Competitive Strategy and Innovation - GE Case Study

Introduction

The General Electric Company (GE) is considered to be one of the world’s most successful organizations of the 20th century. The company was founded from the merger in 1892 between Thomas Edison’s Electric Light Company and Thomas-Houston Company, with these companies merging to form the GE (General Electric) (Bucifal, 2009). The central of this organization encompasses electricity generation along with its distribution networks, manufacture of light bulbs furthermore electric motors. This paper focuses on the critical assessment of the corporate strategy employed by GE during the period that saw theme become one of the most successful organizations. In that case, there will be the assessment of the core competencies that facilitated the realization of this success. The second section will revolve around the assessment of the strategic options that the company can employ in their structure as a means of ensuring that they uphold this success in addition to the possible recommendations to enhance their success. The last section will involve the comparison of the management approach that was employed by Jeff Imelda and his predecessor Jack Welch along with the assessment of the most suitable strategy in the contemporary world.

1.        Core competencies and capabilities at GE

Through the assessment of the GE competencies and capabilities that were responsible for their extended success, it is evident that their strategic financial planning along with organization management that started in the mid-1960s under the leadership of Fred Borch played a major role (Hitt, 2009). In this case, his strategic business management ideology relied on the strategic business units in addition to the evaluation via portfolio assessment which was an ideal business management strategy for the majority of the organizations that operated at the time. Further, Reg Jones that was lead the company between the year 1973 and 1981 managed to link the company strategic planning strategies with the business financial management systems (Magee, 2009).

Leadership is an additional competency that played a very significant role in the success that has been enjoyed by GE. In this case, it follows that organizations ought to be structured about their core competencies through the provision of more market access and the addition of value to GE services. It follows the assertion that the competencies are unmatched as it was the case in the democratic management style that was employed by Jeff Immelt in the core organization operations. These attributes led to changes as well as improvements to the leadership culture at GE (Hitt, 2009). Thus, the possession of an “innovative work ideology” at GENERAL ELECTRIC gave them the opportunity to distinguish them from other their peers in the industry.

Further, the excellent communication competencies by the leadership allowed the ease in interacting with all the facets of the organization and all employees in the organization through the provision of motivation, opportunities moreover elevated standards of best quality management as a strategy of eliciting the best of them (M, 2010). The adoption of an intelligent, emotional leadership approach has been vital in ensuring that there are effective investors and customer relationships furthermore loyalty, which has always been valuable to the success of the organization. These leadership approaches by the management of GE allowed them to chase sustainable operational efficiency in addition to cost competitiveness through the implementation of effective environmental initiatives.

The adoption of a firm structure is further a competency that has been responsible for the success that has been realized at general electricity company. The assertion, in this case, is that the organizational structure at GE ought to be based on the organization competencies and not on the business portfolios along with their targets. The attribute compounded the decentralization of GE’s structure increasing the centralized administration breaking up into an assortment of strategies that allow the realization of cross-business amalgamation at the company. Through this competency, GE was able to enhance their market value from 12 billion dollars to 37 billion dollars over a period of 25 years (Adams, 1999). The adoption of the competency in the organizational structure allowed the transition to the organization from a results-oriented platform to an open moreover less confined architecture.

The competency allowed the organization to increase their contact with the business issues, increasing the effectiveness of their operations (Ocasio & Joseph, 2008). Through GE’s superior communication, soaring-level organization heads along with the CEO, the enhancement of the control area along with the elimination of the number of reporting opportunities and weaknesses relation to delegation served to enhance their effectiveness (Barney, Wright & Ketchen Jr., 2001). Also, the empowerment as well as motivation for the employees and reduce the bureaucracy was among the attributes that played a major role in removing the incompetence and delays that were evident in the organizational structure.

Effective human resource development is additionally a competency that was central to the success that has been realized by GE. The competency is supported by the fact that global learning of the fact that development of commitment leadership that is focused on the realization of the highest level of capabilities, training, and knowledge and employee education is vital for the organizational success (Kandampully, 2002). The additional assertion is that access to advanced functional skills, leadership strategy, business knowledge, a policy as well as politics, and growth of the diverse organizational behaviors as external focus, critical thinking, depth and creativity at work are vital to the success that GE would enjoy. Through the talent management infrastructure that was adopted at GE, the organization was able to access efficient as well as effective structural changes that have been central to their success.

The adoption of the diverse employee superlative training practices at the organization was realized because the organization already had established the most effective be determined due to the organizational structure. Further, the possession of the effective communication strategies, research moreover development facilitated the assessment and introduction of the most effective human resource development strategies. GE spent more than one billion dollars in the annual employee training with their continued support for human resource development even during the recession in 2007 till 2009 serving as a testament to their commitment to succeed (M, 2010). All the GE employee training investments have always reflected optimistically on employee involvement, commitments, furthermore satisfaction. It is through the adoption of all these attributes that GE has managed to enhance their human resource management capability which has been central to their success.

