General Electric's global health initiative in Africa and Latin America

International

Visit General Electric's corporate website: www.ge.com. In the company's citizenship section, research a GE produced report on one of its global initiatives. Summarize in detail the project's initiative. Discuss the potential positive and negative effects of the GE project on both GE and on the country in which it is located.

One of GE's global initiatives is that of Developing Health Globally. This program began in 2004 with a twenty million dollar investment in rural African communities. Since then it has grown to a five-year, thirty million dollar commitment that reaches eleven countries in Africa and Latin America. The program reaches out to hundreds of thousands of people who are in need (Citizenship, 2011).

This program is an example of the company's sustainable approach to philanthropy. In Ghana their volunteers work hard to build relationships and make sure that they improve healthcare in rural communities. Besides providing medical equipment they provide and install water, power and communications systems in order to address the gaps that exist in rural hospitals there. They also work closely with local healthcare teams in order to strengthen their sense of ownership (Citizenship, 2011).

There are a lot of positive effects that this program has on the countries in which they carry it out. This program allows for the people in these countries to receive the medical care that they desperately need. It provides them with medical equipment as well as infrastructure that allow their hospitals and healthcare providers to better deliver care. The underprivileged countries that this program helps would not otherwise have access to any of the equipment and services that it provides. It definitely helps their citizens to live happier and healthier lives. The only negative that might be seen is that of the expense for GE that exists with providing such a program. But this is not really a negative since a company with good corporate citizenship should give to communities that are less fortunate in the whole scheme of things.

2. Summarize the positive and negative aspects of offshoring, and state whether you support or are against offshoring and why. Include an experience that you or someone you know has had in which off shoring affected them positively/negatively.

Contracting out business activities to foreign providers, or what has come to be called offshoring, has been going on for a long time (Daniels, Radebaugh & Sullivan, 2011). By itself, offshoring is not as new a phenomenon as the feeling one may get from its current attention in the public media. The phenomenon, though, appears to have entered into a new stage with offshoring of services becoming more and more significant. This change in arrangement has been happening for some time, and is generally credited to the interaction between technological advances, economic and competitive pressures to decrease costs and advance productivity, and institutional developments favoring trade liberalization (Olsen, 2006).

Those who are in opposition to offshoring claim that there is a negative impact on wages and employment. It is felt that Americans are loosing their jobs at a high rate because jobs are being moved overseas. However, supporters of offshoring argue that the phenomenon has long-term financial benefits, and that it ultimately will increase living standards in some countries by way of positive productivity effects and decreases in factor expenses (Olsen, 2006).

I do not agree with the process of outsourcing. I believe that American companies should do business in America. There are plenty of people in this country who are out of work and need the employment. Besides the fact that good jobs are being lost I also feel that in a lot of cases quality suffers as well. The one experience that I have had with offshoring has to do with getting customer service help from certain companies. There is nothing worse than calling a company for help and being connected to someone who either speaks no English or has such a heavy accent that you can't understand them at all. Companies should not offshore their first line of contact between themselves and their customers.

Unit 3

1. How much of Walmart's success is due to NAFTA, and how much is due to Walmart's inherent competitive strategy? Discuss some of the positive effects of Wal-Mart's success in Mexico and some of the negative effects. Faced with going out of business, what steps did Comerci take to remain competitive? What other steps do you think Comerci should take to secure its future and further compete with Wal-Mart's operations in Mexico?

A lot of Walmart's success is due to their inherent competitive strategy. Walmart is known for their slogan of Every Day Low Prices which has done very well for them in the United States. Because of the size and volume of purchases that Walmart makes they are able to negotiate with suppliers to lower prices to acceptable levels. They also work closely with their suppliers on inventory levels using a system that informs suppliers when purchases have been made and when they need more inventories (Daniels, Radebaugh & Sullivan, 2011). They brought a set of superior management techniques and technologies with them that have help tremendously (Tilly, 2005).

Walmart's success in Mexico has been phenomenal. They are the biggest retailer in Mexico and own more than half of all retail sales. They have captured fifty-five percent of the Mexican retail market and have become the largest private employer with one hundred and forty thousand employees. The side effects from this success are that competitors are finding it very hard to keep up with them (Daniels, Radebaugh & Sullivan, 2011).

