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Hungarian Case of General Electric - Term Paper Example

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General Electric Hungary Forces associated with globalization are important in shaping the international competitive strategy of multinational corporate players, because globalization offers a way for firms to achieve long – term above average returns in a highly competitive global environment. However, it is important that the growth strategy of multinational firms is formulated after a very careful consideration of the prevailing situation and likely future projections, because although the global environment can offer great opportunities, the rapid change in global competitive environment can also threaten what had been built up with a great deal of effort. It is unlikely that the rate and magnitude of change in the global competitive environment will slow in the future and multinational firms are in for increased competition in the next decade. The opening up of the Central European economies had offered a unique opportunity to the multinational giant General Electric for expansion into new markets and for the competitive production of lighting equipment for Europe. Between 1989 and 2002, General Electric invested about $ 1 billion in Hungary, the then most promising of Central European economies, to acquire Tungsram, the world’s oldest lighting company. Encouraged by the success of it’s initial investment, General Electric proceeded to expand into banking, manufacturing and engineering in Hungary and this expansion resulted in the creation of General Electric Hungary Inc. This essay attempts take a look at the important considerations behind General Electric’s Hungarian expansion at a time when its lighting equipment operations are being threatened by the desire of Chinese manufacturers to capture export markets in Europe. Contents Introduction 4 Identification of Case Issues 6 Multinational Management Strategy and General Electric Hungary 6 Conclusion 18 Bibliography / References 19 Appendix 1 – Issues Table 24 Appendix 2 – The General Electric Hungary Case 26 List of Tables and Figures Figure 1: Chart Indicating Exports, Imports and the Degree of Openness of the Hungarian Economy 11 Figure 2: Chart Indicating Increase in Sectors of Production in Hungary 12 Figure 3: Chart Indicating Exports, Imports, Capital Formation and Destination of Production from Hungary 13 Figure 4: Charts Indicating Structural Changes in the Hungarian Economy 14 Introduction Strategic management is about the achievement of strategic competitiveness and earning above – average returns (Hitt, 2001, Chapter 1). In the present era of globalization, strategic management for the multinational company means being able to take advantage of opportunities that are available across the globe in order to align operations with business strategy so as to maximize returns and the security of investments (Akbar, 2005, Pp. 1 – 5), (Henisz, 2002, Pp. 1 – 6) and (Cullen, 2005, Chapter 1). Multinational corporations can establish new facilities, extend market share and benefit from factor – cost advantages by investing in transition and less developed economies (Richet, 2001, Pp. 2 – 5). Western firms have sought to enhance their presence in Central and Eastern Europe in order to pursue a strategy of penetration and conquest of new markets, (horizontal integration), as well as to reallocate resources in order to reap advantages associated with factor costs (vertical integration). Acquisition of an East European firm by a Western multinational is attractive for the firm that is being acquired because such an acquisition offers access to world markets and an opportunity to avoid bankruptcy which can occur as a result of inefficient operations and a lack of markets with capital. An inefficient enterprise which had been operated along the lines of socialist managerial traditions can transformed from a low productivity, passive financial transaction and centralized decision making organization into a competitive private enterprise which operates in global competitive environment with well defined limits and delegation of responsibilities (Richet, 2001, Pp. 5). In the past, Hungary has been considered to be a more attractive investment proposition by multinational companies because of its political and economic stability, greater trading and investment freedom and an ability on the part of the investing company to have a greater say in the management of joint venture companies (Wang, 1992, Pp. 1 – 10). Previous import / export associations with Hungarian companies, successful experience of previous industrial cooperation, opportunities provided by the economic transformation of the country and the region as well as expected higher profits that could be generated in the country were some of the other reasons for Western firms wanting to invest in Hungary. The European Union offered opportunities for the free movement of goods and services as well as a common currency in a large market and the proximity of Hungary to this market not only meant access to market and technology, but Hungary itself offered