Chapter 9 China-The Future of Genoral Motors? It\'s been a rough ride for Genera
ID: 326543 • Letter: C
Question
Chapter 9 China-The Future of Genoral Motors? It's been a rough ride for General Motors. In 2008, GM's remarkable run of 77 years as the world's largest automaker came to a crashing halt. In 2009, after a decade of mismanagement and declining sales, the company declared bankruptcy and needed a massive govemment to stay afloat. During that time, more than 2,000 dealers were closed for good, and almost 23,000 employees were released. There is some hope that the new, streamlined GM, featuring new models, will regain its once-dominant position in the U.S. auto market. However, it is becoming increasingly clear GM's future may lie in China. bailout and thorough reorganization were 13.6 million cars sold in China, an increase of 46 percent from 2008, and nearly 3 million more cars than were sold in the United States at the same time. In 1977, there were just 1 million cars in China; as of 2008, there were 51 million, and it's conservatively expected the Chinese auto market will grow 10-15 percent every year. Unlike in the United States, GM hasn't been stuck on the sidelines in China. It sold 1.83 million cars in 2009, an increase of 67 percent over the previous year, and has a solid record of 15 consecutive months in which its sales have grown by double digits. By 2016, GM hopes to sell 3 million cars per year in China. This would not only make GM the largest auto seller in China, but it would make China GM's largest and most lucrative market. in China as part of a joint venture with the SAIC Motor Corporation. Through the Currently, GM operates partnership, GM owns a minority stake in two companies, SAIC-GM-Wuling and Shanghai General Motors. Increasingly, however, you've heard your GM colleagues argue a new needed, one that will give the company a stronger presence in China, and decrease its dependence on the U.S. market. A group of these managers has come to you to seek out your opinion on how GM can organize to best take advantage of shifting conditions in the global auto market Questions: organizational design is The text describes a number of different approaches concerning organizational structure, which do you think would be ideal for GM's success in China? Which of the structures would help GM expand to other foreign markets? 1· What are the advantages and disadvantages of promoting decentralization in GM's operations in China? 2. 3. How would you design this organization?Explanation / Answer
In order to expand in the foreign market, company should have the same structure. His is because the expansion having certain risks such as political, economic, geographical, technological, legal and environmental. So, to understand in advance the company should have joint venture with the other local existing company of that particular country.
The disadvantages of promoting decentralisation in China are as follows:
3.This organisation would be designed in the similar way as the centralised one. The company top management have at the top positions which are joined for the venture i.e. GM Company and SAIC Company. Lower stages having Board of directors then Project Managers Then Appropriate project organisations and then finally external contractors and suppliers. The line of control here in two hands as there are two companies having collaboration.