General Motors

Word Count: 2995 |

“There is no doubt that creativity is the most important human resource of all. Without creativity, there would be no progress, and we would be forever repeating the same patterns.” – Edward de Bono
The above saying could not be truer, more so in today’s business context. Organizations are trying to find new and inventive ways of first creating and then holding on to their competitive advantage (Class notes) and being creative is one way they can achieve that. Creativity is a very misunderstood term in organizations. It is thought to be the creation of “something out of nothing” whereas it actually is “the radical and effective change of something understood deeply” (Robinson and Hackett 1997). General Motors is certainly trying to appreciate this, and the company is always seeking to bring new products – or improvements to their current products – to market.

General Motors Corporation, also known as GM, is the world’s largest automaker and has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall. GM has and is supporting two and a half pensioners for every employee. It is the largest health care provider in the world. General Motors, writes a prescription every 1.5 seconds for drugs for their retirees and others — 1.5 seconds, 24 hours a day, seven days a week, 365 days a year — cost approaching $6 billion a year.


GM’s vision is to be the world leader in transportation products and related services. ‘We will earn our customers’ enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people’. – (GM Website)


GM is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that customers will receive superior value while employees and business partners will share in the success and their stock-holders will receive a sustained superior return on their investment.

General Motors has a broad differentiation of products with five divisions which include five market segments. They also mass produce their vehicles and give their customers the option of upgrading from to one GM brand to another.
GM Europe has been a loss maker for four years. During the last financial year, the European operations racked up net losses of $286m, down from $549m the previous year.
And GM’s overall sales growth in Europe continues to be held back by other models that are showing their age. GM Europe’s approach to the UK market is also criticised by motoring industry experts who bemoan the car maker’s lack of commitment to convert some key Saab and Cadillac models to right-hand drive.
GM is now trying to take Europe by storm after introducing diesel engines into its luxury models. It is producing Cadillac cars with diesel engines in a move that should make the luxurious American marque more appealing to European drivers. A recent spike in demand for upmarket cars with diesel engines that has made the segment the fastest growing and most profitable in Europe.
GM’s success is committed to innovation and technology. GM is exploring a range of innovations and technology such as:
– Alternative Fuels
– Powertrain Engines
– GM mobility
– Hybrid Vehicles
– Fuel Cells
General Motors is using advanced technology to make vehicles with improved fuel economy and lower emissions than typical internal combustion vehicles. Most importantly, these advanced technologies will give its customers better performing vehicles. GM has invested hundreds of millions of dollars in fuel cell research with the ultimate goal of removing the auto from the environmental equation, because they believe the automobile leads the way to the hydrogen economy and a truly sustainable future. As alternative technologies to the internal combustion engine evolve, their strategy is to develop a portfolio of options.
The aim of the SWOT analysis is to align the capabilities of the firm with the opportunities and the management should be made aware of the weaknesses and should aim to eliminate them. The threats and opportunities make up the environmental analysis while the strengths and weaknesses are the internal audit, the challenge for the management is to estimate its potential and build on its resources and competencies to create a competitive advantage. The strengths and weaknesses of a company are the internal aspects that will shape the entity. This analysis determines the opportunities and threats to a company in its industry. They offer a view where there are opportunities that can be taken advantage of along with threats that should be avoided. Opportunities and threats review the key aspects from the business environment. This analysis will aid an industry participant to wage future threats and how to capitalize future opportunities the opportunities and threats of the industry are largely related to political regulations and technology.
General Motors is a large corporation and has a fair share of the market. Technology is a tool that has the potential to empower automotive industry leaders at all levels. GM uses technology to improve management and operations systems, as well as to identify proven instructional methods. It has a lot of technological potential. In addition to sorting out its model line-up in Europe, GM decided to tidy up after the departure of European chief executive Michael Burns who is joined the US supplier Dana. Hence, new leadership is another strength that the company has. Quality improvement and perception is another on of its strengths. Also, model acceptance of the different GM products has improved.
The main weakness of GM has been the high operating costs, which has made the company less competitive. General Motors has been failing to make technology work in its favor. GM has a bureaucratic culture yet it operates in a market that is demanding high flexibility. The company also has a poor relationship with the International Union, UAW. GM has also faced a lot of product design problems. The company’s’ financial performance continues to be quite disappointing and the negative effects of downsizing are kicking in. The company still has a lot to learn with regards to Lean Production. According to Womack & Jones “lean thinking must start with a conscious attempt to define value in terms of specific products with specific capabilities at specific prices in dialogue with the specific customers.” So, thinking in terms of lean principles, GM did manage to identify the value stream correctly but missed the critical starting point of specifying value. Basically, they were doing the “wrong good” (Womack and Jones 1996:19) adding to muda or waste.

