BSB 5004 Introduction to
management: assessment 3
Analysis of General Electric
Table of Contents
1.0. Introduction .......................................................................................................................................... 2
1.1. Strategy ..................................................................................................................................... 2
1.2. Mission, vision, values .............................................................................................................. 2
1.3. Financial..................................................................................................................................... 3
2.0. Corporate Communication ................................................................................................................... 4
3.0. Organizational Culture .......................................................................................................................... 5
4.0. Corporate Social Responsibility ............................................................................................................ 6
4.1. People ........................................................................................................................................ 6
4.2. Plant........................................................................................................................................... 7
4.3. Economy .................................................................................................................................... 7
5.0. Leadership ............................................................................................................................................. 8
5.1. CEO Leadership.......................................................................................................................... 8
5.2. Decision making ........................................................................................................................ 9
6.0. Conclusion ............................................................................................................................................ 10
References ............................................................................................................................................ 11-12
Appendix ............................................................................................................................................. 13 - 14
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1.0-Introduction
1.1-Strategy
General Electric (GE) is an American multinationalcorporationand is one of the biggest
companies in the world today. It was the result of integrating the Edison General Electric
Company, founded by Thomas Edison, with the Thomson-Houston Company in 1892.(GE, n.da). GE has a very diverse workforce that consists of over 300,000 employees from 160 different
countries (GE, n.d-b). Furthermore, GE has many global businesses in different markets that
include healthcare, consumer industrial, aviation, energy, mining, oil and gas, personal
electronics and transportation (GE, n.d-c). GE’s Growth strategy is based on creating innovative
Eco-friendly products to solve customers and global environmental problems; thus achieving
global sustainable growth. GE has 75% of its earnings from services as with $157 billion saving
they will have the momentum to grow in the future. This strategy is driven by investing in
infrastructure markets, increasing capital-efficiency, investing in research and development,
global expansion and building effective customers' relationships. (GE: annual report, 2012).
1.2. Mission, vision, and values:
There is no official mission, vision or values statement created by GE. However, the GE website
contains these statements: "GE-works-on-things-that matter";-"The-best people-and the-besttechnologies taking on the-toughest-challenges"; "At GE, it is we as a company not me as a
company"; "Finding solutions in energy, health and home, transportation and finance”; “Not
just imagining. Doing. GE works"(GE, n.d-a).
These statements describe GE’s mission, which is to create solutions for serious global
problems in the “energy, health and home, transportation and finance” sectors through
creating innovative high quality products and hiring active workforce. The above statements
can also identify the values of GE; firstly, innovation due to mentioning words such as
“imagination”; “toughest challenges” means risk taking; “Finding solutions”, “doing” and
“works” refers to productivity. Finally, “we as a company” signifies teamwork. These
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statements can be used by GE as a roadmap to decide whether these decisions are aligned with
their values or will they achieve GE’s goals.
1.3. Financial:
According to the latest financial data released in GE 2012 annual report, GE continues a streak
of increasing sales; the total sales revenue for 2012 was$147,359 billion, up 3% from 2011. The
increase in sales is due to a somewhat stable global market; which has led to stabilize buyers'
financial powers, despite uncertainty in European markets. Likewise,-the-total-costs-and
expenses-also-increased-and-equaled-$129,953-billion. This is attributed mostly to the
increase-in-sales,-which-increased-the-costs-of goods-and-services sold. At the end of 2012,
the-net-profit-decreased-by 3.6% from $14,151 billion in 2011 to $13,641 billion, due to a 4%
decrease in discounted operations profit after GE decided to sell its consumers Ireland
discounted operation in 2012. Overall, GE financial shows a good and healthy financial position
for the company, as the increasing sales trend has started in recent years and is expected to
continue in upcoming years, and -GE-is-expected-to-recover-from-its-setback-in- net profit by
the end of 2013.(GE: annual report, 2012)
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2.0. Corporate Communication
As one-of-the-most well-known-companies-in-the-world, GE has different stakeholders for its
corporate-communication. Most-sources-discussed GE’s corporate-communication-with its
employees,-investors,-communities-and-customers;-this-suggests that these stakeholders are
being-focused-on-by-GE in its corporate-communication. –
GE’s employees are one of the most important assets for the company. GE has over 300,000
employees that come from different countries around the globe (GE,N.D-E). GE has created an
intranet that connects all employees together and allows GE to deliver its messages as well as
allowing employees to communicate with each other effectively and efficiently (United Planet
& GE publishing,2009). This will lead to better results and better ideas and products; meaning
that more innovation will occur, which is one of GE’s main strategies. GE corporate
communication also allows managers to communicate effectively with employees, which will
help keeping employees on the right track.
GE functions in more than 160 countries, and it is necessary to communicate effectively with all
communitiesof these countries in order function effectively(GE,N.D-F). GE communicates with
communities (Public Relation), to gain their support.GE tries to make communities feel that GE
is not just a company, but a member of the community. To do so, GE tries to align itself with
many-events-that-interest-people-in-communities-around
the
world;
such
as
the
Olympics(Crader&Santomier, 2011). GE uses-social-media to-connect with-members of
communities. GE is-aiming from this to make communities accept GE as member and thus GE
will gain corporate citizenship(General Electric,2009). This will help GE enter many new
markets, which will support GE's strategy of global expansion.
