Professional Documents
Culture Documents
INTRODUCTION
1890 - Thomas Edison established Edison General Electric Company 1892 Edison General Electric Co. merged with Thompson- Houston Company Revenue US$ 147.300 Billion Employees 301,000 In 2011, GE ranked among the Fortune 500 as the 6th largest firm in the U.S. by gross revenue
GE
does not have a mission statement, per se, but its operating philosophy and business objectives are clearly articulated each year in the Letter to Shareowners, Employees and Customers in their Annual Report.
Have a passion for excellence and hate bureaucracy. Are open to ideas from anywhere ,and committed to work out. Have self confidence to involve everyone and behave in a boundary less fashion. See change as opportunity, not threat.
Curious Passionate
Imagine
Solve Build Lead
Imagine is a sense of possibility that allows for a freedom beyond mere invention. Imagine dares to be something greater. At GE, Imagine is an invitation to dream and do things that you didn't know you could do. At GE the act of imagining is fused with empowerment - the confidence that what we imagine, we can make happen.
Every business has to have a reason to exist. a reason that answers the fundamental question of their presence. For GE, the big question has a simple answer: We exist to solve problems - for our customers, our communities and societies, and for ourselves.
For GE the journey to their future is very well reflected by the trends in which the company is heading now. It shows the reflection of where the company has already been. For GE the future is not a destination but its a quest. Quest for the growth. The only way to achieve is to build their own way.
Lead is the vital element without which all other values are meaningless. GE is synonymous with leadership. Leadership comes with responsibility to change.
At GE the quest for change drives them to be the first in everything they do.
I wanted to change the rules of engagement, asking for more from fewer. I was insisting that we had to have only the best people...If you wanted excellence, at a minimum, the ambience had to reflect excellence Jack Welch
Industry recognition Global strength and competitiveness Excellent Management Diversified lines of operation Environmental initiatives Strong Revenue Growth
Under-performing energy sector Threat to flexibility Low Debt Ratings Substantial Debt Burden
Mergers and acquisitions Research and development Increased Demand for Commercial Airplanes Continued Global Project Opportunities
Competition
Information security Financial crisis Media depictions Environmental and other government regulations Projected Labour Cost Increases
Economic Factors:
Inflation
Disposable income Business cycles Low lending rates
Social factors
Social mobility
Lifestyle changes Consumerism Levels of education
Technological Factors:
GEs sTRATEGY
Adopted five initiative strategy to create high margin, capital efficient growth
In 1960, Jack Welch joined GE as a chemical engineer for its Plastics division in Pittsfield, Massachusetts.
Tenure
When he became the CEO of General Electric, Jack found out that there was too much of bureaucracy and the company was running on the traditional style of doing business There was no innovation or no change in the organization. Therefore, citing this lack of change as an opportunity, he became a change initiator and introduced some major new strategies which resulted in great change
Managing Style
He pushed the managers of the businesses he kept to become more productive Each year, Welch would fire the bottom 10% of his managers Jack Welch also rewarded his top performing employees with bonuses and also gave them the option of having stock of the company Managers were given free reign as long as they followed the GE ethic of constant change and striving to do better
Cont.
He earned a reputation for brutal openness in his meetings with executives Welch is also known for bringing a sense of informality to the company.
He realized that he needed to do some unfreezing and shake the very foundation of the employees who were devoid of innovation and were believers of the old style of doing business
Decision Making
Welch's public philosophy was that a company should be either number 1 or number 2 in a particular industry, or else leave it completely Welch worked to eradicate perceived inefficiency by trimming inventories and dismantling the bureaucracy He shut down factories, reduced payrolls and cut lackluster old-line units.
he focused on building a strong image of his brand his reign, the slogan of GE was We bring good things to life.
During
Interestingly,
this approach involved using the marketing approach used for consumer products and implementing it for B2B products. meant that he started selling his products as consumer products and used those strategies which were used for consumer goods
This
strategies were focused and simple and were to the point. believed that products should be simple and user friendly. user friendly concept of his went on to be a very famous concept.
