.Style: Case studyISSN: 0008-1256Reference: 34AT359

Keywords: Lean production, Learning, Organizational effectiveness, Strategic alliances