low manufacturing costs and previous experience of operating heavy mechanical and electrical industries. Hungary was also considered to be a more open society which had not been deeply ingrained in the communist ideology. Revolt against communism in Hungary had started as early as 1956, when during the Hungarian Uprising, a group of students had read a sixteen point manifesto demanding democratic freedoms and reforms from the then Soviet backed government (DFAT, 2006, “Anniversary of 1956 Hungarian uprising”). About 2600 Hungarian freedom fighters were killed and a further 230 were executed during this uprising. Thus, many Western nations and multinationals considered Hungary to be a country which had revolted against communism. It was important for Western firms to select locations where they could manufacture quality at a lower cost and Hungary appeared to be an attractive European location for investment. The former Tungsram Company in Hungary, which was one of the world’s oldest lighting companies, provided General Electric of the United States of America a rare opportunity to expand its manufacturing operations into Europe and to manufacture at competitive costs in order to compete with the European companies Philips and Siemens (Appendix A – The General Electric Hungary Case). Tungsram had established operations which exported most of the products that were manufactured to established European and international markets. However, Tungsram was in trouble because it was not able to effectively exploit new market opportunities and its manufacturing technology as well as R & D efforts could not sustain competitive innovation. Thus, the acquisition of Tungsram by General Electric offered a unique opportunity to General Electric to compete effectively in the European and world markets without having to invest in totally new facilities which had to be built up from scratch. The consulting firm of Arthur D. Little had old associations with General Electric and it must have seen some merit in Tungsram because after the release of Arthur D. Little consulting report on the Tungsram Company, General Electric decided to invest in this company (Arthur D. Little, 2006, “Timeline) and (Appendix A – The General Electric Hungary Case). It is unlikely that any of the other two European lighting and electrical equipment manufacturers, Siemens or Phillips, could either have matched the capacity to inject funds into Tungsram or would have been interested in the Tungsram investment because of existing manufacturing facilities in Europe. Between 1989 and 2002, General Electric invested $ 1 billion in Tungsram and acquired the company. This move was also followed by substantial investments in other Hungarian businesses between 1995 to 2001and General Electric Hungary was born. This brief essay attempts to examine the Hungarian investments made by the multinational company General Electric in terms of the firm’s multinational management strategy. Identification of Case Issues The important issues that General Electric had to sort out have been mentioned in the “Identification of Case Issues Table”, which is presented in Appendix 1. This brief essay takes a look at the manner in which General Electric, a multinational, should identify the best possible acquisitions for its global operations and how these operations should be restructured and constantly fine tuned to make them competitive in a rapidly changing global business environment. Multinational Management Strategy and General Electric Hungary Firstly, the issues involved with General Electric’s requirement to identify the most appropriate acquisitions for its global operations are discussed. The main objective of General Electric behind its acquisition of Tungsram was to integrate a competitor with low production costs and an ability to enter the world market for light bulbs into the company (Richet, 2001, Pp. 14). However, this acquisition had to be reorganized in order to fit well with General Electric’s global strategy for the production and supply of electric light bulbs. It is important for a multinational to strategically align manufacturing operations with its global strategies (Decoene, 2003, Pp. 3 – 4). Standardization of production and the establishment of control systems for the delivery of quality which was required by the international markets were essential. It was also important that the newly acquired company, Tungsram, was reorganized in a manner that prevented internal competition within General Electric for similar products that were manufactured by more then one business units of General Electric. Thus, the production of some lighting products at Tungsram was discontinued in order to integrate the new acquisition with the rest of General Electric operations in a synergistic manner. The production from the former Tungsram was required to be sold in the market as a value for money brand, while production from other manufacturing operations of General Electric was introduced in the European market as a quality brand. This was necessary in order to cater for the differences in the variations of purchasing power in the European market. Multinational companies today are