General Electric Decision Making

In the history of corporations few companies have demonstrated the staying power and tenacity as General Electric (GE.). Of the companies that originally appeared when the Dow Jones Industrial Average was rolled out in 1896 only GE is still doing business today. (General Electric, 2007) GE’s 125 year run has not been spotless. GE, like any long lasting organization, has had many ups and downs. GE’s past has at times been glorious and at other times has been dark and manipulative.

Analyzing GE’s corporate-level strategy from 2001 – present with Jeff Immelt as CEO, GE focuses on the growth and development platforms. Technology is the key driving force for GE’s future and growth. Advancements in industries such as energy, health and aviation fueled demand for cleaner and more efficient energy production. GE identified new markets with potential high-growth that offered attractive returns through strategic mergers and acquisitions. As CEO, Jeff Immelt established a process for identifying projects that offered attractive growth potential which were then nurtured and treated as special projects or initiatives that were not subject to strict budget constraints. Immelt introduced GE’s three strategic imperatives as: (1) sustaining its strong business model, (2) strengthening the business portfolio, and (3) driving its growth initiatives. www.ge.com

GE is recognized as one of the oldest and most successful companies in history. “The key to its success had been to combine massive size with constant adaptation. Over the decades, GE had adapted both its business portfolio and its management systems to the demands and opportunities of a changing world” (Grant, 2016). GE was not only a big successful company but, for many other diversified companies, it was also a “model of management” from its inception and through the 20th century. At the end of the 20th Century, GE had a legendary CEO, Jack Welch, who transformed the company’s portfolio from a manufacturing business to financial services. At the time of his retirement, GE Capital accounted for nearly half of GE’s revenue and the bulk of its assets (Grant, 2016).

Managements at each departments of the rganization have the power of decision making. Employees have the assess to the elected Advisory Board for any question or suggestion.

Did GE in the Welch era fulfill its social responsibility duty? Could it have done better? What should it have done?

Thank you for your summary and views on General Electric. I appreciate that you point out both good and bad citizen activities related to GE. As you pointed out, the corporate websites provide the most information about the positive activities and would not represent or pin-point any negative views. What types of good activities would outweigh the bad in your point of view? If a Multinational Corporation does not break the law, should they still be considered a bad citizen? For instance, GE has been involved in many pollution cases, but were they convicted and should we consider them a good citizen until proven guilty? Do you feel that laws are being enforced for these multinational corporations? The regulations and fines for breaking the

Because of their compensation sets the pattern the criticism particularly focus on the CEO’s high pay as well. Just like the previous criticism, there are current complaints which focused on at least two issues: Executives are paid too much and because the connection between executives current incentive-pay schemes are flawed. Because of these issues the company performance at best is mixed and at worst has led to a series of dysfunctional behaviors (Lorsch & Khurana, 2010). As the pay gap between chief executive officers and American workers of public companies grow; the question has aroused as to what drives the pay of the CEO’s and what’s behind the disparity. It is a known fact that it is a big disparity between the pay of other worker and the CEO pay in corporate America but what is the reason this disparity exists? The first major justification is an incentive for performance that is put forth by corporations; this helps explains the CEO pay level. They thought in order to attract the right candidate who will impact the performance of the organization is that they have to pay big. If this happens the shareholders of the company can get a better return on their investments. What has been justified as compensation for executives is to provide them with some form of stock grants as a form of incentive with

In the article, “Wages of Failure: The Ethics of Executive Compensation” General Global is faced with a complex decision after new CEO, Janice White, requests to be paid based on performance. Her predecessor, former CEO Bill Hogson, seemingly underperformed for the company for nearly a year and stepped down with a huge exit package totaling $100 million (two years salary with bonuses). This caused an outcry by the press for less greed among America’s corporate executives. Janice White, formerly CFO of General Global, feels that by changing the companies pay policy to pay the CEO based on performance would increase stakeholder faith in the corporation. By being paid based on merit rather than by a market based industry standard would

In 2001, the Multinational Monitor released over 40 documented grievances against GE, just before CEO Jack Welch’s Retirement (The Case Against GE). Some of these grievances date back to things GE had done since the 1940s, including nuclear testing on people in the United States. However, some are as

General Electric (GE) is a multinational conglomerate based in the U. S. whose mission is to “build, power, cure, move, and connect the world” (Culture | GE Careers," n.d.). According to GE’s fact sheet ("Fact Sheet | GE.com," n.d.), the company is headquartered in Boston, Massachusetts and operates in 170 countries. These locations include five research and development centers, three of which include: Bangalore, India; Munich, Germany; and Niskayuna, USA ("GE Global Research Locations | GE Global Research," n.d.). These three nations are members of the International Monetary Fund (IMF) and the World Trade Organization (WTO) ("World Factbook — Central Intelligence Agency," n.d.). All three are also members of the World Bank ("Member Countries," n.d.).

This report’s objective is to provide analysis of the leadership challenge that General Electric (GE) is currently facing, and to recommend solutions. The primary problem is determining what kind of candidate is required to replace retiring CEO Jack Welch. This has left GE to question how much does the company want to change policy over the previous era, and where does the company want to be in future?

At the beginning of the 1980s General Electric, the big USA electronics company determined a goal of increasing its market share. This aim was achieved by acquiring Radio Corporation of America and advanced satellites divisions and disposing of its consumer electronics divisions. This was General Electric’s effective strategic planning that helped to increase the annual income. These are the GE strengths, weaknesses, opportunities, and threats that still form the basis of strategic planning. The developed GE culture is its strength as well as human resources. The competition is great that is why the competitive advantage is the strength too. Technology is an essential part of any business and its usage presents great opportunities to GE Company.

Analysis - GE has likely been so successful over the years because of its ability to foresee major trends and capitalize upon them. In the 1960s, for instance, GE was one of the eight major computer companies. Even recently, since 1986, GE has continued to acquire several organizations; portions of NBC, wind manufacturing, universe pictures, aerospace industries, international firms, software and hardware manufacturing, even oil companies abroad. The company culture describes itself as not one company, but many each unit a vast and complex enterprise in and of itself, with a corporate

The culture at General Electric, before Jack Welch assumed his role as CEO in 1981, was highly decentralized, where significant emphasis on strategic planning was levied on 43 Strategic Business Units. However, Jack’s vision of changing the culture of the company was a priority to him.

GE was entering a new generational era, one where technology is at the forefront of growth and adaptation. Immelt identified Technology as one of GE’s major drivers for future growth which was signaled by his expansion of GE’s R&D budgets. He shifted the importance of Technology within GE by focusing on the R&D projects that offered large scale market potential, reffered to as “Imagination breakthroughs”.