Alliance Dynamics Within NUMMI

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Table of Contents

Abstract
Potential Problems of Cross-border Joint Ventures
Problem Overcoming
NUMMI Basics
Financial Profiles
Works Cited

Abstract

Strategic global management is closely associated with the managerial principles of the companies and the globalization tendencies. The issues, which should be discussed on the matters of the NUMMI activity are closely linked with cross-border communication and the matters of strategic management. Structure, partners, research and development, control, and coordination are the key matters of the global management strategy of the NUMMI alliance.

Potential Problems of Cross-border Joint Ventures

These problems are generally associated with the matters of cross-cultural communication, and differences in the strategic management principles, applied by the managers of these companies. Thus, American GM and Japanese Toyota managers have different representations on the matters of global business performance. Thus, as it is stated in NUMMI (2007):

NUMMI already had everything going against it when GM decided to kill Pontiac and pull out of the venture in July. Its United Auto Workers contract guarantees workers $28 an hour compared with $24 an hour in other Toyota plants. Higher electric rates in California made it undesirable.

Thus, the problem was resolved, nevertheless, the misunderstanding, which caused this problem may be an essential problem for performing the other ventures.

Problem Overcoming

Because all the problems arise based on the misunderstanding, caused by the differences in the cultural perception of the business process, all the problems may be resolved only by the means of negotiations and conferences, where the problems are discussed.

By the corporate policy of the companies, all the problems of communication should be resolved as soon as possible, as this is the only way to avoid the further development of the conflict. Consequently, the necessity to overcome the problems and difficulties is closely associated with matters of communication. (Gerardo, 2008, p. 321)

NUMMI Basics

Selection of Partners

The partners are either selected by the previous cooperation experience or based on the analysis of the cooperation and partnership with other companies. Thus, if the potential partner is a reliable cooperator, the company is offered to arrange negotiations on the matters of further partnership.

Structure and Processes

The alliance entails several plants and managerial departments, consequently, to avoid mistakes in management and manufacturing, every department and every division of manufacturing power is engaged in a particular manufacturing operation. Thus, it should be stated that the necessity to arrange the proper structure is the key principle of NUMMI cooperation.

Learning and Transparency

The fact is that the issues of transparency are relevant only while discussing the matters of cooperation. As it has been already emphasized, the partners are selected properly and thoroughly, consequently, all the processes and procedures are transparent for partners only.

Control and Coordination

Control is performed by the central managerial group, which includes the duly empowered representatives of all the participants of the NUMMI alliance.

Financial Profiles

The most important factor, that may be regarded as the lesson for both companies is the necessity to cooperate transparently, and negotiate on all the arguing issues. As for the recommendations, it should be stated that Toyota should have to be less conservative, and GM should be more trustful to its partners, and more respectful of the experience of the partners and managers of the cooperating companies.

Works Cited

Gerardo, RIchard. Global Strategic Management. M E Sharpe Inc. 2008

NUMMI. New United Motor Manufacturing Inc. What We are About. 2007. Web.

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