Introduction
Multinational corporations experience numerous challenges when operating in foreign countries. These are fronted by macro environmental disparities between the two concerned states (home and foreign). This paper discusses General Motors (from the USA) with regard to its business operations in China. It is evident that both countries are quite different in the realms of their macro economical, political, legal, cultural, and societal factors. These disparities have major potentials in dictating the fate of GM in its international outlets, global presence, marketplace visibility, and profitability. The paper equally determines how the mentioned factors vary for GM both in the US and China. Consequently, such factors have affected the management of GM (in China) in various contexts including its operations, growth, and profitability. It is crucial to consider such factors critically on business grounds.
Macroeconomics
It is evident that the economy of the US is far much different from that of China. As at 2011, the USA and China had a GDP of $15.094 and $7.298 trillion respectively indicating the mentioned macroeconomic disparity. Due to this, GM has to operate tactically in China while considering the aspects of economic hitches within the country. Its business’ strategies and operations must change significantly in order to adopt and survive in the Chinese market. Economic aspects affect numerous businesses in a considerable manner. It dictates the volume of production, sales as well as the ultimate profitability. Evidently, it is expensive to establish an automobile company; thus, it must be favored macro economically in the concerned foreign countries so as to recover the costs it incurred on installations, operations, and management. Since China is known for manufacturing cheap products (automobiles included), this might create a massive macroeconomic hindrance to GM in the Chinese market. Consequently, the company has to restructure its products, operations, promotional strategies, and management tactics in order to remain relevant, competitive, and cost effective in the Chinese market. Precisely, the management aspects of GM are quite different in the Chinese market.
Politics
Political aspects of both countries differ remarkable. The ways through which the USA handles her political provisions differ considerable with that of China. This relates to the business provisions and other political restrictions that the business might face in the foreign territory. Consequently, GM has enacted critical managerial provisions in order to abide by the political demands of China. Since the company is not operating in its home country (the US), it must observe the political aspects of China and adopt them for its own good. This is only achievable through managerial mechanisms relevant to China in the political contexts.
Regulatory
Countries have different legal provisions governing foreign businesses within their territories. The laws that govern GM’s operations in the US differ remarkably from those of the Chinese government. This has forced GM to enact managerial practices that will adopt and embrace the legal requirements of China in order to survive in the very market. The laws that govern foreign businesses differ substantially from one region to the next. China has stringent laws for the foreign firms compared to the local ones. This refers to the policies on environmental protection, business provisions, taxes, and other legal rights. Consequently, it is necessary for GM to abide to the China’s laws in order to remain relevant in the region.
Cultural
The culture of the Chinese people differs considerable from those of the US citizens. This different is able to affect the GM’s survival in the Chinese market in case the organization is not well-managed and lacks critical, managerial, social, and tactical provisions in its promotional endeavors. The marketing aspects of the business must observe these factors so as to allow the company achieve its business objectives with precision. Managing the cultural diversities within the workforce is an important consideration in this context. Since GM has a workforce, which includes people from various racial and cultural backgrounds, the management has to enact good managerial practices that will embrace cultural diversity.
Social
Similarly, the Chinese social aspects differ remarkably from those of the US. This similarly forces GM to reconsider its managerial, operational, and business strategies to ensure that the organization attains its tactical business objectives despite the challenges. Chinese people have different social life influenced by their cultures and other relevant factors. This is an important provision that GM must observe in its endeavors. Evidently, the social trends of a country determine the buying capability of her natives. This is a critical factor in the GM’s context. The social life of most Chinese people differs from those of the US people. Nevertheless, this has not affected GM’s performance in the Chinese market. It adopts critical managerial mechanisms in order to realize any remarkable market visibility and other considerable factors in the motor vehicle industry.
Conclusion
Multinational businesses experience varying challenges in foreign countries. This ranges from political issues to cultural provisions. GM has endured to survive in the Chinese market by restructuring its managerial provisions to match those of the Chinese people. This has considered the aspects of culture, societal, moral, and macroeconomics among other lucrative provisions.