He
This
He targeted a small group of businessmen and political parties so as to achieve his required objective Jack Welch did not invest too heavily in technology, rather he went for acquisitions. He focused on the existing business and thought about bringing innovation in it.
Electrics growth, under Jack Welch led them into the following businesses:
Industrial
The changes which were introduced by Jack Welch were revolutionary as they led the company to huge profits. It was termed as growing fast in a slow growing economy by Jack himself. Some of the changes made by him were as follows: Trimming inventories Eliminating bureaucracy Shutting down of plants Reducing payrolls Firing low performing people Eliminating the nine-layered management hierarchy Bringing an informal culture in the company
1. 2. 3. 4. 5. 6. 7.
Ecomagination
In 2004. he new strategy was dubbed ecomagination for its links to economics and ecology and its echo of GEs The appliance business was exploring energy conservation; The plastics business was working on the replacement of PCBs (polychlorinated biphenyls, once widely used industrial compounds found to be harmful to health and the environment) The energy business was examining alternatives to fossil fuels. Other businesses were dealing with emissions reduction, resource scarcity, and energy efficiency. Far from reflecting a deliberate strategy on GEs part, these projects had all been initiated by GE in response to demands from its customers.
Ecomagination
Within five years, the initiative accounted for more than ninety products and services and some $18 billion in revenues. GE s target was to achieve its original goal of at least $20 billion in revenues from ecomagination products by 2010. Steve Fludder, ecomaginations head until mid-2010, GEs eco products were among its most profitable. Contrary to widespread expectations that the financial crisis would kill the companys environmental business, the crisis actually proved to be something of a boon. Post crisis stimulus packages put in place by governments around the world included a significant environmental component GE won contracts for a range of major infrastructure projects aimed at laying the foundations of a new energy future: clean-coal demonstration plants, renewable energy generation, electric-grid modernization, and many others.
Contd
Although the cumulative environmental impact of ecomagination innovations was difficult to assess GE pointed to significant improvements in a number of areassuch as increased fuel efficiency for jet engines and avoided carbon dioxide emissions from using wind power. GE had grown its wind turbine business, purchased from a post bankruptcy Enron, from $200 million a year in 2002 to $6 billion for 2008. The company calculated that the nearly twelve thousand wind turbines it had installed around the world were avoiding 32 million metric tons of carbon dioxide emissions annually, compared with traditional U.S. grid sources. By its estimates, GE had also improved turbine reliability by 11 percent, creating another $2 billion in value on a netpresent value basis for the turbine owners.
Contd
The ecomagination story can be seen simply as a continuation of GEs hundred-year-plus tradition of using manufacturing and process excellence to improve the efficiency and performance of the technologies it offers the marketplace. Ecomagination has allowed GE to create new solutions that individual business units, left to their own devices and following their historic focus on pushing products out the door, would not have been able to develop. By bringing the outside in and mobilizing the company to address a major multi constituent problem in society, ecomagination has helped transform GEs relationship with the world
GE during Recession
By 2010, GE had overcome much of the early skepticism about its new direction They met its original goal of doubling its annual investment in clean technologies by 2009 (a year ahead of plan) and exceeded its original targets for reducing its own greenhouse gas emission. Taking a page from its playbook for customers, GE adopted many of its own new technologies and mobilized the efforts of employees at fifty GE facilities around the world. The result was a 41 percent reduction in greenhouse gas intensity by 2008, well above the originally targeted 30 percent by 2008. A major contributor was media and entertainment company NBC Universal, where a number of television and movie production studios embraced the go-green message.
FINANCIAL ANALYSIS
Current ratio
2011
2012 1.76
2012 .67
2011
Net profitability ratio PBIT/ Net sales EPS (PBIT- Preference divident)/ No: of shares
Ecomagination
initiative has shown that you can make money and make the world a better place at the same time. Continuation of GEs hundred-year-plus tradition of using manufacturing and process excellence to improve the efficiency