CASE STUDY GENERAL ELECTRIC

Case Study General Electric

Case Study General Electric

1. What were the principal strategic and organizational initiatives introduced by Welch at GE and inherited by Immelt? To what extent did these initiatives amount to a new system of managing the large firm?

GE is a world-class company and object of emulation for many. It is also a unique organization. The company is a true conglomerate, but one that is more than an investment portfolio. It operates in a diverse set of businesses ranging from aircraft engines and massive power-generating turbines to financial services and broadcasting. It is huge - $150 billion in revenues. GE is knowledge intensive in all its businesses and global in its markets and operational scope.

The company is a crucible of management talent and a producer of CEOs that rivals universities. GE is a true innovator in management practices going back to the 1950's when it pioneered the use of strategic planning. Given all of these characteristics - its size, diversity, knowledge- intensiveness, global scale etc., one might argue that GE is America's most advanced corporation (Robert, 2008).

Now GE is embarking on a new challenge - producing organic (internally-generated) growth. CEO Jeff Immelt, who succeeded America's toughest CEO act to follow Jack Welch, is now trying to build an innovation engine that is equal to GE's vaunted productivity process.

What even a premier company like GE has discovered is that productivity leadership is merely a table stake in today's game of global business. More is needed. The best companies are also able to generate organic growth. So GE has set an aspirational goal of growing 2-3 times the growth rate of world GDP through organic growth. To achieve this, GE is attempting to break new ground. As Immelt recently told his senior managers, "The business book that can help you hasn't been written yet".

Led by its CEO, the company engaged in a tough self- examination of its strategies, thinking, ways of operating, and management practices to assess whether they could enable growth. It recognized it needed to change some its focus and upgrade some key capabilities if it was to become a consistent generator of organic growth (Robert, 2008). As a result, GE has set out to create a process for making experimentation and collaboration as engrained in the company psyche as productivity and fiscal accountability.

Right now, GE is making another full-scale effort (unhidden but also unflaunted) to change the way executives think and behave. Under Jeffrey Immelt, who became chief executive two years ago, executives at Crotonville are studying future technology, corporate social responsibility, system dynamics, and long-range planning. The purpose is to systematically build the capabilities of managers throughout the company — capabilities that enhance strategic thinking and cut down on bureaucratic decision making.

In other words, GE wants smart managers at many levels to be able to make the kind of strategic judgments and bets on bold new projects that would have been made by only the most senior executives in the ...