Genral Electric's primary divisions include GE Capital, GE Technology Infrastructure (including GE Aviation, the former Smiths Aerospace and GE Healthcare), GE Energy Infrastructure, and NBC Universal. GE operates in a wide variety of markets including the generation, transmission and distribution of electricity, lighting, industrial automation, medical imaging equipment, motors, railway locomotives, aircraft jet engines, and aviation services. It offers a range of financial services through GE Commercial Finance, GE Consumer Finance, GE Equipment Services, and GE Insurance . GE has presence in over 100 countries and also one of the largest lenders in countries other than the United States, such as Japan. It was announced in May 2008 that General Electric would auction off its appliances business for a sale between $5-8 billion.
Economic Enviroment have a direct impact to a financial company with a manufacturing arm such as GE. Macroeconomic event such as the present economic downturn especially in the Banking Industry has an adverse effect on a financial services business like GE’s. Unfavourable economic event might force an MNE to alter or rethink its projected plan for entering a new market. A slowdown might make is difficult to raise capital for investments in new or existing business. Foreign government policy also impacts a company looking to do business and an unfavourable event might discourage future expansion.
Stakeholders like to see their equity value increase over time. A public MNE like GE is pressured from its investors to invest in projects or division which have a high Return on Investment (ROI). In pursuing the stakeholders objective GE is forced to restructure on its portfolio of Businesses and avail all its restructure options including selling off some of its loss making or low profitable businesses.
General Electric takes a global approach to foreign markets and production. GE continues to expand strongly overseas, sales outside the U.S. accounted for 53% of GE’s revenue for the second quarter of 2008. The company is headquartered in Fairfield, Connecticut and through its franchise and divisions GE operates in both developed and developing nations.
A Multinational Enterprise like General Electric’s faces Cultural shock as a result of the global expansion. There are culture variations in different parts of the world and for different parts of GE’s operations. In some areas, diversity will decrease as small cultural groups are absorbed into more dominant national ones. Some of the cultural barriers faced are Behaviour practices like preference of people for certain occupation, Motivation, Value systems, ideals, thinking systems, people knowledge, Language knowledge, work culture, foreign attitude, and transnational subculture seems to pose as cultural barrier to a MNE’s expansion and performing business.
India is a multicultural, diversified country with a vast availability of skilled labour. GE has been in India since 1902 though its GE Advanced Materials, GE Commercial Finance, GE Money, GE Consumer & Industrial, GE Energy, GE Healthcare, GE Infrastructure, GE Transportation and NBC Universal businesses.
In a foreign country a MNE considers the political and legal factors that would influence the managerial decisions. For the company to succeed, its management must carefully analyze whether its corporate policies will fit a desirable political and legal environment. India is a
India is a Coherent democracy, Pluralist or Secular politically, and hence many different ideologies coexist within it. The Managers from a MNE must determine how to articulate the firm’s interest and how to influence policy making.
When entering into a contract in India, it is important for a MNE Manager to understand which type of legal system (common law, civil law, and theocratic law) will establish the contract.