The company is now investing money in new plans that would enhance the efficiency of the company. The company is trying to use the knowledge it gained from Saturn experience and the Toyota (Nummi) joint venture. It should also continue to build on new found customer confidence. GM should benchmark itself with its competitors and take advantage of the changing consumer demand for new model types and styles.
The main threats General Motors faces are from its competitors both domestic and foreign. It has gone though a number of consumer lawsuits. Foreign legislation and regulation is also threatening factor that the company faces. The declining quality of infrastructure in the different markets is also another threat.


“We are in the arts and entertainment business”. – Bob Lutz, GM Vice Chairman, Global Product Development
To conceive, design and conceptualize a product one has to go through a sequence of steps which is referred to as a product development process (Ulrich and Eppinger 2000).
If a company hopes to maintain a steady stream of new, innovative products that meet or exceed a customer’s expectations, the decisions made at this phase of NPD must be sound decisions. General Motors have a formal process for controlling the earliest phase of Ideas for new product features. Ideas can be entered into an electronic database by any person or group of people can enter an idea, including suppliers. These ideas require further validation to our specific requirements.
Once the ideas are entered, a group of people from all functions and brands evaluates them, and decides whether or not to proceed with development. If the idea is approved, the appropriate engineering group is assigned to track development of that idea.
The General Motors process for bringing new ideas into the development phase resembles the process used at most other companies. Every effort is made to collect every idea and give it a fair, thorough chance to proceed. The process of deciding which ideas are a “go” is more of an art form than a science

Selling the product idea

To give companies a chance to make these decisions more reliably, the inventor of the idea needs to present as much information to the decision makers as possible. Or, to put it another way, he or she must perform a sales job for the idea. But in reality, proper attention is rarely given to a new invention. This may be due to the fact that a lot of good ideas come from people who have job functions which are very different from that of inventing new ideas. Such people just do not have time to do anything more than input some information into a database and hope for the best. Even some formal concept generation groups don’t have a strong appreciation for the amount of work required to get an idea started on its way.

Creating a new department

To encourage the development of a larger number of ideas, General Motors created a new department called Design and Technology Fusion, which I joined in January of 2001. The intention was to assemble a group of people who would do whatever it takes to get the development process started for some good ideas. To narrow the focus of the group, we were asked to concentrate on ideas or technologies that would enhance the design of our vehicles.
In other words, Design and Technology Fusion was going to be responsible for doing the sales job necessary to get the development started on some new ideas. In order to accomplish this, there were three main strategies identified: Prototyping, Media Exposure, and Follow-up.
Creating a prototype
The importance of prototyping an idea is seriously underrated. It is rarely enough to simply describe an idea in a text or even graphic format to sell someone on it. Independent inventors understand this. They know that if they are ever going to sell an invention to a manufacturer, they had better walk in with a prototype. The reason for this is simple: Even for visual people who can relate well to drawings, it is so much nicer to be able to hold an actual part and make it work. Prototypes also allow you to go through an iterative process of refining the concept. In other words, as an idea is being assembled into a working part, you will be able to identify some issues that would be impossible to see in a sketch.
The value of the media in development
During the development process, the media can be a very powerful tool. There are several benefits to letting them tell the story of a new product under development. Doing this, however, is something many companies shy away from because they fear that when their new concepts hit the press, their competitors are going to steal their ideas and beat them to market.
However, there are two primary benefits to having new ideas covered by the media which may outweigh these risks. First, positive press coverage becomes a great tool to convince the decision-makers to commit the resources to develop the idea. There’s just something about reading a complimentary article about a new product idea that gives it credibility and respectability.
Of course not every idea is a good idea, and working with the media is a great way to find that out. It is something like doing a clinic – but better, because the media tend to be more objective than someone being paid to give you input. Also, typically, if the media does not like the idea, they simply will not cover it in their stories, because the public is only interested in reading stories about good ideas, not bad ones.
The second benefit of media coverage is that it builds a positive, innovative image for your company. Your potential customers are reading these articles, and if an article is written in a positive manner, it could influence the customer’s opinion of your company positively. Of course, this means that you eventually have to come out with some of these great ideas or your credibility will be shot. And obviously, not all new technology should be revealed in the prototype stage. If the new product is something that the future of you company rides on, it needs to be handled with more secrecy.
After prototyping
Once the prototype is done and the supporting information is collected, a presentation can be made to the decision-makers. By “supporting information,” I mean any positive feedback from the press as well as more analytical information like forecast cost and profit. This step is usually not as simple as making one presentation at a meeting. The sales job will typically consist of hunting several different people down at different times and using the available information to convince them what a great idea you have.
Follow-up doesn’t end there, though. Even if the decision is formally made to begin development, the inventor needs to track the early progress to make sure that things are moving properly. Development of some products can take years, during which time it could be easy for people to lose focus on the development work
Project Management
Project management runs deep into General Motors new product development process. The organisation structure at GM is one where the Executive Committee consisting presidents, vice presidents and directors set broad technological directions and setting targets. The middle managers (general managers, senior engineers) have the responsibility of giving specific targets to the project teams. The background of all people at senior positions at GM is deeply entrenched in technology, making it easier for the project team members to relate to the senior managers better. This minimizes the “us – and – them attitude” in the team (Parry and Turner 2003). Teams select their own team leader who manages day-to-day activities. Middle level managers make specific project proposals for the top management, who establish priorities leading to greater communication. Even junior engineers are allowed to voice their opinion, fostering innovation.

