General Electric is a powerful company which has been lucky enough for many years to have the competent and effective CEOs who have made the company one of the world’s largest manufacturers of various goods. The innovative approach to doing business and recognition of great importance of taking into consideration the cultural factor as well as language specifics has given General Electric the opportunity to be successfully accepted and promoted in multiple countries across the whole world. Furthermore, the analytic ability to forecast the tendencies on the market in both near future and on more far-fetching scale make the company do as little mistakes as possible, and vast investments across the whole world in combination with highly-competent stuff bring in profits continuously.
Profits for General Electric from Doing Its Business Abroad
It is obvious that doing business on the international level opens up a way to millions of potential clients, however, only the smart rule allows the company to meet the needs of those clients as it frequently occurs that what is profitable in one area, is completely unbeneficial in the other. General Electric could predict that by expanding to Asia and Europe, it would be possible to increase the profits by approximately 40 percent. Choosing the development countries which showed a fast pace of economic growth allowed the company to buy a lot of corporations that were experiencing serious difficulties. The aggression which General Electric revealed only outlined the perspectives of those countries and CEO’s comprehension what they could give to General Electric. Moreover, the managers saw that such good opportunity could not stay idle for too long and other companies would soon also realize the potential of the troubled units, thus, they made quick decisions and acted correspondingly. Otherwise, they would have to find some other ways to get to the Asian market which could be either more costly or not that effective.
One more interesting fact is that if General Electric simply tried to establish their business in the other country (Asia in particular due to the stereotyped, way too traditional and conservative views of the larger number of countries on the continent), they could face the opposition by the local corporations which would be more than unwilling to have a new competitor, especially foreigner. General Electric managed to become a hero in the situation as they saved many national companies that could have only caused more troubles to the local budgets. Many people stayed employed when they were on the edge of getting fired. The economy of the countries was not damaged much, too.
Certainly, General Electric was aiming also at a profit as this is not a charity organization, thus, aggressive actions helped to get them what they truly came for. If to look at the situation from the perspective of the American CEO of the huge corporation, the ability to reduce the expenditures and multiply revenues is a number-one priority, and the wages in the developing countries also cannot be compared to those in the highly-developed ones, therefore, the profits are more than obvious. I think that GE is trying to exploit lower wages. I feel that just like most American manufactures, they are always trying to find ways to reduce their costs.
General Electric’s transfer
As I already tackled the question of profits for General Electric from doing its business abroad, we may now also observe another tendency which bothers a lot of American citizens – the transfer of many headquarters to European (in particular Great Britain) and Asian (mostly Chinese) territories. This move can be explained by the same criteria: Low wages, cheap labor force, less developed market where quality goods for reasonable prices are not as abundant as in the United States. Moreover, General Electric’s opportunity to extend its borders is very effective step to become even more powerful corporation. To do this, the company needs to exert some control over the branches which are in the other countries, and due to the certain cultural background the personal relationship are granted a very special attention which can be fostered by the sign of respect and recognition of the significance of those countries by General Electric when transferring their headquarters to Europe and Asia.
Unfortunately, for the American community, the described situation is more of an ideal reason which General Electric can spread. The real reason for transfer is more practical and down-to-earth: Profits from everything. Each sector of the same business the company has in the United States would be more profitable in the developing countries as the cost for production, maintenance, and distribution would be lower and General Electric can make much larger revenue on it. On the other hand the prices for goods are also lower but still the overall summarization shows the higher profits for the company.
However, such strategy does not seem to be such a good move for the Americans who feel like the national company is giving up on them for the sake of some other countries across the ocean. People worry about lost jobs, though the CEO ensures the no one will lose their jobs. There are also positive sides for the nation, as the majority of the produced in China (for example) goods is returned home in the form of import which means that if the government made the tariffs for imported goods higher, a significant benefit for the state treasury can be observed. People from developed countries frequently complain about the quality of the produced in China goods, therefore, the government should also include some restrictions which would certify that the demands of the consumers are properly met.
Internalization issue
The internalization issue is not quite clear as it definitely hints on some hidden motifs of General Electric which are well-hidden behind the prism of better cooperation and mutual understanding between international companies. On the other hand, what other motifs but receiving profit can the manufacturing company have? Therefore, it seems to be clear that the first goal of internalization of the ranks of General Electric is to expand the range of sales across the borders. Moreover, the government facilitates such expansion effectively by bringing down administrative and regulatory barriers and welcoming foreign investment as a direct way to foster rapid development of the national sector.
To internationalize senior ranks means, first of all, to take into consideration the opinions of people from around the world. One thing is when the market analyst from the United States studies carefully the needs of the Polish people (as an example), and another thing is when the Polish manager heads some project of the company and promotes a strategy how to satisfy needs of his nation. The advantages of such cooperation are obvious as apart from raising trust in the company by the Polish, the company would not have to go through all the possible mistakes that may arise.
Secondly, the mentality of the country is learnt through direct cooperation with the potential client. Cultural background, customs and traditions may sometimes play a wicked game on the unfamiliar people. Even business ethics can cause a lot of issues before the cooperation even starts if the potential partners do not know traditions of each other, what is allowed, forbidden, considered a good taste, etc. by means of internalization, General Electric can obtain managers from around the world who would deal with the businesses locally, making each branch of the company bear a lot of national traits, greatly facilitating sales.
The Hazards of the Global Business
The global business is stable but constantly moving, developing, and changing. Those businessmen who are able to be in pace with these changes gain multiple profits. However, those corporations which can be one step forward of all these changes, or better say be the one who make those changes, have all imaginable benefits from their activity. General Electric has definitely become one of such companies, therefore, it is quite selfish of the Americans to attempt to stop the company from its natural and, more importantly, deserved growth. In the overwhelming globalization process the company either follows its rules and internationalizes its sectors with the trends in the whole world or lacks behind, confined by the national borders.
Certainly, the free international trade may become a world’s issue number one if not properly and very carefully regulated, as there are lots of countries which produce so low-quality goods that they constitute a real hazard to life, and with the growth of global business, the distribution of such goods is highly possible. Therefore, the hazards of the global business do exist and they facilitate greatly the globalization processes which erase endemic features for each nation, creating one large community. However, this is already the competence of each country to take care of their cultural heritance, but the recognition of the unstoppable force of the global business should be accepted as a given as the eternal engine has started and it cannot be stopped.
Nowadays, the world’s rapid growth is both scary and magnificent, making many people think how our planet will look just a decade into the future. Globalization opens all possible borders, making people have a lot of opportunities and choices never known before. The same situation goes on with business – those companies who can adjust and be initiators of the changes lead the world. The success of General Electric lies, first of all, in the thoughtful management which ensures global growth. Moreover, the company’s ability to broaden the production sectors to various, often quite opposite, products helps them to become a manufacturer of the higher rank. The managers understand that in order to provide for a rapid expansion, they should engulf those companies which are on the verge of financial crisis. In such a way, General Electric erases more borders, gains customers, and locally decides which new sector can be included in the certain area that can bring profits. General Electric is an outstanding example of the global company which does not belong to one country anymore – it is a world’s corporation which knows people’s needs well enough to satisfy the multiple tastes.
