Two considerable elements will stimulate globalisation (Daft 2007). First and foremost, the concept of market-oriented investment suggests that a company’s expansion capacity beyond its local frontiers will be fundamental in increasing profitability. Equipped with facilities in most corners of the globe, the GM brand is able to function effectively as a lone, collective and assimilated automotive giant. Evidently, General Motors have sold more cars outside the United States than within America itself (General Motors 2010).
Secondly, asset-oriented investment demands that human resources be exploited for the fact that they are not proportionate geographically. GM, being the perfect example of capitalising on this characteristic, has been attracting foreign talent into its diverse team for more than a decade. Expertise in the form of engineers and scientists have been scouted from North and South America, Europe, the Middle East, China, Taiwan, India, and Korea to satisfy the world’s growing hunger for developed automation. Being able to do that gives GM a phenomenal cutting edge in gaining access to resources anywhere in the world (General Motors 2010).
Producer-Driven Commodity Chain Globalization has been encouraged by industrial firms that have established a unique kind of international economic network that has been called producer-driven commodity chains (Clegg, Kornberger & Pitsis 2005). Producer-commodity chains are those in which large and usually, multi-national producers have central control in coordinating networks of production. This is characteristic of capital and technological intensive industries and the automobile industry is an example of this (Rothstein 2005).
In producer-driven chains, the manufacturers will specify to their retailers, usually the models they will ship over and the respective prices the dealers will pay (Rothstein 2005). Gereffi’s producer-driven variant can be associated with the internal and external networks emerging from large multinational producers, such as General Motors. Technology and production proficiency were core competencies that needed to be fostered and positioned in-house, or in highly associated ‘captive’ suppliers that can be prevented from sharing them with rival firms (Clegg, Kornberger & Pitsis 2005).
Institutional theory is described by Robbins and Barnwell (2006) as an avenue of assimilating an organisation’s preceding actions with societal and environmental influences on it to make sense of organisational procedures. This theory asserts that organisations are characteristically robust and will gradually be systemized into the environment by the conduct of the groups within the organisations and society which is foreign to it (Hatch & Cunliffe 2006). GM’s remarkable sense of corporate social responsibility, especially in the areas of being environmentally-friendly, is highly evident of institutional theory being put in place.
Today’s society has seen a growing consciousness over environmental issues that has been threatening to cease the world’s diminishing resources and potentially causing rising numbers of climatic disasters. Giant organisations such as Nike (Environmental Leader 2008) and McDonald’s (Green Peace 2003) have adopted to go green by using only environmentally-friendly materials in their footwear and refrigerators respectively, and GM is not alien to this approach. GM has committed itself environmentally in all aspects of its operations from the ways its vehicles are manufactured to the materials utilised in the production of its vehicles (General Motors 2010). This evidently highlights society’s take on the environment in institutionalising GM to grow into an environmentally-friendly organisation.
In summary, the paper has shown the multinational and multidivisional nature of General Motors and how these characteristics have provided the firm with comparative advantages in the global market, stabilising their stature in the Fortune 500 list. We also see that the relationship between General Motors and its environment is highly interdependent where their mutual influences have been depicted by examples of General Motors’ organisational practices through organisational theories. A significant learning point is that no organisation is an island in today’s world of intertwining business networks which spread across the globe. In order to excel, or even to survive, firms have to come to agreement with reality and seek means to adapt to such a situation. General Motors can indeed be an exemplary role model to other aspiring organisations.
Bordenave, G and Lung, Y 2003, The Twin Internationalization Strategies of US Automakers: GM and Ford, Retrieved 2 March 2010, from Research Library