facing pressures to offer a single global price for their products and this is due to the success of globalization and the transparency afforded by the internet. However, the real world problems involved with the single price issue are substantial and include issues related to account currency swings, taxes, local regulatory burdens and local price levels (O’Neill, 2003, Pp. 14 – 16). Thus, it was important for General Electric to adopt a realistic attitude by trying to offer the greatest affordability for its lighting products to all consumers in the broadest possible arena of global markets. The decision by General Electric to expand its operations into Hungary was a part of its globalization strategy. Globalization refers to the integration of trade production processes, capital markets and political as well as social interactions so that the best practices are adopted (O’Neill, 2003, Pp. 14 – 16). Globalization is important because profits from a global strategy are far more likely to be greater then any profits that have been derived from a purely domestic strategy. Also, unless multinationals indulge in well thought out strategies for globalization, their competitors are likely to gain an advantage over them and steal the markets as well as the profits. Thus, it is important to build a global brand, indulge in efforts towards integration with the local community in overseas countries, indulge in efforts to capture and spread within an organization the best practices from around the world, indulge in efforts to optimize operations by utilizing the best available technology that is available to a multinational and to have employee – friendly work practices that enhance quality and productivity. It is important for a multinational to have a well thought out strategy for transition and developing economies and to have a meaningful social engagement at the local level in order to sustain above average returns by contributing to the public good. It was important for General Electric to have a strategy for success in the newly emerging markets of Europe and Tungsram fitted in nicely. By being a good employer and acting responsibly in Hungary, General Electric was working for the local good and hence assimilating into a newly opened region of the world (O’Neill, 2003, Pp. 23 – 25). Although market size was the most important consideration affecting the decision to invest, the evolution of per – capita incomes in the countries of Central Europe as compared to the countries of South – Eastern Europe explains why Hungary and other countries of Central Europe have received more FDI from companies such as General Electric (Pournarakis, 2002, Pp. 3 – 5). As of 2002, Hungary had received $27 billion in FDI and the Investment Act of this country grants significant rights and benefits to foreign investors including granting of national treatment for foreign investors, protection from losses resulting from nationalization, free repatriation of invested capital and dividends as well as abolishing a general requirement for government approval (Akbar, 2004, Pp. 93). In the broader European context, Hungary only lags behind Estonia in transparency of tax regulations index and this places the country in a better position then Italy, Belgium or Sweden (Akbar, 2005, Pp. 8). The country’s efficiency of legal environment and foreign ownership regulations are the best in the region and it has the best scientific and research institutions in Central Europe. The corporate tax rate is also the lowest in Central Europe. Interdependencies of economies in Central Europe and associated economic fortunes had even made the benefits associated with an impending accession to the European Union largely already available. Hungary was the first country in the region to try and create the right political, legal and economic conditions that are necessary for attracting foreign direct investment, or FDI and it was possible for foreign investors to achieve dominant share in most industrial sectors in this country over a much shorter time as compared to other European countries such as Ireland, Portugal or even Spain, which offered comparative factor – cost advantages (Hamar, 2002, Pp. 1 – 10). Also, Hungary was successful in achieving a high degree of openness for its economy. In the year 2000, the share of exports to GDP was 54 % and the share of imports to GDP was 56 %. These figures were better then the figures for Spain, Portugal and Greece. Massive FDI inflows into Hungary considerably enhanced firm performance and offered many further opportunities, despite the fact that manufacturing in Hungary had started to show signs of a dual economy as early as in 1996, with foreign owned firms forging ahead and indigenous firms lagging behind (Hamar, 2002, Pp. 8) and (Lemoine, 1998, Pp. 167 – 168). Many of the larger manufacturing firms in Hungary were operating to generate production for export only and evidence existed for close integration of firms with European corporate networks. These conditions provided an indication that investments in the banking sector could be of benefit to the investor. The degree of monetization and bank intermediation in Hungary