...Globalization at General Electric Case Directions: Develop a detailed corporate profile and address the questions in the case. General Electric, the company that Thomas Edison founded, and now the largest industrial conglomerate, in America produces a wide array of goods and services, from medical equipment, power generators, jet engines, and home appliances, to financial services and even television broadcasting (GE owns NBC, one of America’s big three network broadcasters). This giant company with revenues close to $180 billion is no stranger to international business. GE has been operating and selling overseas for decades. During the tenure of the legendary CEO Jack Welch, GE’s main goal was to number 1 or 2 globally in every business in which it participated. To further this goal, Welch sanctioned an aggressive and often opportunistic foreign direct investment strategy. GE took advantage of economic weakness in Europe from 1989 to 1995 to invest $17.5 billion in the region, half of which was used to acquire some 50 companies. When the Mexican peso collapsed in value in 1995, GE took advantage of the economic uncertainty to purchase companies throughout Latin America. And when Asia slipped into a major economic crisis in 1997-1998 due to turmoil in the Asian currency markets, Welch urges his managers to view it as a buying opportunity. In Japan alone, the company spent $15 billion on acquisition in just six months. As a result, by the end of Welch’s tenure in 2001, GE...
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...Electric (GE) was founded by Thomas Edison in 1890 (GE, 2009). The company was established as the Edison General Electric Company and was a conglomeration of Thomas Edison’s many businesses (GE, 2009). In 1892 the Edison General Electric company merged with competitor Thomson-Houston Corporation and changed the name of the company to General Electric (GE, 2009). Today GE employs more than 323,000 individuals around the world (GE, 2009). GE is a leading company with a diverse product line including lighting, industrial products, medical equipment, transportation, and power transmission (GE, 2009). These products were all a part of the original company foundation created by Thomas Edison (GE, 2009). GEs structure and success have led to several recognitions in the business industry. In 2009 GE improved its ranking on the Fortune 500 list from sixth to fifth (CNN Money, 2009). GE was also ranked as number one on the 2010 Forbes Most Sustainable Companies and Most Admired Companies (Coster, 2010). The success and recognition is a sign of strong management, leadership skills and commitment. Through the years GE has had a number of leaders who have built a strong company with a combination of diverse products (GE, 2009). The initiatives driven by these leaders have led to growth, reeducation in cost, controllerships that allow the company to capitalize on opportunities, financial strength and common values that allow the company to face environmental changes with confidence (GE, 2009)...
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...improve GE’s ability to compete in global economy? Does such outsourcing harm or benefit the American economy? Firstly, the strategy that GE used to enter Indian market is that it made a joint venture with Wipro to establish Wipro GE Medical System. It’s a smart step of GE to have entry into new countries in the developing region and specifically the market which had the second largest population in the world. A joint venture entails establishing a firm that is jointly owned by two or more otherwise independent firm. It’s also a strategy to enter a new market, excluding acquisition, merger, Greenfield investment… Why did GE choose this strategy? GE can receive benefits from a local partner’s knowledge of the host country’s competitive conditions, culture, language, political systems and business systems. While GE provided technological know-how, the local partner – Wipro provide marketing expertise and the local knowledge necessary for competing in India. Moreover, GE could share their costs or risks with Wipro. GE did not need new facilities, bureaucracy fee to establish new firm in India but saving their cost to continue using land, labor, energy and available customers in India which was property of Wipro. And GE faced a low-risk of being subject to nationalization of other forms of adverse government interference. Secondly, GE can utilize maximum human resources in India. India had a cheap source of talented engineers and programmers. There, it has a technology-oriented...
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...the world is turbulent, you appreciate great people.” – Jeff Immelt, GE Chairman and CEO Internal and External factors play a great part in the four functions of management. These factors can impact these four functions in many ways. The company that we chose to write about is General Electric known as GE. We will explain how internal and external factors affect the four function of management, which are; planning, organizing, leading, and controlling (Bateman & Snell,2009). We will also explain how these factors, along with delegation, affect globalization, technology, innovation, diversity, and ethics. General Electric was founded in 1892 by Thomas Edison, Charles Coffin, Edwin Houston, and Elihu Thomson. These four men had an idea of bringing “good things to light.” GE is an advanced technology, services, and finance company taking on the world's toughest challenges they are dedicated to innovation in energy, health, transportation, and infrastructure (GE, 2011). The major planning for General Electric is their Marketing Plan. GE's marketing function is about delivering superior business impact and results. We rigorously focus on customers; measure and assign accountability; attract, develop, and retain best-in-class talent, and methodically align our work against evolving business strategies (GE, 2011). One of the most important aspects of planning is forecasting what will be needed in that year. GE is leaning toward solar power. They are in the planning stages but this...
