General Motors, which is examined extensively in this paper, is a renowned American multinational corporation with its headquarters in Detroit, Michigan, in the US. It deals with designing, manufacturing, marketing, and distributing vehicles and vehicle parts. It sells financial services as well. This paper analyses numerous perspectives regarding General Motors such as the countries where it does business, whether it operates in any countries that are politically or economically risky, and whether it operates in civil or common law countries. Besides, this paper examines whether General Motors has been involved in the purchase of any insurance from OPIC, the key intellectual properties it possesses, and the Corruption Perceptions Index of some countries where it does business. The mode of entry into foreign markets, exit strategy, ethicality of its operations, corporate mission statement, categorization of the firm as a shareholder or stakeholder orientation, whether it is a stateless corporation, type of organizational structure, and whether it would benefit from a hybrid or matrix structure, are some of the essential perspectives about General Motors analyzed in this paper.
General Motors does business in over 120 countries including key countries such as the US, Canada, Brazil, the UK, and China (Sloan, 2015). Based on one of Hofstede cultural dimensions, individualism, the US is ranked 91st, Canada 80th, UK 89th, and China 20th. As compared to other countries in which the company does business, the US is more individualistic, and thus, a US manager would have to align his or her behavior with collectivist values when communicating with associates from a foreign country such as China. General Motors operates in countries in Latin America, Asia, and Africa, which are considered very politically and economically risky. Also, it primarily operates in common law countries such as the US, and this implies that it has to abide by the statutes or legislations, which are the sources of law.
Being a multinational corporation, GM has subsidiaries worldwide, and it is seen as one of the companies that have invested and created jobs overseas. The achievement of these objectives has been fuelled by GM’s purchase of insurance from the US Overseas Private Investment Corporation (OPIC). GM’s success also relies on its possession of critical intellectual property protections, for instance, patents, which expire annually. In fact, it is argued that GM leads all companies in total US clean energy patents, which have been granted in the past thirteen years. In the case of patent or other intellectual property protection expirations, GM’s commitment to creating customer-driven innovation often helps it recoup lost revenues (Crumm, 2010). Other than intellectual property theft and expirations, GM faces the challenge of corruption in the countries where it does business. The US where GM operates had a Corruption Perception Index (CPI) score of 76 in 2015 whereas China, where GM also operates, had a CPI score of 37 in the same year. China has in recent years experienced financial scandals that have jeopardized its economic growth. In 2012, 24 individuals were charged with defrauding investors of around $1.5 billion. Financial scandals resulting from corruption drive away investors and lending institutions and lead to inflation, which in most cases, jeopardize operations of multinational companies such as GM in corrupt countries.
General Motors’ mode of entry into foreign markets entails forming joint ventures with already existing companies. For instance, to penetrate into the Chinese market, GM formed a joint venture with the Chinese Company known as SAIC Motor. This can be considered the right approach as GM does not have a hard time attracting customers in foreign markets. However, in the case of economic crises in foreign countries, GM’s exit strategy is to trim production and gradually stop selling its brands. At the end of 2015, GM leveraged on this strategy to exit the Russian market, which was compromised by political instability and economic depression. The fact that ethics is evident in GM’s global operations and that its stakeholders are good corporate citizens should not be ignored. This is evident in the fact that in 2010, GM, through one of its brands, Chevrolet, invested $40 million in carbon offsetting projects throughout America. In South Africa, GM has in recent years embarked on educational initiatives, which have helped improve the quality of education in S.A (Crumm, 2010).
Like every other organization, GM has a mission statement, which states that “GM is a multinational corporation engaged in socially responsible operations, worldwide, and it is dedicated to providing products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stockholders will receive a sustained superior return on their investment” (Sloan, 2015). GM’s commitment to providing quality products and services to customers underlines how well it adheres to its mission. Upon its reorganization in 2010, GM made an initial public offering (IPO), and thus, it is categorized as a shareholder model. It is also imperative to note that GM is a stateless corporation as it operates in over 120 countries.
Regarding organizational structure, it is important to point out that GM currently uses the line and staff structure. In this type of organizational structure, employees and other staff members are hired to help line managers with the performance of activities, and this is enabled through the creation of staff departments. The shift from the line and staff structure to the hybrid or matrix structure would be beneficial to GM as it would provide flexibility in responding to the needs of customers, an objective that cannot be achieved with the line and staff organizational structure.
Crumm, T. A. (2010). What is good for General Motors?: Solving America’s industrial conundrum. New York: Algora Pub.
Sloan, A. P. (2015). My years with general motors. Crown Pub.