Essay on Genereal Electric

4546 Words May 20th, 2016 19 Pages
Corporate Strategy Analysis:
General Electric Co. (1981–present)

Stanislav Bucifal
Australian National University
July 2009

Corporate Strategy Analysis: General Electric Co. (1981–present)

Stanislav Bucifal

The General Electric Company (GE) is widely regarded as one of the world’s most successful corporations of the 20th century. This paper aims to critically analyse the corporate strategy of GE during the period from 1981 to present under the leadership of two very different but equally influential CEOs—Jack Welch and Jeff Immelt. The essay is organised in four sections. The first section describes GE’s corporate strategy from
1981 to 2001 with Jack Welch as CEO, followed immediately by a critical
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As part of his efforts, Welch led a sustained attack on bureaucratic processes and in its place he sought to instil a culture of openness, confidence, leadership and creative thinking at every level of the organisation. Through his organisational restructure Welch ruthlessly eliminated several layers of management and shed a large number of jobs, which earned him the nickname ‘Neutron Jack’ referring to the deadly neutron bomb which kills people but leaves buildings standing ( 2009). The biggest staff cuts were made in administrative functions and business decision making was delegated to line operation managers.
Welch implemented a major restructure of the GE business portfolio, focusing on a limited number of sectors with promising performance and growth potential, whilst retaining a fairly diversified portfolio of businesses. This was achieved through the sale of GE’s less profitable businesses and retention or acquisition of businesses identified as number one or number two in their industry (Grant 2008, p.304). The strategy led to several huge divestments and the shifting of emphasis towards GE’s technology-based businesses and service businesses (Bock 2001). A series of acquisitions that followed led to the phenomenal growth of GE Capital, which became one of the world’s leading diversified financial services companies (Grant 2008, p.304). Figure 1 shows GE’s organisational structure and business

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