Global Management Perspective - Portfolio Project

Week 7 - Portfolio Project

Name

American Public University

BUSN601

Date

Introduction

This paper will discuss General Motors’ foundation of global business, global business environment, their strategies, organizational structure, and lastly their methods on managing global business.  I decided that General Motors was an exceptional candidate for this research because they have been a long standing pillar of American tradition and they have embraced globalization. They’ve continue to strive for excellence and have flourished within recent years but their history is not without problems.

Foundations of Global Business

         General Motors (GM) is a multinational corporation headquartered in Detroit, Michigan, United States. GM operates 396 factories worldwide and produces vehicles in 37 countries under ten brands. GM designs, manufactures, market and distributed vehicle and parts, and sells financial services. Three of the countries that GM operates in are Australia, Canada, and Germany. (Statistics Brain, 2014) GM has been operating out of these countries for several years. The Canadian plants were founded in 1918; the Australian manufacturer Holden and German manufacturer Opel merge with GM in 1913. (“Mergers and Acquisitions”, n.d.) GM being established in these countries for 84+ years has given the different division ample time to conform to GM’s view toward globalization.  

        Australia, Canada, and Germany have established this long standing with GM by providing safe and profitable economy’s within their countries.  All three countries are part of the International Monetary Fund (IMF), the World Bank (WB.) and the World Trade Organization (WTO formally know at the General Agreement on Tariffs and Trade (GATT). Australia joined the IMF and WB August 14th, 1952, shortly after they joined the GATT/WTO on January 1st, 1948. Canada joined the GATT at the same as Australia but got on board with the IMF and WB a bit sooner on December 27, 1945. Germany was a few years behind the curb but eventually joined the GATT/WTO October 1, 1951, followed by the IMF and WB on August 14, 1952. (“List of Members,” 2012; “Member Countries,”n.d; & “Members and Observers,” 2015)

        Another factor that General Motors must consider is the judiciary system and the differences between the United States and another country.  Australia, Canada, and Germany all practice higher levels of democracy that results in their law system being similar in foundation to the U.S’s judiciary system. (World Audit Democracy, 2015)  Although there are differences that must be address and understood when preparing contracts or legal matters outside of the U.S. Australia practice common law that is similar to our English model, which can make for an easier transition and ease communication conflicts. Canada predominately is common law. However, Quebec practices civil law. Lastly, German is completely civil law. (“Country Comparison to the World,” n.d.)  I believe that they countries closely abide by the guidelines set by the IMF, WB, and WTO and I feel this can be reflexed in the corruption statistic for the country. Australia, Canada, and Germany score very low on the corruption scale, 9-11 low score out of 175 countries, thus backing the fact these countries have implemented strong judiciary systems and followed guidelines set by financial institutions and trade organizations.(“World Audit,” 2015) Also, with bridging the global divide countries are able to research and identify with international news. The Enron scandal is a perfect example of a corporation that practices poor business ethics and did not provide transparency, resulting in their failure as costing shareholders across the world millions of dollars. This incident increased enforcement of policy and implemented harasser punishments for fraud. (Pealver, n.d.)