General Electric Decision Making

1787 WordsDec 26, 20098 Pages
Awarded the most admirable company six times in the past few decades by Fortune, General Electric (GE) is obviously a very successful company. However, they were caught up in a trap of handing their CEOs a ridiculous amount of money like many other large corporations. According to one article from “Competition Forum” called Executive Compensation: The Case of General Electric by Nwabueze, Scott, Horak, and Chhotu, new management came in the form of Jeffrey Immelt in 2003 and changes were made. Instead of continuing with this guaranteed payment, management made the long-overdue decision in regard to economic feasibility. Top leaders were seen as irreplaceable it seemed and paid as such to retain them. Alternatives were examined and it…show more content…
These committees relay the collected information to the top-level managers to help them make important decisions. In the 1990’s there remained questions about whether achieving results without living the values of GE would be tolerated. This question was quickly answered decisively when the CEO of the company answered this question once and for all. He announced this landmark decision at the annual GE officers’ meeting and implemented several major changes in senior leadership including some of the heads of GE. He cleaned house and removed leaders who had achieved their numbers without exhibiting the GE values. He described the decision making process using a chart that had four quadrants. Quadrant one was a Type I manager which includes mangers that deliver results and exhibits the values of GE. Type II managers do not deliver results and do not exhibit the values. Type III managers do not deliver results but do exhibit the GE values. Finally, type IV managers deliver results but do not exhibit the values of GE. Type I managers’ rise fast at GE while type II are quickly shown the door. Type III managers are often given another change because the company finds values more important than meeting the commitments set forth. Type IV was the most difficult decision. It is hard to take action, because they are delivering the short term results but often without regard to the values. By doing this GE feels that they are hurting the company in
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