Ge Strategy

4565 WordsJan 16, 201319 Pages
Corporate Strategy Analysis: General Electric Co. (1981–present) Stanislav Bucifal Australian National University July 2009 Corporate Strategy Analysis: General Electric Co. (1981–present) Stanislav Bucifal Introduction The General Electric Company (GE) is widely regarded as one of the world’s most successful corporations of the 20th century. This paper aims to critically analyse the corporate strategy of GE during the period from 1981 to present under the leadership of two very different but equally influential CEOs—Jack Welch and Jeff Immelt. The essay is organised in four sections. The first section describes GE’s corporate strategy from 1981 to 2001 with Jack Welch as CEO, followed immediately by a critical analysis of…show more content…
And second, the budgets were allowed to be revised as the competitive conditions changes (Grant 2008, p.307). The complex document-centric complex budgeting process was replaced with a much faster and less formal personal process based around a simple standardised five-page playbook in which line managers summarised the key strategic issues their businesses faced (Grant 2008, p.306). A central part of Welch’s corporate strategy was nurturing talent and leadership through the delegation of responsibility and deployment of powerful incentives. He designed a motivation scheme which permeated deep into ranks of middle management rewarding superior performance with generous bonuses and recognition of talent. Stock options on the company became were used extensively to link financial rewards to corporate performance, with nearly 22,000 stock options awarded to GE employees by the end of 1995, compared to only 400 in the early 1980’s (Grant 2008, p.308). In the 2000 annual report, in the Chairman’s letter, Welch declared that the organisation’s true core competency rests in the ‘global recruiting and nurturing of the world’s best people and the cultivation in them of an insatiable desire to learn, to stretch, and to do things better’ (GE 2000). GE’s performance evaluation system was famous for its ‘rigour and ruthlessness’ (Grant 2008, p.308). Each year the top 20 per cent were
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