Analysis of General Electric

Running head: MODULE REPORT GENERAL ELECTRIC GE BRAZIL 1
Managing Governmental Relations, Political Risk, and Alliances
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MODULE REPORT GENERAL ELECTRIC GE BRAZIL 2
Managing Governmental Relations, Political Risk, and
Alliances
Introduction
The company, General Electric GE, intends to apply appropriate strategies towards
responding to external and internal factors that affect the business. Such factors are identified
using PESTLE analysis of General Electric GE. The analysis will determine the macro and micro
industrial environments in relation to business operations under gas and oil, electric lighting, and
energy among others. Otherwise, this strategic management analysis must consider government
relations, political risks, and alliances in relation to operations and micro/macro-environmental
factors (Luthans & Doh, 2018, pg. 30). The general implications of government relations,
political risks, and alliances will then be addressed while ensuring that industry-specific impacts
are accounted for. However, addressing the identified factor will need consideration of the
General Electric GE’s intensive growth and competitive strategies to encourage strategic
alignment. Those alignments are important in terms of maintaining the position of the company
and becoming an influencer (Bruha, 2014).
Risk Assessment and Management
Political Risks and Government Relations Assessment
a) Political Situation
Until recently, Brazil has been considered as one of the biggest general electric markets
in South America. However, with preceding incidences involving the bid for the impeachment of
her president and other political activities causing uncertainties, the country has sunk and is still
predicted by investors to sink into what analyst’s term as “the worst recession” within a 25-year

MODULE REPORT GENERAL ELECTRIC GE BRAZIL 3
period of business confidentiality. According to one journalist, Ammann, of Estado de S. Paulo,
natives are hoping to witness economic and political advances within the next few months or
investors and multinational corporations would consider “re-evaluating” their operations in the
country (Mercosur, 2004). A company like General Electric GE, for instance, has invested
approximately $1.62 billion in the last two years alone (i.e. in technology and new products) and
prospectively, would see them to 2020. However, such recessions have badly hit the industry
making production to drop to 28% and sales by 32% (Camargo & Mendes, 2013, pg. 522).
b) Government Alliances and Relations
With an unstable political environment, most investors still recognize Brazil as a major
operational base. According to the president of General Electric GE, the government is planning
to make changes in their tax and fiscal policies, as well as regulatory and labor laws. However, in
the meantime, they are terrible and uncompetitive. The response of the government towards such
matters has also been slow with many multinational companies shifting their operations to other
South American countries like Chile and Argentina (Silva, 2016, pg. 2002).
Apart from that, the business culture of Brazil denotes that operations between businesses
and clients be built on trust and knowing business partners personally and professionally is vital.
Organizations are not required to speak about the country’s political, religious, corruption, crime,
poverty, and deforestation state (Camargo & Mendes, 2013, pg. 524). In addition, natives are
more fluid to the notion of time and thus, they are always late to work and operations. It,
therefore, means that business processes in Brazil are longer compared to most countries while
business regulations are complex. However, as mentioned before, the government is planning to
make necessary changes in most business regulations (Mendes, Et al., 2013, pg. 448).