GE Case Study

2927 Words Apr 8th, 2014 12 Pages
Case Study
GE’s Two-Decade Transformation: Jack Welch’s Leadership

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BUS 463 - AE

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Summary of Background and Facts
General Electric
General Electric (GE) occupied the eighth spot on Fortune 500’s list of companies at the close of 2013. While number eight was a slide from 2012’s number six GE maintains its position, as one of the world’s largest and most influential corporations. Today, GE’s operates in over 160 countries and is led by Jeffery Immelt. During 2013 GE reported, total revenues approached 147 billion USD and profits around 13.6 billion USD. (CNNMoney, 2013). GE appears in textbooks from the third grade through the PhD. Level of the world’s best business and engineering
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Corporate structures remained largely unchanged between the end of World War II and 1980 but that was all about to change. Competition from Japan, the desktop PC and the dawn of the information age forced GE to rethink its operational model and search for a strategy that would enable them to remain competitive as the century ended. Welch quickly assessed that GE was too big and too slow to maintain its current market positions much less grow them.
The strategic planning model Welch inherited held nine layers between idea and decision with over 200 personnel involved in the process, hardly “lean and agile”. John Boyd developed what he called the OODA Loop to describe winning in air combat maneuvers. The OODA Loop consists of a cycle of four steps; Observe, Orientate, Decide, Act (OODA), Boyd argued that when two aircraft are engaged in a dogfight the pilot who has the fastest OODA Loop cycle will win. “The OODA Loop found advocates not only in the U.S. military, but also in the realms of business and sports – anywhere a competitor seeks and edge.” (McIntosh, 2011). Welch recognized that if GE was to win against the completion he needed to cycle its strategic planning OODA Loop faster. He responded by eliminating 5 layers of bureaucracy and over 50% of the planning staff. “We used to have department managers, sector managers, subsector managers, unit managers, and
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