was surprisingly low (Várhegyi, 2002, Pp. 75 – 82). The banking climate that had existed in Hungary and the promise that this country held for other multinationals who were also keen to pour in FDI funds encouraged General Electric to invest in the banking sector of the country because having a banking presence will have meant that General Electric could extend financial services to many who were in need of capital in this relatively stable country. Banks in Hungary had remained cautious in extending loans and competition had existed in Hungary with other sources of finance, especially cross – border finance. The Hungarian banking system was not particularly interested in extending loans to large firms in particular and this had meant that a market existed for the funds that General Electric Capital could pump into Hungary. Hungarian banks have been far more interested in purchasing government securities, rather then taking on the risks associated with lending to the private sector in an economy which was not exactly flushed with money (Akbar, 2004, Pp. 101). Considerable scope had existed for lending to all sectors in Hungary, including the small to medium – sized enterprises. Thus, between 1995 and 2001, General Electric acquired a 98 % interest in Budapest Bank, which is one of Hungary’s largest banks (Appendix A– The General Electric Hungary Case). Encouraged by the success of its Tungsram acquisition and the low factor – costs associated with operating in Hungary, General Electric also invested in Medicor, a medical equipment and instrument manufacturer and started new engineering ventures to manufacture industrial equipment, electrical switches and to repair aircraft engines. These separate additions to the General Electric family were to be grouped as a Hungarian subsidiary of General Electric which was to be known as General Electric Hungary Inc. One of the most important reasons behind the combining of separate business operations into a single country corporate entity was to make it easier for the group to negotiate with the government of Hungary with a single voice (Appendix A– The General Electric Hungary Case). Figures 1 – 4, which have been presented below, present a picture for the Hungarian economy at the time of the formation of General Electric Hungary Inc. Figure 1: Chart Indicating Exports, Imports and the Degree of Openness of the Hungarian Economy (Hamar, 2002, Pp. 27) Figure 2: Chart Indicating Increase in Sectors of Production in Hungary (Hamar, 2002, Pp. 28) Figure 3: Chart Indicating Exports, Imports, Capital Formation and Destination of Production from Hungary (Hamar, 2002, Pp. 30) Figure 4: Charts Indicating Structural Changes in the Hungarian Economy (Hamar, 2002, Pp. 32) From the previously presented figures, it is obvious that the Hungarian economy grew substantially between 1989 and 2001, the years in which General Electric Hungary was formed. Exports from the manufacturing sector increased sharply and a structural shift was witnessed in the Hungarian economy towards manufacturing. Obviously, at the time, the country was awash with FDI and the business conditions must have been such that many foreign companies must have taken an interest in the country. Today, Hungary is one of the most advanced transition economies in Europe, with the private sector making substantial contributions to the GDP (DFAT, 2006, “Economic Developments”). Thus, economic forecasters and management strategists at General Electric must have forecasted a rosy picture for Hungary at the time of the formation of General Electric Hungary Inc and this must have contributed to the investment decisions by General Electric. Accession to the European Union was likely to further enhance Hungary’s integration with the rest of Europe and manufacturing investment in Hungary was needed because the country had been showing a deficit in its trade balance with the rest of the world. This deficit could only have been reduced if Hungry was able to export more and reduce its dependence on imports. Thus, Hungary had fitted in nicely with the European strategy of General Electric (Mockler, 2002, Pp. 1 – 10). Apart from General Electric, Sara Lee, Guardian Glass, Ford and Suzuki were other prominent early investors in Hungary (Feher, 1998, Pp. 1 – 5). General Electric had the choice of starting a totally new operation to expand into the European market for lighting products, acquire a promising operation or to source products from its existing lighting products plants. General Electric opted to acquire existing operations in Hungary after due consideration of the factors associated with acquisitions which have been discussed previously. Multinational corporations have always considered issues associated with efficiency, distribution, sovereignty and growth as well as corporate development when considering international investment strategies (Pearce, 2006, Pp. 40 – 50). Diversity is important for a multinational company such as General Electric. Thus, investments in Hungary offered a good opportunity to General Electric and this opportunity was seized. Multinational behavior has been characterized by market seeking, efficiency seeking