Technology as the additional competency under assessment makes it evident that the organizational culture that characterized the operations encompassing a bean counter, six sigma, and the bottom line is driven organization has transitioned from this position to embrace innovation. The capability by Immelt that saw the transformation of the organization from its traditional nature has been dependent on the adoption of technology in the organizational operations (Kandampully, 2002). In this case, there has been a growth in the volume of the technological innovations demand in the organization with the re-engineering process mapping being one of the most effective technological adoptions at the organization.

Further, the adoption of the diverse strategies as workouts employee as well as manager retreats, eco-imagination, furthermore Imagination Discoveries strategies has been adopted in the organization as the foundational strategies of enhancing their technological adoptions (Magee, 2009). Their main focus was on the resolution of their prevailing challenge on addressing their commitment to the innovative establishment of the core strategies for the resolution of the negative environmental impacts that are caused by some of their activities and products. 

Further, it was imperative that they assess and resolve the contemporary environmental confrontations to allow for market expansion opportunities, commercialization of their products, and also benefiting their customers and other stakeholders in the society (Kandampully, 2002). GE made major investments of approximately $100 million in the diverse technological innovations that had been meant to differentiate them from the competitors. Through these technologies, GE managed to substantially lower their operational costs, augment access to the markets, advanced the quality of their products and additionally delivered customer value that significantly addressed the major global challenges.

The diversified portfolio is further the capability has played a major role in the success enjoyed by GE. It follows that under the leadership of Welch and Immelt, the company was able to employ this competency and consequently develop and leverage a diversified portfolio that adopted strategic synergies promoting the expansion of the company especially in the growing economies (Adams, 1999). Through this assessment, it is evident that no company has been able to implement a more aggressive global penetration strategy that GE, with their business unit systems playing a major role. The strategy has been supported by the fact that the division managers served their roles as unit business owners promoting their contact with the customer needs as well as wants (Kandampully, 2002).

The ability to diverse GE portfolio allowed the advancement of the shared competencies that entail shared knowledge, resources, patents as well as skilled labor, all synonymous with the diverse business operated by GE (Ocasio & Joseph, 2008). The company further managed to develop effective relationships with their diverse markets as in India and China, serving to enhance the reputation of their brand. They have additionally had the opportunity to exploit the low-cost labor resources in the countries, enhance their efficiencies and profitability whiles the fact that they enhanced elements as customer satisfaction and coherency in the organization serving to enhance their success in these markets.

2.        GE strategic options

GE although has management to record significant global success still have some strategies they can adopt to enhance their success and overall global growth. The assertion, in this case, is that the contemporary business environment has seen an increase in the competitiveness among the global players, with the entry of new businesses being the case on every day (Du, Bhattacharya & Sen, 2010). The overall success of the existing players as GE is in ensuring that they integrate efficiency through innovations in their operations. Further, it is imperative that these players adopt strategies that will increase the effectiveness of their interactions with the customers and other stakeholders that are integral to the success of their business operations. It is through this assessment that there has been an establishment of the optional strategies that GE can adopt in advancing the success of their operations. Among these optional strategies include:

                    i.            Increasing the organization’s adoption of corporate social responsibilities

The assertion of the need to integrate this strategy is that the growth in competition between business and the increased awareness on the side of consumers and suppliers especially in the energy sector makes it imperative that businesses assess the needs of these stakeholders and address them accordingly. The additional issue of global warming and the consequent adverse impacts on the environment have an additionally had a major impact on the manner in which the consumers are making purchase decisions as they seek to protect the environment (Du, Bhattacharya & Sen, 2010). Customers along with suppliers are seeking to deal with the representatives of an organization who have the capacity to make decisions swiftly. The traditional operations and management in companies as GE encompass the assertion that most of the decisions came from the top echelons of the organization and often led to massive delays in reaching decisions (Kumar, 2016). The contemporary situation, however, demands that the management of these organizations ensure that the leaders on the ground have the authority to make decisions on the issues that affect their operation about the immediate stakeholders.

                  ii.            Dismantling of the GE’s old structures and adopting the contemporary ones that are more effective and efficient

It additionally follows that most of the traditional infrastructure that was used by the organization operating in the same industry has GE are characterized by inefficiency and constant breakdowns that have the impact of significantly increasing the operational costs of these organizations. One of the issues that prevail in this assessment is the fact that operations that are based on the traditional infrastructure are expensive to run and manage. The increased operational costs by these organizations normally eat into their profitability and consequently adversely impact other sectors that could enhance their success as global expansion, human resources development and research and development (Hitt, 2009).  Following the emergence of the contemporary technologies that are meant to increase efficiencies and further promote the productivity, integrating this strategy is a vital means by GE to advance their global domination and profitability. The possession of the most innovative and technologically advanced infrastructure will be the key difference in the success enjoyed by GE against their competition.

