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General Motors Company : an analysis

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  1. History.
  2. Environment.
    1. General environment.
    2. Stakeholders.
    3. Business environment.
  3. Institutional structure.
    1. Ownership.
    2. Governance.
  4. Corporate Strategy.
  5. Organisational profile.
    1. Organisational structure.
    2. Organisational systems.
    3. Organisational culture.
  6. Bibliography.

It is hard to imagine that General Motors, one of the leading car companies, occupying 15% of the automobile market and that in 2003 alone earned $3.8 billion on record revenue of $185.5 billion, was founded in the small town of Flint, Michigan, by an ingenious salesman and labourer, William Crapo Durants. Over the years, General Motors has come to represent more than a car brand name. It has come to represent a tradition, an American tradition, employing more than 325,000 people worldwide, and ranking third in international sales. From salesman to automobile pioneer, William Crapo Durants' business intuition led him to the successful production of two wheeled horse carriages until 1903, when Durant met a young inventor named David Dunbarr Buick, a Scottish expatriot. In this same year Durant made a quick decision to change from manufacturing carriages to cars. Buick and Durant founded the Buick Company, releasing their first charter on June 17, 1905. And so began the production of the first automobiles, which in 1908 took on the name of General Motors.

[...] Through the agreement with OnStar, General Motors disposes of such an external knowledge as to reduce the costs of intra-organizational training programs, thus enjoying "external economies of learning". Another case in which GM has benefited from the market has been with the joint venture with FIAT in order to share powertrains and components (GM owns a 20% equity). When using the market, it is mostly convenient to perform long term contracts in order to reduce to the minimum transaction costs (emerging from the incompleteness of all contracts), coordination and timing costs, as well as the building of trust and liability (trying to avoid opportunistic behaviours). [...]

[...] The two most important and largest subsidiaries are General Motors Acceptance Corp. and Hughes Electronic Corp. Strategy Boards coordinate the work and the business all over the world, while relationships with stakeholders are considered to be very important and handled with care, attention and kindness; for this purpose GM entered in relations with lots of various organizations, such as: CERES (Coalition of Environmentally Responsible Economies) BSR (Business for Social Responsibility) WBCSD (World Business Council for Sustainable Development) GRI (Global Reporting Initiative) For these reasons, stake-holders are valued in the choices the corporation makes. [...]

[...] Suppliers The suppliers of General Motors have a small bargaining potential since they provide the company with the raw materials that in the case of too high prices, GM would choose to buy from other suppliers at more convenient prices. In addition the threat of a supplier trying to integrate into the Auto Industry is very low. Potential Substitutes The presence of substitute's products is not a major threat for the Auto Industry where General Motors retains its core business. [...]

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