and knowledge seeking attributes and General Electric’s behavior fitted these behavioral characteristics. The perceived interests of both Hungary and General Electric were aligned completely. Hungary even offered the best knowledge seeking possibilities amongst all the countries of the region because of its excellent scientific research and academic institutions. At the time when General Electric invested in Hungary, this multinational had a considerable bargaining strength in any negotiations with the government of Hungary, Tungsram and others, because its timing was right. Hungary, with a leaning towards a European welfare state future was different from an Asian investment proposition and more in line with the General Electric culture. The country was selling to the rich and General Electric was rich enough to buy (Comisso, 1998, Pp. 21 – 34). The European strategy which General Electric had pursued was similar to that of Asea Brown Bowery, ABB, whose first CEO Percy Barnevik had remarked that “the only successful strategy for division of labor in Europe is to manufacture high – tech products in the West and standard products in the emerging countries” (Radosevic, 2002, Pp. 11 - 25). However, it was important for General Electric to construct the most appropriate organizations in Hungary which could best exploit the opportunities offered to this multinational by Hungary, the region around it and Europe. The strategy of General Electric in Central Europe was similar to that of ABB which preferred to buy potentially profitable divisions of bankrupt old enterprises which could be made profitable by injecting funds and devising the right business plans. Once ABB was in control, it would install its accounting system, train middle level managers in English who were required to communicate directly with the ABB corporate headquarters and introduce quality management systems to enhance production quality to Western levels. Expertise was transferred from around the world to accelerate the change process and senior people in the organization that had been taken over were replaced by younger and more promising talent. ABB wanted quick results and its experience indicated that most acquisitions in Central Europe could be turned around in about two years. Both ABB and General Electric controlled markets because they had superior technology, although the Tungsram acquisition faced initial difficulties in selling the products that it manufactured. In general, newly acquired firms had to make significant improvements in their marketing organization, place a great emphasis on quality control, enhance management systems and undertake major internal reorganizations to succeed in turning around acquisitions in Central Europe. New human resource policies, involving better compensation and care for the employees and an emphasis on training was also important for success, along with the elimination of uncompetitive product lines (Brada, 1998, Pp. 14 – 24). Managerial remuneration and prestige was considerably enhanced and a distinction had to be made between production and strategic decision making. Corporate governance had to be shifted from workers to managers and owners and this was indicated by the formation of General Electric Hungary Inc which assumed broad management of the entire General Electric investments in Hungary. The future was more important then the present or the past (Perlaki, 1998, Pp. 3 – 17). Having a vision and an understanding of the dominant driving forces including demand for products, supplier – buyer relations, purchasing power of population and international aspects of business were important for success. At least initially, efforts had to be made to ship production outside Central Europe because the local economies could not purchase what had been produced and this resulted in a U – shaped industrial output (Repkine, 1998, Pp. 1 – 10). General Electric did succeed brilliantly and its success in working ethically for Hungary is indicated by its former Tungsram lighting plant in Hungary winning the national award for sustainable development in 2006 (The European Commission, 2006, Pp. 3). However, the new challenge from China based manufacturers of lighting equipment is now posing new challenges for General Electric Hungary Inc (Appendix A – The General Electric Hungary Case). General Electric had to restructure and optimize its Tungsram operation by enhancing quality, improving corporate culture and putting in place a system for fair rewards for the workforce. However, forces of change in the global business environment have resulted in Chinese exports effectively competing with its lighting products in Europe. Some of the options available to General Electric to counter this threat include use of even lower production factor countries, development of higher quality products or the use of more automation to make its products more competitive against the China threat. The only clear option that is realistic is to try and use more automation to reduce the cost of production and to enhance quality so that the Chinese imports are uncompetitive. Moving to an even lower factor cost country is likely to cost far