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General Electric in Hungary

Introduction

The case study underlines an instance where General Electric invested in a communist country by acquiring a 51% interest Tungsram, a company that manufactures lighting products. General electric had high expectations as to the turnaround and profit-making opportunity that it had attained with the acquisition. However, this did not turn out that well as the company sustained losses before it made some drastic changes on the workforce.

From the case study, it is evident that the national culture, political systems and economic systems are interconnected and conflicting. This is especially considering that what happens in one sphere has a bearing on the outcomes of the other. The national culture in Hungary has a negative effect on the economic aspect of the business as there are conflicting expectations. Hungarians, in general, are lackadaisical, which is why they considered Americans as pushy. This may have emanated from the political climate (communism) in Hungary.

Considering the outcomes after the cutting the workforce by 50%, it is evident that the company would have used assimilation, a more effective management approach in merging the 2 companies. This approach would have involved introducing the American culture into the business and operations of the company thereby ensuring that the tested working cultures are safeguarded (Roger and Medema 23). This was the only way of ensuring the benefits of capitalism are safeguarded and used profitably (Alba and Nee 45).

Hungary comes with a number of strengths and weaknesses. First, the country is predominantly masculine, in which case it allows for competitiveness. This is complemented by the fact that the country is highly individualistic, in which case giving incentives for motivating production is easier (The Hofstede Centre 4). On the same note, Hungary is termed as a long-term orientation culture, which underlines its capacity to adapt its traditions to contemporary context ((The Hofstede Centre 7). The most fundamental weakness revolves around its uncertainty avoidance, in which case it maintains rigid behaviors and beliefs, not to mention that they do not tolerate unorthodox ideas. While this is the case, Hungary is largely a pragmatic society that makes an incredible business hub.

Works cited

The Hofstede Centre. Hungary. Web 2013, retrieved May 24, 2013 from HYPERLINK “http://geert-hofstede.com/hungary.html” http://geert-hofstede.com/hungary.html

Alba, Richard D and Nee. Victor. Remaking the American Mainstream. Assimilation and Contemporary Immigration. New York: Harvard University Press, 2003. Print

Roger E., Backhouse, and Medema, Steven. “Retrospectives: On the Definition of Economics”, Journal of Economic Perspectives, 23(1), p. 225. 2009. Print