WHY GE INVESTED SO AGGRESSIVELY IN FOREIGN EXPANSION
GE’s was already known in international business. Its main goal was either to be the largest or second largest participant in every business in which it is involved. They want to tap into global marketplace for economic improvement and lead a giant organization to reach millions of customers.
When GE saw the opportunity to buy companies from various countries that facing financial difficulties, they took the chance to enter in global marketplace at discounted rates. To expand its company aggressively, CEO Jack Welch authorizes the foreign direct investment strategy.
GE has offered financial solutions to the struggling companies from various countries and gains more global influence and attention. They acquired companies from other countries that having financial difficulties and make the most out of the situation.
• GE took advantage of the economic weakness in Europe from 1989 to 1995, invested of $17.5 billion in the region. But acquired of some 50 companies from its investment.
• To take advantage of purchasing companies during the economic uncertainty due to crisis in the Asian currency markets in 1997-1998.
• Spending of $15 billion in just six months on helping the process of development in Japan with an aim of benefiting profits in return.
In later, GE earned over 40 percent of its revenues from international sales by the end of 2001.
GE’s TRYING TO ACHIEVE BY MOVING SOME OF THE HEADQUARTERS OF ITS GLOBAL TO FOREIGN LOCATIONS
GE CEO Jeffrey Immelt states that they want to be the center of the community who shares their ambitions (Scott, 2016). GE firmly believes that to succeed internationally, it must be close to its customers. These moves give advantages to the foreign locations as well to the United States.
Moving GE’s headquarters to foreign location definitely gives benefit to boosts its struggling economies by hiring citizens to work for the GE in that division area. Some foreign countries suffered from lower wages, which working with GE could give those better paying jobs and fair treatment.
GE’s moves benefitting to the United States, it allows their Executives in a foreign division to have an easier flights to neighboring countries and so get an access to flights all over the world. Hiring local citizens from the foreign countries apart from moving to its foreign land and getting closer to the customers, it provides deep understanding about their language, culture, and work ethics.
Recruitment process for local citizens is easier to get done in its local country, while combining workforce with other expatriates create balance to establish global and local needs. GE have also reacquired better knowledge of innovating designs of product and service which are more suitable to foreign local needs or expectations.
Moreover, moving in international business bring GE’s into much a bigger name. While growing in global business it favorably allows GE to become a more reliable brand and trusted by U.S. people and increases its sales in U.S. division.
GOAL BEHIND TRYING TO INTERNATIONALIZE THE SENIOR MANAGEMENT RANKS AT GE
MEANS TO INTERNATIONALIZE THESE RANKS.
Internationalizing the senior management ranks is to diversify the work environment and improves productivity. There will be no favorable treatment to a particular culture because managers with previous international experience are people oriented and can understand the cultural differences.
GE simply keeps the intention of globalizing business and bringing their people much closer to different places of the world. These ranks could nurture relationships with associates and friends, be knowledgeable about economic and political issues around the world. They could create a unique ability in exploiting market niches, increase knowledge in innovating products and services, and other beneficial experience that can achieve working internationally (Cabrera, 2012).
Internationalizing senior management will act as a bridge to connect with communities; ability to be closer to the customers and understand their needs. They could represent GE business in international market place, have very much ability to be trusted by its customers through the influence of its ranks and file.
THE NATURE OF TRUE GLOBAL BUSINESS OF GE
A very act of true global business of GE is when the company moves their business headquarters to different parts of the world. They did an effective strategic way of expanding businesses from US to some parts in Europe then get an access to be closer to Asia. GE brings the operational works with foreign local people and customers, and dramatically improved their products as they designed equipments that are best suited to local needs.
They have invested a strong foundation in every country they work with through financial aid support, hiring its local people, and innovating their products and services according to the preferences of local customers.