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...the world is turbulent, you appreciate great people.” – Jeff Immelt, GE Chairman and CEO Internal and External factors play a great part in the four functions of management. These factors can impact these four functions in many ways. The company that we chose to write about is General Electric known as GE. We will explain how internal and external factors affect the four function of management, which are; planning, organizing, leading, and controlling (Bateman & Snell,2009). We will also explain how these factors, along with delegation, affect globalization, technology, innovation, diversity, and ethics. General Electric was founded in 1892 by Thomas Edison, Charles Coffin, Edwin Houston, and Elihu Thomson. These four men had an idea of bringing “good things to light.” GE is an advanced technology, services, and finance company taking on the world's toughest challenges they are dedicated to innovation in energy, health, transportation, and infrastructure (GE, 2011). The major planning for General Electric is their Marketing Plan. GE's marketing function is about delivering superior business impact and results. We rigorously focus on customers; measure and assign accountability; attract, develop, and retain best-in-class talent, and methodically align our work against evolving business strategies (GE, 2011). One of the most important aspects of planning is forecasting what will be needed in that year. GE is leaning toward solar power. They are in the planning stages but this...
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...chairman of GE on September 7, 2001. Analyze the external environment since this time, and the effect these changes have had on GE. On 7 September, 2001 Jeff Immelt took charge of one of the biggest firm in the world, he has not had an easy time managing the company. A lot of trouble of managing GE came from their external environment. Political 4 days after he took power, the bombing of world trade center marked his first major disaster in which he held no control over. This unforeseen terrorist attack has caused GE to lose more than 600 million for insuring the attacked World Trade Centre building. This incident also decreases their company rating to “AA”. Economic Another external factor which affected the US based company was their poor economic situation. Economic fluctuations in interest rates, exchange rates and money value greatly affect activities of GE. A great example happened was the financial crisis in 2008. Social-Cultural The culture in a particular country determines the different employment policies, working hours, holidays and the type of goods to be produced. GE had to deal with such issues effectively. In a different country, the inflation may provoke higher wage demand from employees and can raise the cost. Technological Innovation has always been a GE’s motto as a way to move forward. However products are always being introduced using more advanced technology each day. With the pace of GE’s technology advancement, GE had faced major...
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...manufacturing sweatshop in China Boyao Zhang R/W Grad VI University of Delaware English Language Institute May 29th, 2016 A Case Study Analysis of Foxconn: Perspective of a manufacturing sweatshop in China An irreversible trend of economic globalization presents opportunities and challenges in China. Overall, foreign direct investment (FDI) and open trade, two major elements of commercial globalization, have played a crucial role in the international business market in the last thirty years (Lessmann, 2013). To avoid shortcomings, numerous developed countries have established their manufacturing industries in developing countries. Due to the advantages of lower labor cost and abundant resources, China has become the first choice of international manufacturing processing enterprises; therefore, as far as China's economy is concerned, the manufacturing processing industry is a vital element of national income and a crucial part of China's economic structure (Chan, 2013). Nevertheless, although it is indisputable that FDI and open trade have positive effects on the Chinese economy and the development of technology, in recent years, Chinese economic and environmental issues are undeniably caused by economic globalization. (Chen & Ge, 2010; Lessmann, 2013). Foxconn, a representative company of manufacturing industry in China, is a beneficiary and victim of FDI and open trade (Guo, 2012). This case analyzes the labor and the environmental issue of Foxconn caused by FDI and...
