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Essay / Research Paper Abstract
A 9 page paper discussing GE's reasons for acquiring Tungsram and some of the problems GE discovered in trying to merge the two companies. The news of the demise of communism in Europe shocked the world, but it set a path for the economies of the former Eastern bloc nations to move to a free market, rather than a command, economy. GE's investment represented the largest US investment in Hungary since World War II, and it lost money during the first two years. Facilities have been upgraded, productivity is much greater than in the beginning, and the new company is developing its own culture. Bibliography lists 7 sources.
Page Count:
9 pages (~225 words per page)
File: CC6_KSTungsr.doc
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Unformatted sample text from the term paper:
nations to move to a free market, rather than a command, economy. At the end of 1990, the US was sliding into the only recession of the 1990s.
In spite of domestic economic conditions, GE became the first US multinational to take a grand-scale stand in Eastern Europe, through a joint venture that resulted in GE gaining management
control of Tungsram Company in Hungary. Background Verespe (l991) wrote that "The acquisition of the
previously state-owned Hungarian light-bulb manufacturer Tungsram brought with it a horde of managerial and manufacturing headaches more akin to the Dark Ages" (26). GE believed that the risks and
difficulties would be worthwhile given that the state-owned Tungsram had a 7 percent share of the European lighting market worth $2.5 billion. Before the acquisition, GEs share of the
European market was only 3 percent (Tully N137). In 1990, Tully wrote that the GE acquisition of Tungsram was the "latest phase of
the companys European strategy" (N137). When chairman Jack Welch took over as CEO at GE, he led development of the strategy that was to become GEs hallmark. GE
had lost touch with customers of many of its businesses, and Welch determined that if GE could not remain in a specific business and reasonably expect to be either number
one or two in its industry, then it would divest itself of that business. Few expect a core business of GE to be consumable products; most do expect it
to retain the electrical component of its history. The company had additional incentive for pursuing lighting manufacturing than it did for many of its other businesses, and the market
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