GE sees its investors as an impactful part of the company and communication with them should
be as honest as possible. That is why GE makesgreat efforts with their corporate
communication with their investors.This includes a specific section in their website for
investor’s relations for things like news and reports (appendix 1). They also communicate with
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investors on social media; which is something other companies dorarely. The aim of this
corporate communication with investors is to show how transparent and honest GE is with its
dealing with investors and make information that interest investors easily available; which will
help attract more investors to GE. (Investor relations, n.d.)
GE corporate communication with customers is primarily done through creating unique and
creative advertisements such as the 2007 GE DVC advertisement, in order to attract new
customers to its products and keep existing customers interested By using uniqueness,
customers
are
likely
to
accept
the
information
and
be
attracted
to
the
products(Steinberg,2007). By increasing customers interest, customers are less likely to be
attracted to GE competitors and thus relationship with customers will be established which is
one of GE’s drives behind their strategy.
3.0. Organizational Culture
GE corporate culture seems to be aligned with its strategy of innovative and sustainable
growth. For that GE has a corporate culture that encourages innovation. This is illustrated from
different elements, such as the statements that were explained in the introduction, all of which
show GE’s values in encouraging innovation. GE sees their innovation as a way to help others
throughout “Building, curing, moving and powering”. Also, innovation in GE is usually
mentioned alongside sustainability, indicating this to be an important factor in GE’s culture.
This is evidence by GE’s statement "As a 130-year-old technology company, sustainability is
embedded in our culture and our business strategy"(GE citizenship, n.d). Moreover, GE places
less emphasis on control systems, in fact, creating and innovating is what GE rewards
employees for(Vakhriya and Roa, 2009).Additionally, the history page in the website contains
many stories that show how innovation is a huge part of GE's history and proves that GE is the
one that initiates this idea; an example of that How GE’s founder Edison light the world up with
his inventions . These clearly show that GE considers innovation to be the dominate culture (GE,
n.d-a).
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A part of GE culture focuses on their employees which indicatesa people-oriented culture. A
clear sign of this is GE's CEO statement “people are our core competency” (Pomeroy, 2007).
This is also supported by the many training programs created to improve employees’ skills.GE
invests heavily, $1 billion annually,-in-training-programs-and-scholarships-for employees.
Another sign is, statistics shows that 85%-95% of GE's executives are promoted from within in
order to motivate employees in their line of work.(Marquze, 2007). GE tries to diversify its
workforce by hiring many employees around the globe.This shows clearly in a statement in GE
website “We see diversity and inclusiveness as an essential part of our productivity, creativity,
innovation and competitive advantage”(GE, n.d-D).
GE has successfully created a corporate culture ordinatedmostly to innovation, and supported
by empowering people. This changing the way things are done inside the company to being
focus in creating innovations that helps others, which will support GE’s growth strategy.
4.0. Corporate Social Responsibility (CSR)
Since the establishment, GE is committed to being ambassadors for a better tomorrow. It is
well known for its ethical behavior, and since six years, it has been in ethisphere most ethical
companies list. GE conducts training sessions for employees about ethics and how important it
is for them to have it. Further, GE has a process for employees to freely report any illegal
violation in order to be accurately investigated (Amex and GE saluted for ethics, 2012).
GE's corporate social responsibility is aligned with its business strategy which is finding
sustainable solutions to help several stakeholders; meaning that the (multi-stakeholders
approach) is being followed. GE'sCSR has three focus areas: people, plant and economy (GE
citizenship, n.d).
4.1.
People:
People are GE's main asset. GE is committed to four groups of people, employees,
communities, customers and shareholders, and it is socially responsible to each group
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differently. As a part of its responsibility toward employees, GE cares about their health and
safety and aims to provide them with the most probable work environment. Further, people in
communities are supported by conducting charity and voluntary work, specifically, in
healthcare, education and environment fields (performance against commitment, 2012).
Currently, GE has about 1.3 million volunteers and they are spread across 46 countries
(sustainable growth report, 2012). Regarding their customers, GE is committed to providing
them with the high quality, valuable and sustainable products. Also, an ecomagination annual
progress report is shared in order to keep informing the customers about any actions the
company initiate toward their benefit. Finally, as for the shareholders, GE is known for caring
about shareholders wealth by increasing dividends above the agreed amount whenever
possible even though this will reduce profit (Lemer, 2010).
4.2.
Plant:
One of the ethical issues GE mangers are concern about is the environmental degradation. All
their steps are to claim and improve the environment in several sectors, energy, water,
healthcare, power and transportation, using different methods. Unlike any other organizations,
GE has decided to provide only eco-friendly products that have positive impact on the
environment.This concept is known in GE as “Ecomagination” (Liodice, 2010).
4.3.
