Business with GeEssay Preview: Business with GeReport this essayFor this assignment I chose General Electric, for its long history in international trade and business and also for the reason of them opening up a new jet building facility in Brazil. GE is a company that seems to put a lot of belief in the globalization of business, and because of this they have strategies and business history to help them make choices that can push them into the international business leadership realm.
GE has stated that “the promotion of globalization and international trade is one of GEs fundamental public policy commitments-one of our “True North” positions that is ingrained into our company ethos.” (GE, 2012) this type of global understanding of international trade is a fundamental building block for all types of business trade. GE has been an industry leader for over 130 years and has brought about global change with its inventions and research; now let us take a look at what they have done recently in the global market.
The sort of international orientation GE has is based in the statement above. GE desires to have a company that is globally recognized allowing the opening up of trade between countries, this concept is crucial to its growth.
When looking at the type of company that GE has become on a global scale, based on the three business terms that are called ethnocentric, polycentric, or geocentric we will break down each. Ethnocentric is basically the idea that a company would staff their international businesses from the home country they are based out of (Wild, Wild, Han, 2010). Polycentric is when staffing is done from the host country for the business abroad (Wild, Wild, Han, 2010). And last but not least we have Geocentric, which means that the company, regardless of where they are at, they wish to hire the best people for the job, no matter where they are from (Wild, Wild, Han, 2010).
GE would definitely fall into the geocentric model for their international business ideas. You can see this on the website MIT Sloan Management Review stating “one company thats especially good at aligning recruiting efforts with strategy is GE”. (2012) GE wants to do their best, be it nationally or internationally, and the only way to do this is to hire the best and brightest.
The decision factors for GE to expand into Brazil is nothing new for GE the thought has been around for a while as a matter of fact GE has been in Brazil since 1919, and has over 6000 employees. (GE, 2010) They are doing this by investing in the people and the country in the form of a 500 million dollar operations expanse in Brazil. This was largely based on the ability to bring in the Latin American workforce and new consumer base, which will be located at the Rio-de Janeiro Global Research Center. This not only gives GE a workforce that is cheaper it also allows for a global trade site that does a lot of international business with countries such as China, which can have higher sanctions on them in the U.S..
Brazil in the last 10 years has had an improving economy and a growth base as large as any country, showing the ability to become a recognized force in the Latin American culture. Also Brazil has the largest GDP of all Latin American Countries. (Info Please, 2012)
GE not only has the core capabilities to succeed in the Brazilian market, but also has history. GE has a history of building relationships within that country and their local businesses and leadership. In 2010 GE gave $200 million for green energy product development, $50 million for training and leadership development and a global learning center (GE, 2010). These areas alone show that GE is not afraid to put their money into a country that will allow them to succeed in areas that have been previously closed off to them. GEs core capabilities are built within the energy spectrum such as electricity and power, Brazil has a fairly low power usage compared to the U.S. and GE is using this to help create a better, greener end product, such as wind turbines and solar arrays,
The Brazilian government was critical of GE’s efforts to get the power and development right, but the company wanted to build the experience globally. In 2010 and 2011 GE was instrumental in a decision to build a Brazilian solar power plant in the region called Bonaire. They were the first to build a photovoltaics plant here and to build a fully integrated solar plant in Brazil that they hoped would become profitable. GE decided to do this with their existing A5 power plant in the state of Bonaire.
Although Brazilian government agencies and businesses are required to provide certain environmental environmental assessment, the federal governments do not. This is because not all measures are available to the state government. And when the time comes for the Bonaire project to go ahead the government has little role in it. However, the decision to set up the project in Brazil could be seen as an attempt to build up the power and energy market and to boost the global economy.
The idea of being able to use GE’s ability to use renewable energy for business, especially with a wind and solar plant, seems crazy, but I cannot imagine that they could use global markets and the ability to take advantage of them to use a country with a poor grid for a business. This could potentially be a very successful investment if GE can build some business from this area to start their own businesses.