General motors should cut costs and this can be done in a number of ways. It should drop its unsuccessful product lines; it should standardize component parts across the different models and reduce the number of parts needed to produce a car. It should also decentralize decision making and manage its supplier relationships in a better fashion. .
GM should also focus its resources on core products, cars and trucks. It should realign its organizational structure to support core products and meet costs and quality goals. For instance, GM could have self managed creative work teams to figure out how to speed-up product development & improve product development.
GM should also balance the needs of employees and unions with the needs of the company.


In conclusion, I think GM likes to talk about the voice of the customer. The problem is the base of their customers keeps shrinking. They need to listen to their competitors customers, too. Then they need to get some outside voices of people who understand what makes a car or truck passionate. Probably no American business needs more good news in 2006 than General Motors. The world’s largest car company looks like it may go bankrupt this year so it really needs to beat that threat back. GM has a lot of brands so it should not try to do the same thing with all the brands. Finally, their plans of introducing diesel engines are unlikely to appeal to traditional motorheads whose love affair with powerful petrol engines remain strong.


• Fleisher, Craig S. & Bensoussan, Babette E., Strategic and Competitive Analysis, published by Pearson Education Inc., 2003
• Womack, J.P. and Jones, D.T. (1998). Lean Thinking: Banish Waste and Create Wealth In Your Corporation .New York: Free Press
• Ulrich, K.T. and Eppinger, S.D. (2003). Product Design and Development. Boston, Mass.; London: Irwin/McGraw-Hill.
• Sutton, R. (2001). The Weird Rules of Creativity. Harvard Business Review, 79(8), pp.96-103.
• Meyer, S.A. (2000). Managing within a Creative Environment. Design Management Journal. pp.10-16z
• GM Posts Huge Loss:
• Farber, David. Sloan Rules: Alfred P. Sloan and the Triumph of General Motors U of Chicago Press 2002
• Maxton, Graeme P. and John Wormald, Time for a Model Change: Re-engineering the Global Automotive Industry (2004)
• General Motors Website:
• Turner, C.E. and Parry, G.C. (2003). Lean thinking – Lean New Product Introduction Game..pp.1-39.

You May Also Find These Documents Helpful

Allegory Of American Pie By Don Mc Lean

Ask anyone what was the defining moment in the rock history of the 1960s was and all you will get is a one word answer: Woodstock. The three day rock festival that defined an era was only one of many music festivals of the '60s. But Woodstock has come to symbolize, "an era of peaceful, free- loving, drug- taking hippie youth, carefree before harsher realities hit..." (Layman 40). The Woodstock festival ended a century filled with many metamorphoses of rock'n'roll, from the era of pop music to the rebirth of folk music to the invention of acid rock. But some cynics say that rock'n'roll died with the death of Buddy Holly before the 60s even began. One such person is Don McLean. The poet behind the haunting epic song about the death of 'danceable' music, McLean wrote the ever popular song, "American Pie" (appendix 1). The most important song in rock'n'roll history, "American Pie", is the song about the demise of rock'n'roll after Buddy Holly's death and the heathenism of rock that resulted. Although McLean himself won't reveal any symbolism in his songs, "American Pie" is one of the most analyzed pieces of literature in modern society. Although not all of its secrets have been revealed, many "scholars" of the sixties will agree that the mystery of this song is one of the reasons it has become so successful- everyone wants to know the meanings of its allegories. Proof of "American Pie's" truth lies in the allegory of the song. Many People enjoy the song but have no idea what it means- Who is the Jester? What is the levee? When the deeper story is found, the importance of the song is unearthed. "American Pie" is not only a song, it is an epic poem about the course of rock'n'roll...

