Daewoo General Motors International Case Essay

Q 1. What are the advantages and disadvantages of a hands-off, decentralized focussing approach?Advantages of decentralizationDecentralization will non work unless you sincerely delegate both responsibility and endorsement. This means that the final decisions must be made at that abase level. You just cant jam a decentralized system. It gets decisions closest to the level where the action really is. And it really does something for people. The executives are at a term essentially running line of descent of their own. The companyhas confirmed their authority by making it very clear it will non allow people dissatisfied with their decisions jump over to the home office. Finally, getting the decision-making push through of the home office creates something like a family feeling in the outlying(prenominal) location. People there begin to depend on each former(a).Disadvantages of DecentralizationThis means that the final decisions must be made at that lower level. Two things s tand in the way of this working. One isthat the people who now have the authority may not let go of it. The other is that the people at lower levels may not want to sham it. One of the problems, which decentralization aims to solve, is that the chief executive never has enough time to rally about the major problems affecting the future of the operation.Q2. How Can Daewoo full point Competitive with the Japanese ? motorcar industry is important to developing countries is this intensifier linkage. Most of developing countries selected auto industry as one of the summit elements for launching industrialization in the country. An independent auto maker and to be worldwide pop off ten as in Daewoos enormous range plan, with 3.5 million production indomestic (3.0 million) as well as in overseas plants (2.5 million) could not achieved without the achiever of globalisation.The leadership in domestic commercialize might be another important factor. Korean auto makers including Dae woo has tomeet the challenges from the Japanese auto industry in domestic merchandise from the beginning 2012. The severecompetition in world auto industry induces the forecasting that only global top ten auto makers could survive in near future. We need much time to see whether or not Daewoo could meet the success the globalization and how Korean car maker, Daewoo could getover the manifolds challenges to be a global auto maker & amp key to success is the policy of Globalization.Q.3 . What were some of the controllable and uncontrollable factors in this case? How should Mr. Kim have responded to those factors?Controllable factors Kim deserves the most credit for the pudding stone sign success and responsibility for its ultimate failure Despite Daewoos initial achievements, the financial crisis fully exposed the weakness of its concentrated governancestructure. The concentration in decision-making power proved fatal when the conglomerate faced a crisis and Kims busines s acumen, ethics and principles faltered. Returning to its roots, Kim viewed the crisis as an opportunity for Daewoo to expand, not retrench, by acquiring distressed companies and turning them around. Kims autocratic control yet centralized and decision-making suffered as a result of a generation transplant of his closest advisors. Kim had personally recruited many of these senior executives and they had grown together with the conglomerate expansion Until the mid-1990s, the key executives that surrounded Kim consisted of those that had been with him since Daewoos establishment.Uncontrollable factorsThe representative directors, boards of directors and statutory auditors of Korean conglomerates failed to fulfill their role as fiduciaries working on behalf of the interests of shareholders at large. They did not prevent controlling shareholders from taking advantage of non-controlling shareholders and other stakeholders as a result. Non-executive outside directors did not exist unti l they were required in 1998. This diminished potential checks and balances against the controlling shareholder Weak corporate governance of conglomerates and their ample network of companies had a devastating effect when the1997 financial crisis hit.Q4. What do you count of Daewoo Expansion into Europe? What are the advantages and risks for the company?AdvantagesDaewoos currently at the crossroads of its European expansion in the elevator car market. GM Daewoo has been self-made in managing to market essentially the same cars in many move of the world, particularly in the NorthAmerican and Japanese markets. Executives are wondering whether they should adopt more localized product level opment in Europe or not. attemptThe rebranding comes as GM seeks to make a comeback in the global auto market, after having been hit by the global financial crisis, complete the worlds biggest-ever initial public offering in November. Its reciprocal ohm Korean unit said that itwill drop the b adge GM Daewoo, relentless by negative publicity stemming from bankrupt South Korean automaker Daewoo Motor acquired by GM in the early 2000s. It will realize the Chevrolet brand for all of its new products this year. The company name GM Daewoo Auto & Technology Co will besides be replaced by GM Korea Company in the first quarter.Q 5. Why do you think GM acquired the company, while Ford did not?In November 2000, the Korean administration officially announced Daewoos bankruptcy and its assets were put on sale. Amid controversies and well a year of negotiations with the Korean government, GM signed a preliminaryagreement in September 2001 to buy Daewoos assets for $1.2 billion.Reason why ford did not acquired DaewooFord pulled out of its planned $7bn (5bn) takeover of Daewoo Motor, the struggling South Korean car maker, daysbefore a deal was due to be signed.Company said that it had not been possible to agree on proposals which were in the interest of both companies and its w ith drawal was a business decision.Ford, which has been conducting diligent inquiries, had sought to reduce its original $7bn supply ship to about $ 5bn to reflectdeterioration in Daewoo Motors assets.Daewoos creditors estimated in that the themes motor business had liabilities of $16.4bn, against assets of $ 10bn and as because company feels that Its a costly decision and at that time in 2000 Ford also suffering for its near bottom share prices.Q.6 What problems can GM-Daewoo expect in the future?GM prevalent Motors like many multinational automobile manufactures has made the decision to excel in many researchand development operations Although the countries relatively new political stage, increasingly stable economy and meliorate infrastructure has presented unique opportunities for increased foreign direct investment conducting business for the, quiet presents a number of unique challenges.General Motors was not the first or the last automobile manufacture to enter into glob al automobile market presenting the unique challenge of overcoming the unique conditions of global business practices while still maintaining competitive advantage.Lowered tariffs for automanufactures has cause an influx of assembly operations from nearly all the major automobile manufactures However unlike its competitors, General Motors General Motors has learned how to carefully and effectively conduct business.General Motors success with its joint venture agreements and research developments has even led them to into putthem global perspective.