Overall, I would recommend that GE integrates the corporate social responsibility into their operations as their core success strategy. The rationale behind this recommendation is that the possession of an effective CSR strategy by GE is going to serve as their marketing strategies especially in the developing countries through the advancement of their brand. Through the development of such strategies as constructing schools, sponsoring the bright students as well as taking part in environmental cleaning and development of friendly products, GE will be able to advance the awareness of their brand in these economies. Further, developing strategies as stakeholder management offices and customer relations personnel to address all the issues advanced by these groups, GE will have an opportunity of ensuring that they maintain close relationships and consequently enhancing the reception of their brand.

3.        Comparison of the management approaches between Jeff Immelt and Jack Welch

This section encompasses an assessment of the comparison between the management styles that were used by two of the best leaders at GE Company, Jeff Immelt, and Jack Welch. Through this assessment, it will be possible to establish who of the two leaders has the best capability to address the issues that are highlighted in the VUCA model, especially in light of the operation situation that characterizes the contemporary business world.

In this assessment, it is observable that when it comes to the methodological approach adopted by the two leaders in their operations, Jack Welch was a cost cutting methodology whose emphasis was on enhancing efficiency and making deals that guarantee the organization the best performance. Further, it is clear that Jack Welch emphasized in the use of the six sigma management approach encompasses the promotion of quality products through incurring the lowest costs possible Krames, J. A. (2005). Further, it is evident that he was in support of session C-management approach that favored appraisal of the management strategies, enhancement of product development as well as planning of reviews.

Looking at Jeff Immelt’s management methodology, on the other hand, it is clear that he was in support of strategies that were based on taking calculated risks, adoption of sophisticated marketing strategies as well as the enactment of innovative strategies. In the advancement of the organization growth, Jeff Immelt emphasized on external growth, marketing as well as the development of a commercial member council comprising of 12 individuals with the role of assessing all the marketing ideas (Magee, (2009). He was additionally for the removal of the rotation component that was used in the organization and made specialists for the diverse departmental components. Jeff Immelt was further in support of openness and trust in the operations, giving the employees more authority in the execution of the organization duties.

On the issue of the management paradigm adopted by the two leaders, Welch employed an imposing leadership strategy when dealing with the other employees. He promoted efficiency within the organization by adopting the strong business and downsizing strategies along with observing a fix, sell off close strategy when advancing the productivity decisions Krames, J. A. (2005).  Immelt, on the other hand, was a based his management paradigm on developing a people oriented paternal like perspective, setting the basis for the future growth engines. His management style was chiefly democratic whereby the employees were given opportunities to take part in the organization’s decision as well as being given more autonomy to management most of the organization affairs without close supervision of the leadership.

While Welch targeted the USA and the European Union as the core targets for the organizational products, Immelt structured the organizational market for the developing nations (Magee, 2009).

Welch’s production portfolio was based on a philosophy of real-time planning with the core cash generators being in their financial management along with services Krames, J. A. (2005). Immelt on the other based his portfolio on the development of long-term strategies, with the emphasis on green energy infrastructure.

The social responsibility premised adopted by Welch based founded in the law while Immelt on the other hand based the company’s responsibility management on social responsibility.

Overall, the leadership attributes that were advanced by Jack Welch encompasses the emphasis on the organizational vision and not supervision, instilling confidence among the employees and getting out of their way. He further asserted that management is attained by allocating people the resources they need and giving them the opportunity to undertake their operations (Krames, 2005). He emphasized the setting of clear and general goals that are consistent with the values depicted by the company and creation values that are additionally consistent with the vision.

Jeff Immelt, on the other hand, promoted his successful leadership by emphasizing personal responsibility through the assertion that a leader cannot accomplish everything by him but team building as well as placing others first will be vital to the success of the company. Effective communication is additionally an attribute that he emphasized through effective listening to all the parties before making decisions. Simplifying constantly by ensuring that they explain the integral issues several times to the parties is additionally central to the success of leadership (Magee, 2009). He emphasized the importance of alignment as well as time management, with leaders required to assess the main issues in the organization and set priorities, measuring the outcomes in addition to rewarding the excellent performance.

It is evident that the contemporary business environment is characterized by a very unpredictable. The adoption of the VUCA model is one of the strategies that have been used to assist in addressing the situation that is faced by the contemporary businesses whereby it is imperative that the contemporary organization address the issues of volatility, uncertainty, complexity as well as the ambiguity of the contemporary world (Kumar, 2016). The most effective mode of addressing the challenges is in possession of a work environment that gives the employees freedom and resources to be creative in their diverse department. As such, it is by the possession of leadership that is accommodating, democratic and employee oriented that the issues addressed in the VUCA model will be resolved. It is thus evident that the adoption of Jeff Immelt management strategies offers the best likelihood of addressing these issues. His desire to emphasize on corporate social responsibility offers an excellent premise for the success of the organization with employee development and emphasis on technological innovations being the key elements that will lead to the success of the organization in the contemporary world.

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Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in college research paper services if you need a similar paper you can place your order for best essay services online.