Carl Orffs Philosophies In Music Education

While Carl Orff is a very seminal composer of the 20th century, his greatest success and influence has been in the field of Music Education. Born on July 10th in Munich, Germany in 1895, Orff refused to speak about his past almost as if he were ashamed of it. What we do know, however, is that Orff came from a Bavarian family who was very active in the German military. His father's regiment band would often play through some of the young Orff's first attempts at composing. Although Orff was adamant about the secrecy of his past, Moser's Musik Lexicon says that he studied in the Munich Academy of Music until 1914. Orff then served in the military in the first world war. After the war, he held various positions in the Mannheim and Darmstadt opera houses then returned home to Munich to further study music. In 1925, and for the rest of his life, Orff was the head of a department and co-founder of the Guenther School for gymnastics, music, and dance in Munich where he worked with musical beginners. This is where he developed his Music Education theories. In 1937, Orff's Carmina Burana premiered in Frankfurt, Germany. Needless to say, it was a great success. With the success of Carmina Burana, Orff orphaned all of his previous works except for Catulli Carmina and the En trata which were rewritten to be acceptable by Orff. One of Orff's most admired composers was Monteverdi. In fact, much of Orff's work was based on ancient material. Orff said: I am often asked why I nearly always select old material, fairy tales and legends for my stage works. I do not look upon them as old, but rather as valid material. The time element disappears, and only the spiritual power remains. My...

Johann Sebastian Bach Biography

Throughout the history of music, many great composers, theorists, and instrumentalists have left indelible marks and influences that people today look back on to admire and aspire to. No exception to this idiom is Johann Sebastian Bach, whose impact on music was unforgettable to say the least. People today look back to his writings and works to both learn and admire. He truly can be considered a music history great. Bach, who came from a family of over 53 musicians, was nothing short of a virtuosic instrumentalist as well as a masterful composer. Born in Eisenach, Germany, on March 21, 1685, he was the son of a masterful violinist, Johann Ambrosius Bach, who taught his son the basic skills for string playing. Along with this string playing, Bach began to play the organ which is the instrument he would later on be noted for in history. His instruction on the organ came from the player at Eisenach's most important church. He instructed the young boy rather rigorously until his skills surpassed anyone?s expectations for someone of such a young age. Bach suffered early trauma when his parents died in 1695. He went to go live with his older brother, Johann Christoph, who also was a professional organist at Ohrdruf. He continued his younger brother's education on that instrument, as well as introducing him to the harpsichord. The rigorous training on these instruments combined with Bach?s masterful skill paid off for him at an early age. After several years of studying with his older brother, he received a scholarship to study in Luneberg, Germany, which is located on the northern tip of the country. As a result, he left his brother?s tutelage and went to go and study there. The teenage years brought Bach to several parts of Germany where he...


Michelangelo was pessimistic in his poetry and an optimist in his artwork. Michelangelo?s artwork consisted of paintings and sculptures that showed humanity in it?s natural state. Michelangelo?s poetry was pessimistic in his response to Strazzi even though he was complementing him. Michelangelo?s sculpture brought out his optimism. Michelangelo was optimistic in completing The Tomb of Pope Julius II and persevered through it?s many revisions trying to complete his vision. Sculpture was Michelangelo?s main goal and the love of his life. Since his art portrayed both optimism and pessimism, Michelangelo was in touch with his positive and negative sides, showing that he had a great and stable personality. Michelangelo?s artwork consisted of paintings and sculptures that showed humanity in it?s natural state. Michelangelo Buonarroti was called to Rome in 1505 by Pope Julius II to create for him a monumental tomb. We have no clear sense of what the tomb was to look like, since over the years it went through at least five conceptual revisions. The tomb was to have three levels; the bottom level was to have sculpted figures representing Victory and bond slaves. The second level was to have statues of Moses and Saint Paul as well as symbolic figures of the active and contemplative life- representative of the human striving for, and reception of, knowledge. The third level, it is assumed, was to have an effigy of the deceased pope. The tomb of Pope Julius II was never finished. What was finished of the tomb represents a twenty-year span of frustrating delays and revised schemes. Michelangelo had hardly begun work on the pope?s tomb when Julius commanded him to fresco the ceiling of the Sistine Chapel to complete the work done in the previous century under Sixtus IV. The overall organization consists of four large triangles at...