too much after the decision to acquire Tungsram Hungary has already been taken and thus such a move is now unrealistic. Conclusion From the previous discussion it can be concluded that the formulation of strategic management plans by multinationals involves a very careful study of a large number of variables and risks. It is important to formulate strategy by considering the global players and competitors, otherwise in an era of free trade, competitors from even lower factor cost countries can threaten what had been built with great difficulty. Bibliography / References 1. Akbar, Yusaf H and McBride, Brad J. 2004. Multinational enterprise strategy, foreign direct investment and economic development: the case of the Hungarian banking industry. Journal of World Business 39 (2004) 89–105. Retrieved: December 22, 2006. From: http://www1.uni-hamburg.de/Kapitalmaerkte/download/FerencikovaIV.pdf 2. Akbar, Yusaf H. 2005. Shifting Competitiveness, Evolving MNE Strategies and EU Enlargement: The Case of Hungary. University of Miami. Retrieved: December 20, 2006. From: http://www6.miami.edu/eucenter/akbarfinal.pdf 3. Arthur D. Little. 2006. Timeline. Arthur D. Little. Retrieved: December 21, 2006. From: http://www.adlittle.com/about/timeline/# 4. Brada, Josef C. 1998. Management 101: Behavior of Firms in Transition Economies. University of Michigan Business School. Retrieved: December 22, 2006. From: http://wdi.umich.edu/files/Publications/WorkingPapers/wp133.pdf 5. Canestrino, R. 2004. Cross-Border Knowledge Transfer in International Strategic Alliances: From Cultural Variations to Asymmetric Learning Process. Proceedings of I-KNOW ’04 Graz, Austria. June 30 - July 2, 2004. Retrieved: December 20, 2006. From: http://know-center.tugraz.at/previous/i-know04/papers/canestrino.pdf 6. Comisso, Ellen. 1998. "Implicit" Development Strategies in Central East Europe and Cross-National Production Networks. BRIE, University of California San Diego. Retrieved: December 22, 2006. From: http://brie.berkeley.edu/publications/WP129.pdf 7. Cullen, John B & K Parboteeah, Praveen.2005. Multinational Management: A Strategic Approach 3rd Edition. Southwestern Publishing. Retrieved: December 20, 2006. From: http://www.swlearning.com/management/cullen/mm3e/student_resources.html 8. Decoene, V and Bruggeman, W. 2003. Strategic alignment of manufacturing processes in a Balanced Scorecard-based compensation plan: a theory illustration case. University of Gent. Retrieved: December 20, 2006. From: http://www.feb.ugent.be/Fac/Research/WP/Papers/wp_03_200.pdf 9. DFAT, Australia. 2006. Hungary Country Brief. DFAT, Australia. Retrieved: December 20, 2006. From: http://www.dfat.gov.au/geo/hungary/hungary_brief.html 10. Fay, Carl F and Beamish, Paul W. 2000. Organisational Climate Similarities and Performance: International Joint Ventures in Russia. Stockholm School of Economics in St. Petersburg. Retrieved: December 20, 2006. From: http://www.sserussia.org/materials/wp/wp99-101.pdf 11. Feher, J. 1998. The Application of Change Management Methods at Business Organizations Operating in Hungary: Challenges in the Business and Cultural Environment and First Practical Experiences. University of Michigan Business School. Retrieved: December 22, 2006. From: http://wdi.umich.edu/files/Publications/WorkingPapers/wp198.pdf 12. Gorowitz, B. & Schenectady Museum. Hall of Electrical History 2000, The General Electric story: a heritage of innovation 1876-1999 / [Editor-in-chief Bernard Gorowitz], 3rd ed., [rev. and updated] End. Schenectady, N.Y.: Schenectady Museum. 13. Halpern, L and Korosi, G. 1998. Corporate Structure and Performance in Hungary. The University of Michigan Business School. Retrieved: December 22, 2006. From: http://wdi.umich.edu/files/Publications/WorkingPapers/wp187.pdf 14. Hamar, J. 2002. FDI and Industrial Networks in Hungary. University College London. Retrieved: December 20, 2006. From: http://www.ssees.ac.uk/publications/working_papers/wp13.pdf 15. Hitt, Michael A. 2001. Strategic Management: Competitiveness and Globalization. South Western Publishing Company. 16. King, Lawrence P. 1997. Strategic Restructuring: Making Capitalism in Post Communist Eastern Europe. University of Michigan Business School. Retrieved: December 22, 2006. From: http://wdi.umich.edu/files/Publications/WorkingPapers/wp190.pdf 17. Lemoine, Françoise. 1998. Integrating Central and Eastern Europe in the Regional Trade and Production Network. BRIE, University of California Berkley. Retrieved: December 22, 2006. From: http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1080&context=uciaspubs/research 18. Lewellen, Wilbur G, Long, Michael S.1999. Financing strategies in transitioning economies. Multinational Business Review. Fall 1999. Retrieved: December 22, 2006. From: http://www.findarticles.com/p/articles/mi_qa3674/is_199910/ai_n8858262 19. Mockler, R. J. 2002. Multinational Strategic Management: An Integrative Entrepreneurial Context-Specific Process. The Hawthorn Press Inc. Retrieved: December 20, 2006. From: http://www.haworthpress.com/store/SampleText/4586.pdf 20. O’Neill, J et al. 2003. Meeting Globalization Right: Meeting the Challenge of the Century. Goldman Sachs. Retrieved: December 20, 2006. From: http://www2.goldmansachs.com/insight/research/reports/docs/GloCo-July-2003.pdf 21. Pearce, Robert. 