One of these competitors is Comerci. Faced with the possibility of going out of business Comerci decided to merge with two other struggling companies, Soriana and Gigante, in order to form a purchasing group that would be able to negotiate better bulk prices from suppliers (Daniels, Radebaugh & Sullivan, 2011). On top of putting themselves in a better position to negotiate prices with their suppliers they also need to more their inventory structure more towards one like Walmart has with their just in time philosophy (Hayes, 2010). This structure allows them to always have the right amount of inventory when they need it.

2. What are the principal regulations or practices of nontariff quantity controls instituted by governments that affect imports and exports? Why are these practices or regulations implemented? Do you feel regulations and controls should be increased/decreased? Support your perspective with rationale, evidence, and/or examples.

The principal regulations and practices that nontariff quantity controls by governments include: quantitative restrictions, tariff quota, voluntary export restraints, orderly marketing arrangements, export subsidy, export credit subsidy, government procurement, import licensing, antidumping duties and technical barriers to trade (Mehta, 2005). Import controls are used to augment consumer prices because there is little inducement to use price as a means of growing sales. In the case of import tariffs the gains from price increases to consumers are received in the appearance of government revenue in the importing country. Export controls on the other hand are put into practice to make sure that domestic consumers will have an adequate supply of goods at a low price, to avert exhaustion of natural resources, or to try to raise an export price by limiting supply in foreign markets (Nontariff barriers: Quantity controls, 2011).

Regulations and controls on importing and exporting should be increased so that there is better control on the things that are coming in and going out of the country. Even though trade is a very important aspect of the countries make up (Exporting and Importing, 2011) it is very important that this practice be regulated to make sure that they right products are going out and coming in. This is not only vital to our economy but to our national security as well, particularly on what is coming into the country. That last thing that we would want is for other countries to be able to ship whatever they wanted into our country with no one monitoring that practice. This could end up being very dangerous to the country as a whole. These practices of importing and exporting definitely need to be heavily regulated for everyone's safety.

Unit 4

1. Assume the role of a CFO of a mid-sized company that exports to Europe. Your company received a contract to supply components to a German manufacturer. Discuss the various approaches available to help you accurately forecast exchange rates. Identify the implications of exchange-rate changes on the company's marketing, production, and financial decisions.

The two most frequently used methods for forecasting exchange rates are the fundamental approach and the technical approach. The fundamental approach forecasts exchange rates after taking into consideration the factors that give rise to long-term cycles. Basic data related to a country, such as GDP, inflation rates, productivity indices, balance of trade and unemployment rate are all taken into account. This approach is based on the principle that the true worth of a currency will ultimately be realized. The technical approach is based on the principle that it is investor emotion that determines changes in the exchange rate and makes predictions by charting out models. Other tools frequently used in this approach are positioning surveys and moving-average trend following trading rules. Fund managers regularly use these patterns to take informed decisions for short-term investments (Exchange Rate Forecast, 2010).

Exchange rate risk affects both revenues and costs, which in turn affects a company's marketing, production, and financial decisions (Shapiro, n.d.). If a company's revenues are down then they might find themselves with less money to produce and market their product or service. If a company cannot produce or market their product or service they will probably not remain in business for very long. This is why it is so important to make financial decisions based upon a good model for forecasting exchange rates. A company's bottom line and ultimately their continued success rely heavily on their capability to have enough money to produce products and market them. A company that has no money to manufacture and market their products will most likely not have enough money to remain in business for very long.

2. Research a recent article on the International Monetary Fund (IMF); perform an online search for an article that is at least 2-3 pages in length. Read the article, and think about how the topic relates to the concepts discussed in Chapter 10. Write a brief summary report (1 page), and discuss how the article relates to the IMF's position of influence on individual nation's economic policy.

