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Why General Motors in China Performs More Successfully Than It in America?

Autor:   •  March 28, 2011  •  Essay  •  3,068 Words (13 Pages)  •  1,476 Views

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Abstract: One of the world's biggest automakers, General Motors faced its bankruptcy in US on June 10, 2009. However, its subsidiary company in China achieved its best feats on the other side of the earth. How come the same company performed so differently in two different domains? These are specials for General Motors. What makes Chinese GM so successful? Beyond its managerial structure and its smart work ethics, the Chinese macroeconomic environment, the cross-functional knowledge management, Chinese monetary evaluation and the social stature all play an important role. What's the main contributor for US GM's failure? Its cumbersome structure and insular culture affect greatly.

Key Words: General Motors, Cross-functional knowledge management, Chinese Monetary Evaluations, Organizational structure and culture

1. Introduction

1.1 General Motors in China

The auto industry is no exception. General Motors has had a presence in China since the 1920s, exporting American-made cars, chiefly of the Buick line, to China. In 1997 GM partnered with Shanghai Automotive Industry Corporation, a Chinese government owned corporation, to establish Shanghai GM. Shanghai GM specializes in producing automobiles for the Chinese market, though it also exports autos to other countries.

1.2 Performance of GM in China

There is no question whether GM-China has outperformed GM-United States in the last decade. During prime recession in 2008, US faced record high unemployment rate and a distressed financial system, GM-China was virtually unaffected by what was occurring around the world and continued to excel in sales and revenue outperforming last year's numbers. While GM-US collected bailout funds from tax-payer dollar to reorganize and rethink a new company vision and strategies to become major competitor in the auto industry, GM-China became the leading auto-mobile manufacturer in China exceeding the closest competition by sales of more than 200,000 cars and annual growth of 10.3 percent from last year.

It is the very least to say that GM-China under SAIC (Shanghai Automotive International Corporation) has pulled off a great feat by performing so effectively in these uncertain economic times, it is nothing short of a miracle that they have managed to sell more cars and generate higher revenues in the last few years when many other companies were simply trying to break even or resist filing bankruptcy. Due to the startling facts mentioned above, we need to look deeper into other factors that go beyond Organizational structure and culture that has helped GM-China to perform so aggressively and effectively. There are several other factors that contribute to the success of Shanghai Automotive International Corporation aside from the core factors mentioned

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