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... Exercise 15.2: External Financial Reports and Globalization. a. The Headquarters of General Electric Company is in Fairfield, CT United States and operates in more than 170 countries around the world. b. The proportion of total sales represented by foreign sales is about $80 billion of revenue outside the Unites States. The changes of sale over the past five-years have shown increases 3 out 5 years. The other 2 years were slightly below the company’s goal due to the price of oil dropping and exports issue. c. They signed an agreement to sell their consumer finance business in Hungary (Budapest Bank) to Hungary’s government. On June 2, 2014, we acquired Cameron’s Reciprocating Compression division for $0.6 billion. The division provides reciprocating compression equipment and aftermarket services for oil and gas production, gas processing, gas distribution and independent power industries d. There are three categories GE uses hedging practices. FAIR VALUE HEDGES GE use interest rate and currency exchange derivatives to hedge the fair value effects of interest rate and currency exchange rate changes on local and non-functional currency denominated fixed-rate debt. For relationships designated as fair value hedges, changes in fair value of the derivatives are recorded in earnings within interest and other financial charges, along with offsetting adjustments to the carrying amount of the hedged debt. CASH FLOW HEDGES GE use interest rate, currency exchange and commodity...
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...the CEO at General Electric (GE) and responsible for rebuilding the organization. Jack was faced with several obstacles prior to taking on this position at GE. One obstacle was that prior to his assignment a powerful leader had a great impact on reorganizing GE’s business strategy. Another obstacle was that several companies were moving towards globalization and GE now had to compete in this market. Therefore, Welch had to react rather quickly before foreign companies replaced GE or any other company. The last challenge was that during 1981, the economic markets were experiencing a recession. Welch’s vision of reconstructing GE was that it became the most competitive, diversified, branded and profitable company in the near future. He suggested an effective strategy to help the company by fixing, selling or closing it. Therefore, he chose to make changes to the business strategy by doing away old culture and adapting effective new ways. First, he began by restructuring the company’s current departmental managers. These managers had to agree and commit to doing away with the old GE culture and accepting new ways. Second impact was that the company’s revenues increased by 9 billion dollars from 1981 through 1986 (Exhibit 1). However, GE’s operating earnings increased from 0 in 1981 to $36 billion in 1986 drastically during the same period (Exhibit 1). Therefore, the new strategy was already effective and improving GE’s economy. It was then the time for GE to enter the global markets...
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...the CEO at General Electric (GE) and responsible for rebuilding the organization. Jack was faced with several obstacles prior to taking on this position at GE. One obstacle was that prior to his assignment a powerful leader had a great impact on reorganizing GE’s business strategy. Another obstacle was that several companies were moving towards globalization and GE now had to compete in this market. Therefore, Welch had to react rather quickly before foreign companies replaced GE or any other company. The last challenge was that during 1981, the economic markets were experiencing a recession. Welch’s vision of reconstructing GE was that it became the most competitive, diversified, branded and profitable company in the near future. He suggested an effective strategy to help the company by fixing, selling or closing it. Therefore, he chose to make changes to the business strategy by doing away old culture and adapting effective new ways. First, he began by restructuring the company’s current departmental managers. These managers had to agree and commit to doing away with the old GE culture and accepting new ways. Second impact was that the company’s revenues increased by 9 billion dollars from 1981 through 1986 (Exhibit 1). However, GE’s operating earnings increased from 0 in 1981 to $36 billion in 1986 drastically during the same period (Exhibit 1). Therefore, the new strategy was already effective and improving GE’s economy. It was then the time for GE to enter the global markets...
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...Whereas advances in communication and transportation technology have shrunk the global landscape and created an opportunity for MNCs to prosper and flourish for improvement of services and products for the consumer and created job security for the worker. The forms of integration relate to the aspect of the driving forces of globalization and the reduction of barriers from investing. Therefore, with improved communication, supply chains, and transportation effectiveness the MNCs can prosper and improve profit margins. Often start-up companies work diligently with their product performance to create an opportunity to be bought out by a larger company, which is all part of the various forms of integration. Nonetheless, there are critics of MNCs as was illustrated by the EU and the GE merger with Honeywell. Though the EU viewed the merger as a complete monopoly it did not stop GE from continuing to expand its market share in other aspects of its organization as the company focused on solar and wind energy (Anwar, 2005). Companies desire to grow and improve efficiencies along the way and understanding the various forms of integration assists in the comprehension of what is the best option for one’s own merger...
