OPPapers.com

A Systems Perspective On The Death Of A Car Company

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0144-3577.htm

IJOPM

28,6

Received 19 June 2007

Revised 3 February 2008

Accepted 19 February 2008

International Journal of Operations &

Production Management

Vol. 28 No. 6, 2008

pp. 562-583

q

Emerald Group Publishing Limited

DOI 10.1108/01443570810875368

A

systems

perspective

on

the

death

of

a

car

company

Nick Oliver

University of Edinburgh Business School, University of Edinburgh,

Edinburgh, UK

Matthias Holweg

Judge Business School, University of Cambridge, Cambridge, UK, and

Mike Carver

Oxford, UK

Abstract

Purpose

– The aim of this paper is to understand how large and apparently successful organizations

enter spirals of decline that are very difficult to reverse. The paper examines the case of Rover, once

one of the largest car producers in the world, which collapsed in 2005. An analysis of strategic and

operational choices made over a period of 40 years investigates the reasons for, and consequences of, a

growing mismatch between the context faced by the company (industry dynamics, market conditions)

and its operational capabilities, a mismatch that ultimately brought about the company’s demise.

Design/methodology/approach

– The paper is based on interviews with 32 people, including

senior managers (including four chief executives), government ministers and union officials who were

key decision makers within, or close to, the company during the period 1968 and 2005. Secondary

sources and documentary evidence (e.g. production and sales data) are used to build up a historical

picture of the company and to depict its deteriorating financial and market position from 1968

onwards.

Findings

– The company was formed from a multitude of previously independent firms as part of a

government-sponsored agenda to build a UK National Champion...