The International Monetary Fund opposes EU projections on Greece's debt sustainability and wants to wait until a clearer outlook comes out before signing off on the next part of financial support to Athens. The IMF believes the EU's debt projections are too hopeful and wants to wait until after a euro zone summit to see if deliberations there produce a clearer picture on how the debt levels can be made more sustainable. If the summit agrees on a deeper participation by the private sector in helping decrease Greece's debt burden that may make the debt stock, which stands at around 360 billion Euros, more sustainable and allow the IMF to sign off on the release of the next part of the deal. In July the private sector agreed on a charitable basis to take around a twenty-one percent cut on its Greek debt holdings, helping decrease the debt burden by around fifty billion Euros between now and 2014. Nevertheless, that is now considered insufficient by some countries and there is a push to sharply increase the private sector's donation, even if it is not done freely (EU and IMF at odds on Greek debt sustainability, 2011).

The IMF was established in order to endorse international monetary cooperation by maintaining fixed exchange rates among the currencies of different nations. To accomplish this, the Fund was to make short-range loans to nations which had provisional balance of payments deficits; the net imports of the country exceeded its net exports. The short-term loans, normally three to five years would in all probability allow a nation to recover from its disproportion without having to resort to devaluing its currency (Ewert, n.d.). In the case of Greece, the IMF is waiting to make sure that the increased involvement of the private sector will indeed help the overall economy and make it more sustainable. If it can be shown that this is a step in the right direction then they will be willing to release more money.

Unit 8

1. Briefly identify the steps of an exposure management strategy. Describe and evaluate Dell's exposure management strategy. Identify some programs or strategies that management of Dell Mercosur could implement to provide it with operational hedges?

Exposure management strategy involves four steps. The first is forecasting the degree of exposure in each major currency in which the company operates. The second is developing a reporting system to monitor exposure and exchange rate movements to assist in protecting the company from risk. The third step is assigning responsibility for hedging exposure and determining whether to centralize or decentralize exposure management. The final step is selecting appropriate hedging tools including diversification of the company's operations, a balance sheet hedge, and exposure netting (Managing Transaction Exposure and Economic Exposure, n.d.).

Dell's exposure management strategy included forecasting transactions and firm commitments in the foreign countries in they operated. The company monitors it foreign currency exchange exposures in order to make sure that the overall effectiveness of its foreign currency hedge positions. Dell uses purchased option contracts and forward contract designated as cash flow hedges to protect against the foreign currency exchange risk inherent in its forecasted transactions dominated in currencies in other than the U.S. dollar. The company also uses forward contracts to economically hedge monetary assets and liabilities, primarily receivables and payables that are denominated in a foreign currency (Daniels, Radebaugh & Sullivan, 2011).

Another strategy that Dell could use is deployment of excess capacity. Investing in capacity in excess of the aggregate demand forecast provides flexibility in coping with demand uncertainties. Additionally, it focuses on the alternative to put off the commitment of resources together with the option to switch among different production locations (Boyabatl & Toktay, 2004).

2. What individual characteristics and qualifications should the company consider when choosing managerial candidates for the foreign assignment? Using the list of candidates identified in the case study, who do you believe the committee should nominate for the assignment? Please state your rationale for your recommendation

People who want to work on foreign assignment must have some general skills in order to be successful. These skills include: a multidimensional perspective, proficiency in line management, prudent decision-making skills, resourcefulness and the ability to build a team (Six characteristics of a successful expatriate, 2011).

Based on the candidates identified in the case study the best candidate would be that of Brett Harrison. Brett has experience in both running line activities and supervising staff. He has spent some time working in the Asian regional office and has regularly toured the Southeast Asian operations. He is well acquainted with the geography, the politics, the customs and the outlooks of where he would be going, giving him a very multidimensional perspective. Brett has established relationships with many expatriates in the Bengualuru region that he could use as resources if he were to be working in the area. Based on the fact that his current supervisors consider him highly competent and poised to move into upper-management he obviously has prudent decision-making skills and the ability to build a good team. He has already proven himself to be an excellent employee.

Overall Brett appears to be the most well rounded candidate of the group. He has the skills that are necessary to make a person successful on a foreign assignment. He has proved that he is capable of managing a team. He has experience with the region in which he would be going and has already established resources that he could use to help his transition to the new work environment. His family appears that they are also experienced with the region and would more than likely make a smooth transition into the new living environment.