Economy:
All of the company's sustainability initiatives for plant are a method to help the economy and to
increase growth. Immelt once said, "Things that are good for the environment are also good for
business" (strategic decision, 2007).Moreover, GE has ensured transparency, openness and
ethical behaviors in order to be complied with the government policies, which is one of the
important stakeholders. Further, population is rapidly increasing and since GE has many outlets
in more than 160 countries, their activities are to help local communities in job creation and
training. This will eventually reduce unemployment in the region (GE citizenship, N.D.-G).
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Thus, GE's initiatives in people, plant and economy are a mean to successfully apply their main
business strategy, which is sustainably finding solutions for the world's toughest issues.
5.0. Leadership and Decision Making
5.1.
Leadership:
GE-is well-known-for producing-many-great-leaders and the best way-to-understandGE's
leadership style is by-analyzing its-CEO-leadership-style.
Jeff immelt the CEO faced many threats at the beginning of his reign, one such threat is the
September 9th events-that-increased-GE’sinsurancecostsand-reduced –airturbine-revenues.
Therefore, Immelt-has introduced new culture of creating innovative eco-friendly products
that aim to achieve sustainable-global-growth (Kranhold, 2007). Although Immelt is ademanding-leader, and-always-thrives to improve-employees’ performance-in order to
improve GE (Daft, R, L., 2008), his approach is focused on making GE an employer of choice.
Thus,-as-mentioned-earlier, he-made himself-reachable to-all employees,-provided-several
trainings-for-them and offered different incentives to encourage them.
According to Daniel Gloman emotional intelligence theory (EI) (Ionnaidou and Konstantikaki,
2008), Jeff Immelt has a high EI. Immelt is well known for his people skills and is able to
convince people of his ideas easily. He is a good listener, charismatic, self-confident,
motivational-and-energetic-about-his-work (Daft, R, L., 2008). Moreover,-he-is-an-effective
and strong leader because he is able to make difficult decisions’ such as laying people off, at
the same time, he has a long term vision for the company and is strategically able to identify
steps-to-pursuit-this-vision (Pomeroy, 2007). Finally-he-makes-employees-enthusiastic-and
passion and gives them a sense of purpose about their jobs such as saying to them "Wewant-GE-to-be-a-company-that-helps-other-and-lead-the-global markets" (GE: leadership,
n.d). Thus, employees follow him because they want to, not because they are forced to. All
the above clearly indicates that Immelt is a transformational leader.
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5.2.
Decision making:
Immelt took several decisions to support his vision, and one prime example of his effective
decisions is creating and investing heavily in “Ecomagination”; which is creating all products to
solve global environmental problems. In 2011, GE investment in EcomaginationR&D reached
$5 billion. This decision was made after a 75% increase in demand for clean energy. Moreover,
many customers became environmentally aware and demand green products. GE also decided
to incorporate the “Ecomagination” concept in all of its business that to truly seek sustainable
growth for the company as a whole. (GE publishes 2010 Ecomagination annual report, 2011).
This decision benefits GE greatly, firstly by investing heavily in “Ecomagination” R&D green
products will be created to meet the increasing demand. This decision also reduced GE
emissions by 22% which will create a good image for GE and satisfy environmentally aware
customers because GE, with ”Ecomagination”, has a greener business approach; which leads to
more revenue as evidenced by the huge revenues. This decision generated over $85 billion.
Also, because it creates products for global markets; Ecomagination allows GE to expand
globally. All in all, this decision is considered to be one of Immelt’s most effective decisions
asEcomagination is now GE strongest strength. (GE publishes 2010 Ecomagination annual
report, 2011).
This example shows effective GE leaders are in making decisions to support the strategy.
Because the growth strategy is to seek organic growth, global expansion and being innovative,
GE decisions are focused in increasing investments to reach its goal. Even though some
decisions might increase costs initially, such as the example explained above, they will
eventually lead to achieving objectives.
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6.0. Conclusion
In conclusion, GE is measured to be one of the most successful companies nowadays due to
having an effective strategy that applies to the current world’s needs. They support its strategy
of innovating to create eco-friendly solutions for global problems by aligning its corporate
communication, its corporate social responsibility, its corporate culture and its leadership style
and the type of decisions being made in GE. These factors work in harmony together to support
the strategy; which is a sign of a successful strategy and a successful company.
Regarding the above findings, it is safe to say that GE is considered to be one of the best
choices of employer. It is the most suitable workplace for employees who are looking for a
respected ethical environment, where their opinions and believes are respectively considered.
Further, GE has a strong believe in employees' development since it regularly offers trainings
sessions to improve their working skills. Employees are also given invests to motivate them
through the form of promotion from within. Consequently, any employees would be pleased to
be part of GE(source), meaning that GE is a recommended as a company to work for.
GE's financial position is bright. The share price is in a good situation since it is continuously
rising during the last three years. As the basic earnings per share was $1.24 in 2011 with an
increase of $0.09 since 2010 ($1.15). Additionally, 2012 generates the highest price overall
comparing to the other years, which is $1.39. The reason for this positive increasing is due to
the increases in paying dividends for the shareholders –whenever it is possible-, although they
have agreed on a specific amount (Lemer, 2010). This comforts any investors to invest his/her
money in GE.
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References:
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http://citizenship.geblogs.com/ethics-walking-the-talk/
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Appendices:
Appendix 1: GE investors relations tap
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