2006. Globalization and development: an international business strategy approach. Transnational Corporations, Vol. 15, No. 1 (April 2006). Retrieved: December 22, 2006. From: http://www.unctad.org/en/docs/iteiit20061a3_en.pdf 22. Perlaki, Ivan. 1998. Building Successful Companies in Transition Economies. University of Michigan Business School. Retrieved: December 22, 2006. From: http://wdi.umich.edu/files/Publications/WorkingPapers/wp193.pdf 23. Pournarakis, Mike and Varsakelis, Nikos C. 2002. Foreign Direct Investment in Central and Eastern European Countries: Do Institutions matter? EIBA Annual Conference, December 2002, Athens, Greece. Retrieved: December 22, 2006. From: http://www.aueb.gr/deos/EIBA2002.files/PAPERS/I21.pdf 24. Radosevic, S. 2001. “European Integration and Complementarities Driven Network Alignment: The Case of ABB in Central and Eastern Europe” University College London. Retrieved: December 20, 2006. From: http://www.ssees.ac.uk/publications/working_papers/wp12.pdf 25. Repkine A and Walsh, P. P. 1998. European Union Trade and Investment Flows U – Shaping Industrial Output in Central and Eastern Europe: Theory and Evidence. The University of Michigan Business School. Retrieved: December 22, 2006. From: http://wdi.umich.edu/files/Publications/WorkingPapers/wp163.pdf 26. Richet, X. 2001. TRANSFORMING ECONOMIES, TECHNOLOGY TRANSFER AND MULTINATIONAL CORPORATIONS STRATEGIES. Russian – European Center for Economic Policy. Retrieved: December 20, 2006. From: http://www.recep.ru/phase4/en/rp/xrichete.pdf 27. The European Commission. 2006. European Business Awards for the Environment. The European Commission. Retrieved: December 20, 2006. From: http://ec.europa.eu/environment/awards/downloads/press_dossier2006_en.pdf 28. Tichy, N. M. & Sherman, S. 1996, Control your destiny or someone else will: how Jack Welch is making General Electric the worlds most competitive corporation London: HarperCollins. 29. Várhegyi, E. 2002. Hungary’s banking sector: Achievements and challenges. EIB Papers. Volume 7 No 1 2002. Retrieved: December 20, 2006. From: http://www.eib.europa.eu/Attachments/efs/eibpapers/y02n1v7/y02n1a04.pdf 30. Wang, Z. Q. 1992. Foreign Investment in Hungary: Experience and Prospects – A Global Survey. University of Liverpool. Retrieved: December 20, 2006. From: http://www.liv.ac.uk/history/research/ceg_pdfs/Book9.pdf Appendix – 1: Identification of Case Issues Issue Justification of Issue 1. GE needs to recognize the optimal This issue is important because GE, just like investment in the best possible way. any multinational needs to be able to consider and use all relevant considerations in deciding on a suitable investment. 2. GE needs to appropriately restructure This issue is important because any suitable its acquisitions to fit with its operations. addition to GE portfolio needs to be aligned to GE’s corporate strategy and a restructured organization has to emerge with a capacity for profitability, quality and productivity. 3. GE needs to build a new corporate This issue is important because GE needs to culture for its acquisitions and to ensure that it instills positive values and constantly enhance this culture. competitive working conditions in its operations. 4. GE needs to constantly respond Globalization is associated with rapid to a changing global scenario. change and thus GE needs to constantly tune its acquisitions to respond to the changing forces of global competition. 5. GE needs appropriate organizational Organizational controls make it possible controls. for a distributed multinational to synergize its operations. In this essay, only two of the issues that GE had to confront in regard to its Hungarian operations are discussed. These issues include the manner in which GE ought to recognize appropriate acquisitions and how it needs to optimize these acquisitions in a rapidly changing global business environment Appendix – 2: The General Electric Hungary Case Read More
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The main purpose of this paper “The Story of general electric” is to examine and critique the performance of general electric in the society both on the positive and negative aspects.... general electric (GE) is one of the major U.... rdquo;8 general electric based on its program is bringing innovation by the use of its people, expertise and technologies as a dimension of its social performance.... The company was founded in 1892 through the merging of two electric companies....
6 Pages (1500 words) Case Study

Electric Engineering

This paper "electric Engineering" discusses some existing facts about nuclear energy and then discuss whether this source of energy has a future or not.... More than half a century now, nuclear energy has been producing commercial electricity in various countries.... hellip; Most Europeans are looking into plans of phasing out the existing nuclear plants replacing them with alternative sources of non-renewable energy....
7 Pages (1750 words) Case Study
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