Corporate Strategy Analysis : General Electric Co. (2009-Present)

The American multinational conglomerate corporation, General Electric Company, is widely considered as one of the world’s highly successful corporations of the 20th century. The Fairfield, Connecticutheadquartered multinational operates in a wide range of segments including Oil and Gas, Aviation, Energy management, Capital, Transportation, Power and Water, and Transportation. The 1892 founded conglomerate corporation has been platform of strategic leadership in ensuring it keeps a strong grip of its market share by ensuring being competitive throughout the different personality in its leadership, including, Gerald L. Phillippe, Reginald H. Jones, and the John F. Welch, Jr. to the current Chairman and CEO, Jeffrey R. Immelt (2001-present).

This research paper aims at critically exploring the corporate strategy of the General Electric Company particularly for the last five years. It draws on the earlier analysis of the corporation’s strategic options up-to date. It draws the GE’s corporate strategy from the leadership period of Jack Welch as the CEO, with a scrutiny of the Welch’s Strategic approach. The major part of the paper looks into the GE’s corporate strategy put into practice to propel the company into success by the current Chairman and CEO, Jeff Immelt.

The strategic Approach of Jack Welch (1981-2001)

The scrutiny of the corporate strategy of Jack Welch is mainly to help build the analysis of the strategic options that was adopted by its successor in the management of the General Electric Company, Jeff Immelt. At the times when Jack picked the leadership of GE he embarked on a radical transformation of the corporation’s strategy, which ushered a new era of internal efficiency and performance management. Welch’s profit guidance which was aimed at earnings growth of 1.5 times to a twice value the GDP growth rate and his management philosophy found coherence in the GE’s slogan-Simplicity, Speed, Self-control.

According to the Welch corporate strategy of efficiency and performance, for about twenty years of his management he continuously put efforts to encourage the GE employees at every level in embracing ambitious targets and continuously improving their performance levels.

He further made efforts to sustain attack on bureaucratic processes thereby sorting to instill a culture of leadership, confidence, openness and creative thinking at all the levels of the organization. He further made the biggest staff cut in the administrative functions and the business decision making within the organization was delegated to the line operation managers.

Welch implemented a number of initiatives focusing on making improvement of a specific aspect of the corporation-wide performance. The main initiatives he came up with included: the Work-Out, Globalization, Boundary less Organization,and the six Sigma.

The Jeff Immelt (2001 – present)

Jeff’s management strategy is seem slightly deviating from its predecessor’s. He deploys less of intimidation unlike Jack, in motivating others by ensuring an encouraging platform and relating them at each and everyone’s level of the organization’s operations. Even though the two leaders have been raked to be effective, but Immelt’s system of regular-guy and people-friendly leadership style has created a different atmosphere at the GE drawing lots of praise from the ranks of his subordinates (Pahl, 2009).

Immelt’s challenge was to consolidate the impact of fallout of the 11th September attacks and a subsequent series of high profile corporate scandals, for example, WorldCom and Enron. This occurrence resulted to significant uncertainty that led to a crisis of investor’s confidence fuelling resentment from the community at large.

When there was a sliding share price, Immelt recognized that exposing the management of the GE to the business cycle is a critical step in the organization’s long term stability. He made a reassurance that the role of the CEO was not to manage the share price but to ensure management of the company for a long-term profit growth. He was determined to maintain the trust and the confidence of the community and the GE shareholders, hence implemented various measures to improve on transparency and promote active management of the GE’s public relationship with all the relevant stakeholders including the suppliers, customers, government and the community.

Just like his predecessor, Immelt made clear touch lines between the GE’S unique corporate model and the broadly unpopular diversified conglomerate model. He gave lots of emphasis on the role of GE’s resources, common systems, processes, culture and initiatives in synthesizing the corporation’s various businesses and making sure that there is unlock of the genuine economic value(Heide, 2008). With a good number of the easy efficiency gains having been already raised through the Welch’s extensive internal reforms, Immelt reasoning was that the future profit opportunities would most likely come from organic growth. He committed the GE to organic growth rate of about 8% annually. He identified various emerging global trends-the ageing category, the growing energy demands, and the concerns over global warming, the introduction of nanotechnology and biosciences, with new commercial opportunities in the emerging markets. The leadership of Immelt aimed at creating value for the customers by leveraging GE’s prime competencies, especially in advanced technology-delivery superior and highly customized services and products to high-growth market (Whittington, 2002).

He articulated to the various stakeholders that the GE’s corporate strategy encompassed three strategic imperatives; first, to sustain its strong business model, secondly, to strengthen the business portfolio, and lastly is the measure to ensure a drive of its growth initiatives. With regards to implementing this strategy, the GE’s businessportfolio was reorganized through a series of divestments and acquisitions around five key growth initiatives: Customer Focus, Technical Leadership, Services, Globalization and Growth Platforms.

The application of the Kaplan’s Balanced Scorecard in the implementation of the GE’s Strategies

The monitoring of the performance of the GE’s Strategies can be undertaken through the application of the Kaplan’s Balanced Scorecard (Heide, 2008). The performance management tool, for instance, gives a semi-standard structured report which is backed up with automation tools and design methods in which the managers use to track the implementation of the activities by the GE staff within their stipulated extend of control and to ensure assessment of the consequences arising fromsuch actions.

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