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... The business that I chose to research is General Electric. GE is one of the oldest and largest businesses in the United States. They are ranked #26 largest firm in the U.S and the 14th most profitable. GE is a massive, diversified and profitable conglomerate with a lot of very good but unrelated businesses. GE has expanded to incorporate television, airplane engines, medical devices, household appliances and commercial financing. Analyzing GE’s business-level strategy is somewhat difficult being that GE has so many different divisions. Any of these products would serve as a large and viable business on its own but GE has them all under one corporate umbrella. GE’s business level strategy states “GE is building the world by providing capital, expertise and infrastructure for a global economy. GE Capital has provided billions in financing so businesses can build and grow their operations and consumers can build their financial futures. We build appliances, lighting, power systems and other products that help millions of homes, offices, factories and retail facilities around the world work better.” Figure 1 GE’s Organizational Structure and Business Portfolio. 2001 Figure 2 GE’s Organizational Structure and Business Portfolio. 2007 What is most important to the long-term success of GE is long term growth and investing in innovative opportunities that are closely related to their core. I believe if GE focuses on the core businesses that generate the most profits...
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...perform and the rapid globalization thats happened is making it even more challenging. GE uses management science theory to manage and organize its company. The company uses the classical perspective to train its employees into becoming leaders, its uses behavioral management perspective by providing its employees a place where they can go and develop their skills. It has kept up with the contingency perspective by creating new leaders, that are able to advance as globalization changes. GE has used management science theory more than quantitative approaches to provide their customers the products and satisfaction they want. The company choices its employees based on how passionate and innovative the person can be, and it also helps its employees gain more knowledge and skills. GE has developed the Crotonville campus in New York, to help its employees and anyone willing to learn, bring out the best potential in their work, GE spends millions of dollars to provide that to people from all around the globe, which shows how much they care about what kind of people should be leading. GE has some of the most passionate and innovative people in this world, that is why GE has managed to stay as one of the top company's in the United States. The pattern of management developments at GE over the last century does reflect the pattern suggested by management theory. Management theory is a group of ideas which set general rules in how to organize and manage a business. GE supported the management...
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...the previous two decades seemed justified judging by the many accolades GE was receiving. For the third consecutive year, it had not only been named Fortune's "Most Admired Company in the United States," but also Financial Times' "Most Admired Company in the World." And, on the eve of his retirement, Fortune had named Welch "Manager of the Century" in recognition of his personal contribution to GE's outstanding 20 year record. Yet while the mood at GE's 2001 annual meeting had clearly been upbeat, some shareholders wondered whether anyone could sustain the blistering pace of change and growth characteristic of the Welch era. And specifically, many worried if any successor could generate the 23% per annum total shareholder return Welch had delivered in his two decades leading GE. It would be a tough act to follow. (See Exhibit 1 for financial summary of Welch’s era at GE.) The GE Heritage Founded in 1878 by Thomas Edison, General Electric grew from its early focus on the generation, distribution, and use of electric power to become, a hundred years later, one of the world’s leading diversified industrial companies. A century later, in addition to its core businesses in power generation, household appliances, and lighting, the company was also engaged in businesses as diverse as aircraft engines, medical systems, and diesel locomotives. Long regarded as a bellwether of American management practices, GE was constantly undergoing change. In the 1930s, it was a model of the era’s...
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...previous two decades seemed justified judging by the many accolades GE was receiving. For the third consecutive year, it had not only been named Fortune's "Most Admired Company in the United States," but also Financial Times' "Most Admired Company in the World." And, on the eve of his retirement, Fortune had named Welch "Manager of the Century" in recognition of his personal contribution to GE's outstanding 20 year record. Yet while the mood at GE's 2001 annual meeting had clearly been upbeat, some shareholders wondered whether anyone could sustain the blistering pace of change and growth characteristic of the Welch era. And specifically, many worried if any successor could generate the 23% per annum total shareholder return Welch had delivered in his two decades leading GE. It would be a tough act to follow. (See Exhibit 1 for financial summary of Welch’s era at GE.) The GE Heritage Founded in 1878 by Thomas Edison, General Electric grew from its early focus on the generation, distribution, and use of electric power to become, a hundred years later, one of the world’s leading diversified industrial companies. A century later, in addition to its core businesses in power generation, household appliances, and lighting, the company was also engaged in businesses as diverse as aircraft engines, medical systems, and diesel locomotives. Long regarded as a bellwether of American management practices, GE was constantly undergoing change. In the 1930s, it was a model of...
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