Oscar Wilde

Oscar Fingal O'Flahertie Wills Wilde was born in Dublin Ireland on October 16, 1854. He is one of the most talented and most controversial writers of his time. He was well known for his wit, flamboyance, and creative genius and with his little dramatic training showing his natural talent for stage and theatre. He is termed a martyr by some and may be the first true self-publicist and was known for his style of dress and odd behavior. Wilde, 1882 His Father, William Wilde, was a highly accredited doctor and his mother, Jane Francesca Elgee, was a writer of revolutionary poems. Oscar had a brother William Charles Kingsbury along with his father's three illegitimate children, Henry, Emily, and Mary. His sister, Isola Emily Francesca died in 1867 at only ten years of age from a sudden fever, greatly affecting Oscar and his family. He kept a lock of her hair in an envelope and later wrote the poem 'Requiescat' in her memory. Oscar and his brother William both attended the Protora Royal School at Enniskillen. He had little in common with the other children. He disliked games and took more interest in flowers and sunsets. He was extremely passionate about anything that had to do with ancient Greece and with Classics. Wilde during school years In 1871, he was awarded a Royal School Scholarship to Trinity College in Dublin and received many awards and earned the highest honor the college offered to an undergraduate, the Foundation Scholarship. In 1874, he also won the College's Berkley Gold Medal for Greek and was awarded a Demyship to Magdalen College, Oxford. After graduating from Oxford, Oscar moved to London with his friend Frank Miles, a well-known portrait painter of the time. In 1878 his poem Ravenna was published, for which he won the...

The History Of Greek Theater

Theater and drama in Ancient Greece took form in about 5th century BCE, with the Sopocles, the great writer of tragedy. In his plays and those of the same genre, heroes and the ideals of life were depicted and glorified. It was believed that man should live for honor and fame, his action was courageous and glorious and his life would climax in a great and noble death. Originally, the hero's recognition was created by selfish behaviors and little thought of service to others. As the Greeks grew toward city-states and colonization, it became the destiny and ambition of the hero to gain honor by serving his city. The second major characteristic of the early Greek world was the supernatural. The two worlds were not separate, as the gods lived in the same world as the men, and they interfered in the men's lives as they chose to. It was the gods who sent suffering and evil to men. In the plays of Sophocles, the gods brought about the hero's downfall because of a tragic flaw in the character of the hero. In Greek tragedy, suffering brought knowledge of worldly matters and of the individual. Aristotle attempted to explain how an audience could observe tragic events and still have a pleasurable experience. Aristotle, by searching the works of writers of Greek tragedy, Aeschulus, Euripides and Sophocles (whose Oedipus Rex he considered the finest of all Greek tragedies), arrived at his definition of tragedy. This explanation has a profound influence for more than twenty centuries on those writing tragedies, most significantly Shakespeare. Aristotle's analysis of tragedy began with a description of the effect such a work had on the audience as a "catharsis" or purging of the emotions. He decided that catharsis was the purging of two specific emotions, pity and...

Scholarship Essay About Goals

Ever since I was a young kid I have always been interested with aircraft. I was so curious of how airplane's fly. I remember taking my toys apart to see how it works. As a kid I wanted to go to the airport to watch the airplanes land and fly and pondered how this happens. Other kids wanted to go to the amusement places. As I grew older I became more and more interested in aircraft and the technology behind it. I always involved myself with aviation early on. I read books and magazines on aviation, took museum tours, built model airplanes. When I was younger my father would take me to aircraft repair facilities where I would watch in great fascination. In my teens, went up to the military bases and befriended many soldiers involved with aircraft and asked them numerous questions. I got to meet many aeronautics engineers and borrowed their old textbooks and read them till the wee hours of the morning. As technology improved with information superhighway, I logged on the web. Stayed up for hours and hours searching through web pages and web pages of information about aircraft and technology. I started my elementary school in the Philippines, then we moved to U.S. and continued my high school education and graduated. Enrolled at the CCSF to pursue my college education and now I am in the 2nd year in CCSF taking aeronautics. My goal now is to obtain my AS degree from the City College of San Francisco (CCSF) so I can transfer to a University and get a Bachelors degree and to continue for my Masters degree in Aeronautics Engineering. I will strive hard to reach the peak level of my career which is a Professor and hopefully to be an aeronautic professor so...

