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General Electric

General Electric. Kelsey Gamble Kendra Jocksch Nancy Moke Aly Remtulla Abi Sanni. Agenda. 1. The Company. 2. Management. 3. Problem Statement. 4. Analysis. 5. Recommendations. 6. Implementation. The Company. Founded in 1892. Business was based around Edison’s patents.

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General Electric

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  1. General Electric Kelsey Gamble Kendra Jocksch Nancy Moke AlyRemtulla AbiSanni

  2. Agenda 1. The Company 2. Management 3. Problem Statement 4. Analysis 5. Recommendations 6. Implementation

  3. The Company Founded in 1892 Business was based around Edison’s patents

  4. Key Success Factors Model of Management Constantly Adapting Massive Size Ecoimagination & Healthymagination

  5. GE’s Business Divisions Energy Infrastructure Technology Infrastructure Consumer and Industrial Capital Finance NBC Universal

  6. CEO Jack Welch (1981 – 2001) Comprehensive Strategic and Organizational Changes High Targets Continuous Performance Reviews Internally Developed Leadership Brought GE into Financial Services

  7. CEO Jack Welch (1981 – 2001) Shifted GE’s Strategic Direction every few years 1981 $30 Billion Revenues Net Income: $2 Billion 2001 $126 Billion Revenues Net Income: $14 Billion 24% Return to Stockholders

  8. CEO Jeff Immelt (2001 – present) 9/11 Financial Crisis Strategy of Organic Growth

  9. Challenges Faced by GE VS Motivational Active Listener Good Teacher

  10. Problem Will Immelt’s strategy of exploiting linkages across businesses be successful in delivering targeted growth and profitability?

  11. Immelt’s Strategy: Exploiting Linkages Across Companies Product Bundling & Cross-selling Resulting Issues: “Enterprise Selling” 1. Compromising the Role of Corporate Headquarters 2. Difficult to Implement Individual Incentives 3. Complexity of Widening Portfolios

  12. Analysis 4 Key Advantages of a Divisionalized Firm 1. Adaptation to “bounded rationality” 2. Allocation of Decision Making 3. Minimizing Coordination Costs 4. Avoiding Goal Conflict

  13. Analysis Multidivisional Form of Management Provides Solutions to 2 Central Problems: 1. Allocation of Resources 2. Resolution of Agency Problems

  14. Analysis- Financial Information Percentage Share of Consolidated Revenues

  15. Analysis- Financial Information Segmented Performance: Revenues & Profits

  16. Recommendations Pursue Immelt’s Strategy 1. Risk Taking 2. Sophisticated Management 3. Innovation Global Leadership New Engines of Growth

  17. Implementation http://www.youtube.com/watch?v=CsW1JE4Hg14 Issues Raised: 1. Compromising the Role of Corporate Headquarters Management Shift Change in Corporate Culture Organization Strategy vs. Reward Strategy 2. Difficult to Implement Individual Incentives Maintaining Organizational Structure Imagination Breakthrough Initiatives 3. Complexity of Widening Portfolios

  18. Questions

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