Circus Circus Enterprises Case Studies

Executive Summary: Circus Circus Enterprises is a leader and will continue to be in the gaming industry. In recent years, they have seen a decline in profit and revenue; management tends to blame the decrease on continuing disruptions from remodeling, expansion, and increased competition. Consequently, Circus has reported decreases in its net income for 1997 and 1998 and management believes this trend will continue as competition heightens. Currently the company is involved in several joint ventures, its brand of casino entertainment has traditionally catered to the low rollers and family vacationers through its theme park. Circus should continue to expand its existing operations into new market segments. This shift will allow them to attract the up scale gambler. Overview Circus Circus Enterprises, Inc founded in 1974 is in the business of entertainment, with its core strength in casino gambling. The company?s asset base, operating cash flow, profit margin, multiple markets and customers, rank it as one of the gaming industry leaders. Partners William G. Bennett an aggressive cost cutter and William N. Pennington purchased Circus Circus in 1974 as a small and unprofitable casino. It went public in 1983, from 1993 to 1997; the average return on capital invested was 16.5%. Circus Circus operates several properties in Las Vegas, Reno, Laughlin, and one in Mississippi, as well as 50% ownership in three other casinos and a theme park. On January 31,1998 Circus reported net income of 89.9 million and revenues of 1.35 billion, this is a down from 100 million on 1.3 billion in 1997. Management sees this decline in revenue due to the rapid and extensive expansion and the increased competition that Circus is facing. Well established in the casino gaming industry the corporation has its focus in the entertainment business and has particularly a popular theme resort concept....

Effect Of Civil War On American Economy

The Economies of the North and South, 1861-1865 In 1861, a great war in American history began. It was a civil war between the north and south that was by no means civil. This war would have great repercussions upon the economy of this country and the states within it. The American Civil War began with secession, creating a divided union of sorts, and sparked an incredibly cataclysmic four years. Although the actual war began with secession, this was not the only driving force. The economy of the Southern states, the Confederacy, greatly if not entirely depended on the institution of slavery. The Confederacy was heavily reliant on agriculture, and they used the profits made from the sale of such raw materials to purchase finished goods to use and enjoy. Their major export was cotton, which thrived on the warm river deltas and could easily be shipped to major ocean ports from towns on the Mississippi and numerous river cities. Slavery was a key part of this, as slaves were the ones who harvested and planted the cotton. Being such an enormous unpaid work force, the profits made were extraordinarily high and the price for the unfinished goods drastically low in comparison; especially since he invention of the cotton gin in 1793 which made the work all that much easier and quicker. In contrast, the economical structure of the Northern states, the Union, was vastly dependent on industry. Slavery did not exist in most of the Union, as there was no demand for it due to the type of industrial development taking place. As the Union had a paid work force, the profits made were lower and the cost of the finished manufactured item higher. In turn, the Union used the profits and purchased raw materials to use. This cycle...

Evaluation Of The Effectiveness Of Trade Embargoes

Although I am a strong critic of the use and effectiveness of economic sanctions, such as trade embargoes, for the sake of this assignment, I will present both their theoretical advantages and their disadvantages based upon my research. Trade embargoes and blockades have traditionally been used to entice nations to alter their behavior or to punish them for certain behavior. The intentions behind these policies are generally noble, at least on the surface. However, these policies can have side effects. For example, FDR's blockade of raw materials against the Japanese in Manchuria in the 1930s arguably led to the bombing of Pearl Harbor, which resulted in U.S. involvement in World War II. The decades-long embargo against Cuba not only did not lead to the topple of the communist regime there, but may have strengthened Castro's hold on the island and has created animosity toward the United States in Latin America and much suffering by the people of Cuba. Various studies have concluded that embargoes and other economic sanctions generally have not been effective from a utilitarian or policy perspective, yet these policies continue. Evaluation of the effectiveness of Trade Embargoes Strengths Trade embargoes and other sanctions can give the sender government the appearance of taking strong measures in response to a given situation without resorting to violence. Sanctions can be imposed in conjunction with other measures to achieve conflict prevention and mitigation goals. Sanctions may be ineffective: goals may be too elusive, the means too gentle, or cooperation from other countries insufficient. It is usually difficult to determine whether embargoes were an effective deterrent against future misdeeds: embargoes may contribute to a successful outcome, but can rarely achieve ambitious objectives alone. Some regimes are highly resistant to external pressures to reform. At the same time, trade sanctions may narrow the...